Transcription
Okay, hi everyone. Welcome to the webinar. Um, we will just give it, um, 30 seconds while there's quite a lot of people trying to get in. So, we'll just give it 30 seconds while people access, um, and then we'll, we'll get started on the content. So, um, we'll go quiet for the next 30 seconds or so while people enter the room.
Okay, I'll start warming up then. I know there's still quite a number of people, um, joining, um, the Teams system, but we have an hour, so I want to make sure we get through the content for today's webinar. This webinar is also being recorded, which I'll come back to in a minute, so if people will miss the first few minutes, and they can always come back to that.
So, welcome along everybody to the consultation webinar for our Accounting and Reporting the Climate Impact of Certified Commodities guidance. This webinar, and the consultation, and the guidance are all part of our ISEAL Innovation Fund program, which is called "Shared Value to Climate Impact at Landscape Scale." We're not going to talk hugely about landscapes today. I'll, I'll work that in to show how that all fits together, um, but we're consulting on a specific, excuse me, a specific piece of the, the program in this webinar.
I'm Owen Hewlett. You can probably see me on the camera, I hope, and there's a picture of me just in case you can't. This program is part-sponsored by the Swiss government, by the ISEAL Innovation Fund, and we're working with a number of other ISEAL members whose logos you can see at the bottom of the screen there as participants, and we thank all of them for their inputs to date.
I'm gonna do this, uh, in three parts. So, unfortunately, um, as the kind of lead on this program and, and one of the lead experts in this topic, um, you kind of have to hear a lot from me today, which is something you'll just have to live with. It's only an hour, but we do encourage people, just from a housekeeping perspective, if you keep yourself muted. Generally, we would love to hear your questions between the different sections, which I'll come on to in a minute. And there is a hands-up function in Teams, and my colleagues will keep an eye on that for me. There is also a chat function, but it'd be great to hear from people if there's time. So, let's see how that goes.
As I say, the webinar is recorded, and we will share that with everybody that has registered and via our website for those that didn't. And the consultation itself, which I'll explain later, is open to the first of October 2021, and you can find that, uh, via a link via our website as well. I would say, we, we're using the Teams system for the first time for a webinar like this, so bear with us, um, in case there's some teething issues, but hopefully it works.
With that, I'm gonna talk through three key areas: the context for this guidance, you know, why are we doing it and why now? What's in the guidance? So, what's the overall program content? And then, what's in the guidance and testing? And then a little bit at the end, just to wrap up on how, how we're going to take it forward.
But before that, I'd like to kind of introduce Gold Standard a little bit. We have quite a, quite a lot of people here from the ISEAL community, of which we are a relatively recent full member ourselves. I'm very proud to be a full member of ISEAL, um, but I'm conscious that, um, we're probably a little bit of an unknown quantity to many of you. So, just very quickly on Gold Standard first.
So, we're a standards and assurance body, like, like the other members. Our focus is maybe slightly different. Whereas, I think the traditional membership of ISEAL predominantly focuses on the certification of commodities and supply chains, um, our, our efforts focus more on action and impact. So, what we certify is climate and sustainable development action, so projects, programs, and the impact of those projects and programs. I'll come on to explain some of the applications of that in a minute.
Just in terms of numbers, um, we have, um, climate and sustainable development projects in over 2,000, uh, sorry, over 2,000 projects in over 80 countries. And, and, you know, you can see some of the other numbers there. As an organization, we were founded, um, early 2000s by WWF and other civil society actors. And the, the slightly odd name, because what we don't certify is gold, um, is comes from the gold standard of what was then the Clean Development Mechanism, so one of the carbon crediting mechanisms that existed under the Kyoto Protocol.
So, at one stage, we were literally the gold standard of the Clean Development Mechanism. It's obviously evolved quite a lot since then, and now we have, I would describe as three main focus areas. Environmental markets, which is probably where we're still best known. So, things like the voluntary carbon markets, compliance carbon markets, where we both issue and label carbon credits. We're also very interested in sustainable finance, blended finance. We have a very large sub-national climate fund that one of the first to go through this process, which isn't about carbon credits at all, that's, that's about investments. And then we're also very interested in corporate climate and sustainable development goal reporting. So, what should a responsible corporate action look like? How should they account and report the benefits and disbenefits of their work? And it's really through that last lens that we're predominantly looking today.
Uh, we're obviously totally open to discussions on the other two, and if anybody's interested in those areas, um, then please do get in touch. But the majority of this work today focuses on our third pillar there, on the right, the corporate climate reporting.
Just so you know, we, as a standards organization, focus on, on four scopes of activities: community services, nature-based solutions, infrastructure, and a new area for us is technology-based removals. You've probably heard about things like direct air capture and carbon capture and storage, and carbon capture and use. That's a new area and a new scope for us that we're just launching a working group on. But in this context, actually, in this program, we're focused less on what Gold Standard certifies and what Gold Standard, and more on what Gold Standard does in terms of driving best practices in, in climate reporting and impact reporting.
Just some notes on why we certify impact. I mean, ultimately, I think the, the why will be obvious to many people in this room, um, but there are a lot of whys in terms of why people might like purchase Gold Standard carbon credits or certify a large fund or certify corporate action, ranging from the de-risking of investment right through to, um, trying to maximize impact and go further, either for brand equity or just because it's the right thing to do. So, um, you know, our mandate, if you like, is, is how do we optimize, you know, actions and their impacts, um, and then make sure they're, they're, they're fit for use in the different applications that our stakeholders might have.
And, uh, one other thing I wanted to mention was, um, in 2019, Gold Standard created a sister organization called SustainCERT, and has the remit of being our approved certification body. Gold Standard operates quite a complex assurance system. I won't go into it today because of the varied activities and various applications of our standard, um, and so we created SustainCERT to help us manage that complexity, but also to help drive the digital revolution, um, that, um, that will come forward in, um, in assurance. And they're relevant here, not just because they're a sister organization, but because they are a convener of the Gold Standard's Value Chain Initiative. And the Value Chain Initiative is our program under which this guidance development is operating.
So, Value Chain is an initiative we started a couple of years ago around good practice in corporate supply chain reporting, climate reporting, and it's been wildly successful in many ways as a, a peer-to-peer, pre-competitive environment for corporates to come and exchange ideas and work out how do we overcome the kind of technocratic barriers of accounting to enable action. So, if you'd like to learn more about the Value Chain Initiative, which isn't specifically about ISEAL or ISEAL membership, and more about Scope 3, then, then do take a look at our website and be in touch on that.
So, um, that was a bit of a whistle-stop tour of, excuse me, a bit of a whistle-stop tour of Gold Standard itself. I wanted to move into the first section. What I'll, what I'll do is, I'll pause between sections of around five or seven slides, um, to take any kind of high-level questions at those points.
The first, section I wanted to quickly update on before we get into the, the main, the main content is the context for the development of this guidance. And we're in a very interesting time, I would say, in corporate responsibility and corporate action, um, just with the convergence of the Paris Agreement, the emergence of things like Science-Based Targets, um, you, some of you will be aware of things like the Task Force for Scaling Carbon Markets. There is, there's a lot of effort gone into how we structure corporate practices and corporate actions and corporate assurance and corporate claims. And we're kind of in an unprecedented era, I think, for, um, that sort of confusion on the one hand, but that emerging clarity on the other. And I think it's within that context that this guidance sits.
Actually, something that hasn't really changed is the climate mitigation hierarchy, which you read left to right here, which says we should avoid emissions and avoid emitting activities. So, stop traveling. We should reduce emitting activities. So, maybe switch to the more efficient form of transport. And then we should take responsibility for our residual emissions. So, I had to travel, there were emissions. I've offset those emissions, or I'm taking responsibility by financing, um, impacts outside of my own boundary, outside of that transport emission boundary. And that mitigation hierarchy is, is elderly. It's been around for, for some time. And I like to kind of compare it to reduce, reuse, recycle. All three of those parts are important, but, you know, what you can't do is recycle and assume that the world is stopping producing plastics, right? Just like you can't offset and assume that will fix the climate emergency. So, all, all useful, but thinking about them as a hierarchy, I think is helpful.
And in the avoid and reduce portion, the Science-Based Targets initiative, you can see their logo at the bottom. They emerged in 2015 as the preeminent, I would say, target setting in line with science for corporate, um, reporting. So, how can a corporate set a non-arbitrary 1.5-degree warming scenario aligned target for its emissions and then work towards achieving that? And that was, that was a kind of game-changer in its own right because it moved us from the era of arbitrary targets under Kyoto. So, if you watchers of these big policy instruments may be aware that Kyoto had 25 countries or so that had formal targets, but those formal targets were basically made up. There was no kind of rational scientific reason why one was at 20 and what was it 10. So, Science-Based Targets initiative is kind of removing that arbitrary mass. That's really its importance, uh, in the avoid, reduce, um, portion of the mitigation hierarchy.
And then in December last year, in my view, an equally important landmark publication came out, which was the WWF Corporate Blueprint for Climate and Nature. And this is, this image is an extract from that, that paper, and actually, it's, it's the climate mitigation hierarchy again. So, working left to right, um, avoiding and reducing and reporting that publicly, and then in boxes three and four, taking responsibility by quantifying a financial commitment based on a carbon price and reinvesting that in climate and nature impact.
The reason I think this is so important, other than it's just an excellent piece of work for clarity of vision and integrity, the reason I actually think it's, it's super important is that civil society, and I don't necessarily mean WWF here, I mean civil society as a whole, hasn't always been very good at saying what, what corporate action should be, and rather focused on what it shouldn't be. So, criticism as opposed to a positive, um, steer or what we want to see from corporates. And this, this blueprint from a climate perspective, I think does that in a really sophisticated way for the first time, and I find that really exciting. It's quite scary, I guess, for civil society actors to say, you know, corporates should act this way and not that way, um, as opposed to just the not that way part, because it means we also take responsibility. But that's where we have to get to, I think, to crack these, these huge, kind of existential threats.
So, it's well worth reading that if you want to get a sense of the direction of travel for corporate reporting. And just to, kind of, draw the circle completely, this is a bit like a set of nested frameworks. The Greenhouse Gas Protocol has been around since, I think, 2002. And what it is, is the, the accounting framework, the accounting and reporting framework for emissions. So, it doesn't say, and you must reduce your emissions to a certain level. It's just a structure for the boundary and, um, included gases and included processes, such that a corporate can, you know, sum up those, um, sources and sinks of emissions and report as a snapshot, their emissions in a given year. And then what Science-Based Targets does is take that same accounting approach and say, and that now needs to be reduced year on year to X, Y, and Z. So, the Greenhouse Gas Protocol nests within Science-Based Targets as the accounting and reporting framework. And then Science-Based Targets effectively nests within the WWF Corporate Blueprint as those parts of the climate mitigation hierarchy.
So, you can start to see how the threads start to come together in this, kind of, era of a, kind of, explosion of action and confusion around what, what is credible and what isn't. Um, this, kind of, you know, applied mitigation hierarchy of those three frameworks, I think, is the, the clearest vision of that.
And, sorry, I should go back a step. What we're focusing on in the context of this guidance, if you look there on the circle on the left-hand side of that image from the Greenhouse Gas Protocol, one of the categories of emissions is purchased goods and services. So, one of the things a corporate should be reporting in their supply chain emissions inventory is the emissions associated with the goods and services that they purchase. And that's actually a huge number. I mean, that image shows the various categories, you know, working left to right, but in terms of the relative importance of categories, supply chain generally, I think, according to CDP, is something like 70% of global emissions. And purchased goods and services, I'm sorry, I don't have a figure to illustrate, is the largest category of, um, uh, um, uh, of Scope 3, um, emissions. So, it's effectively our consumption emissions. It's the stuff that, um, isn't really well covered by, uh, our, you know, governmental targets. So, for example, in the UK, we have a net-zero target, and that the boundary for that is the UK sovereign emissions, but actually, a lot of the UK's carbon footprint comes from the purchased goods, so the steel we buy from China for our construction, or the clothes that I buy from wherever they come from. And you, you as members will know that better than I.
So, it becomes a super important, super transboundary, very, very big opportunity for averting the climate emergency to focus on that one part of corporate emissions. And the reason it's so relevant to ISEAL is is pretty obvious, I would have thought by now. As I said earlier, in the introduction, the traditional member base, the traditional stakeholder groups of ISEAL are in the certification of commodities and supply chains. So, in other words, by accounting and reporting the emissions of certified goods, um, you directly contribute to credible reporting of corporate action. But moreover, I think, you know, there's opportunity in that. Now, we have to be careful here. It's not necessarily that certified goods are better from an emissions profile than non-certified goods, and they certainly will be in some cases and not in others, but they'll be better considered, they'll be better quantified, and have the potential then to administer and attribute more accurately than general supply chains can. And, you know, through this guidance, one of the things we hope is to drive, you know, demand for certified goods, premium for certified goods, incentives for certificate holders to take further action by working with their corporate partners.
So, just to wrap up this first section, this is a very brief accounting 101 for those not of this background. The way we quantify our emissions for purchased goods is a fairly simple equation of the volume, so the amount of that good that you buy, times the emissions intensity per unit of that good, is your footprint. So, if I buy a thousand tons of wheat, and the emissions intensity is, you know, 0.1, um, uh, uh, then, then, you know, one times the other results in your footprint for your purchases of wheat in a given year. So, that, that, that equation is helpful.
So, you know, you can, you can look at both sides there. So, you could say, well, actually, I could reduce the volume I buy. That would be in the avoid category of avoid, reduce, take responsibility. But we can also reduce that emissions intensity per unit in a number of ways, you know, by looking at some of the energy processes, by increasing yield, for example, without taking up more land. You can reduce the intensity per unit, and that would fall into the reduced bucket of the, of the avoid, reduce, take responsibility. So, you can see here that there's an opportunity to target the emissions intensity of certified goods to make them more attractive for purchase by reporting corporates.
And then I just wanted to talk about biogenic emissions. So, this is more your carbon sequestration, so your carbon sinks in woody biomass or soil. And this is likely to be calculated slightly differently. I'm hesitant here because, um, this is being worked on by the Greenhouse Gas Protocol at the moment, where I'm part of the advisory group. But the way that's likely, heavily simplifying, to be reported is not quite the same way. It's not on a unit times volume basis, but, but by an area times carbon stock change basis. So, the area associated with the supply of my wheat is X. The carbon stock change on that area, which could be going up or down, so it could be, you know, a source or a sink of emissions, is the footprint. So, that could be that footprint on the right-hand side in energy process. If I go down a step, uh, in energy process, that will always be a liability, that will always be an emission. In this equation, actually, it could be a benefit, it could be a carbon removal if the carbon stock is increasing, um, if there's successful action that starts to, to reverse the degradation of the sourcing areas that we work in. So, we're covering both of those areas in our guidance.
And the reason we're doing that, you know, with ISEAL members and now, is in three main areas. The first is that we really want to encourage credible reporting. So, you know, it's complex, data quality is poor, it's highly technocratic and difficult to get, you know, our heads around how to account, report this stuff. But there's not a world in which I feel like ISEAL members can, can sort of not do that. The rest of the world of climate reporting will be reporting ever more credibly, and the last thing we want is for ISEAL to be left behind. But also, per the last point, influencing the quality of reporting. If that's the negative, then the positive is, I think, you know, the ISEAL community, with its commitment to good governance and transparency and quality, is perfectly placed to influence the conversation the other way around. So, so many ISEAL members have pioneered really good ideas around things like mass balance and chain of custody that just aren't present generally in, in corporate climate reporting. But it could be very beneficial and start to influence the quality of traceability and data in the other direction.
And then in the middle there, more aspirationally, as opposed to just, you know, the mechanics of reporting and the mechanics of influencing quality, and we do also, you know, want to promote the purchase of certified commodities. So, those that are improving or are more credible or are even lower than non-certified goods in terms of emissions intensity, for example. You know, there should be a, that should, that should be in demand, right? Corporates will want that and should hopefully pay a price premium or give preferential procurement to that. So, that's something else we want to try and take advantage of.
I think, as well, I see all in the same breath, ISEAL members are very good at enabling action by producers. And I think that's a really important angle here as well, that, you know, there might be a baseline, um, emissions intensity, but, um, you know, the whole point of this, um, this guidance is also to enable action by, uh, producers or corporates working with producers. So, those are the main reasons why, I see, why, why now.
I'll come back to this at the end, but you may well be aware, and I hope you are aware, that ISEAL itself is is conducting a, a, a pretty impressive, um, uh, kind of strategic program, of which climate reporting is one of those. Um, and I know this, I see your colleagues on the call today, that you could find out more. If there are any ISEAL colleagues, and you want to put an email address or something in the chat function, then, um, I would definitely recommend people get engaged, not just with this program, but with ISEAL's own work, which I think is excellent.
So, that's the, the context and the purpose. I'm going to come on next to what's actually in the guidance, which is the kind of meat of the sandwich, if you like. But maybe, Sarah, I don't know if there's any kind of questions or comments so far, um, on anything I've said in setting the scene?
I haven't seen any hands go up to date.
Excellent. Okay, I'll just pause there for breath and a quick sip of water, um, but, um, yeah, uh, otherwise, I'll, I'll plow on.
Okay, so hopefully that scene-setting, and I'm sorry for those of you that are already literate in this space and are, you know, kind of working on the solutions, but, you know, part of the, the initiative here is to try and set out our stall that anybody could access this information. I'll come on to how we're doing that in a minute.
So, um, one of my big fears with climate reporting on a personal level is that it is very technocratic. You know, government reporting is technocratic, greenhouse gas reporting under the GHG Protocol is technocratic, and when you have those structures, then you get a power differential, and people get left behind. So, one of the key things that I think we want to try and do in the ISEAL community, and hopefully the ISEAL community can leverage Gold Standard's expertise, is in, is in trying to spot those, um, inequities early in the piece so that everybody can participate. That's certainly something we're very passionate about.
So, in that ISEAL, um, strategic context, we're very committed ourselves to supporting the community with our expertise. You could probably tell this is our background, whereas certified commodities is not. So, we want to know our place and support you guys in the work you're doing.
So, just in terms of this program, it's quite a big program, and it takes us through to June next year, 2022, and it has a number of outputs. And I would characterize that in two parallel streams: so, there's a development of guidance, and then there's the testing of specific actions and interventions. And I'll come back to the testing in a minute. And the, the two will iterate. So, the testing that we do will improve the guidance. And this on the screen right now is a summation of the outputs of this program. And this slide is designed to be lead, lead red, left to right.
And so, we started the left with the introductory documents. So, you know, one of those is out to consultation right now, um, you know, what is the context and, um, and potential, I guess, theory of change for why we're doing this, which is accessible to everybody. And then we move into, and these aren't drafted yet, these aren't out to consultation, a series of "Start Here" guides for the four key stakeholder groups: so, standards assurance providers, um, certificate holders, and users, claimants. Those are going to be slightly more detailed, or at least maybe slightly more tailored towards those stakeholder groups, because I think it is interesting to explore that, but they won't be very long. You know, we're looking at sort of five pages each. And then we get into the real technical guidance, which is the big one in the middle, um, bordered in green. That's the guidance that is currently out to consultation and we'll talk about today, and I'll explain what's in there in a minute.
And then the other outputs are much more technically technical depth related to that main guidance. So, there's three of those. There's a white paper on supporting landscape efforts, um, and I'll come back to that in terms of how this program is really a landscape program in disguise. And then there's a second one, which is around, um, technical guidance for developing quantification and MRV approaches for action. So, one of the things we wanted to do was try and set the quality bar for methodological work, basically. And then the last one is how do we think, or at least start to think about, aligning climate reporting with wider SDG, um, co-benefit reporting. I know that's of interest to many members as well.
So, the way to, kind of, read this program, I think, is the guidance in the middle is all-purpose for everybody to set up reporting systems for, um, emissions. And on the right-hand side, particularly the landscape paper, how, how do we apply that thinking in the context of a sourcing region or a sourcing area landscape lens? So, so the reason we've done that, and it might look a bit odd given this is a landscape program, is that we don't feel that we can answer the question about how to support landscapes and how to come to meaningful, consistent reporting at the landscape level if we don't have meaningful and consistent reporting generally. So, that's the, kind of, underlying philosophy there. I'll come on to explain a bit more of that in a minute.
So, the main outputs, um, uh, like the ones that are out to consultation now, the introductory guidance is, you know, its main objectives really are to introduce everybody to the topic, as I'm doing here today, and walk you through the context and intention. It's not complex. It's, well, I say it's not complex, but then I'm, this is my area of expertise. So, actually, part of the consultation should be, do you guys think it's too complex? You know, have we started, have we pitched this at a simple enough level, um, that people who only have a passing literacy can engage? Because that's really the aim here. And if we haven't, then we want to redress that.
So, we don't assume people are especially familiar with the climate emergency or accounting terms, but even so, you know, we can be blinkered a little bit by our own expertise and experience. So, do comment on that. There's no, um, technical guidance in that one. It's really just a how to understand and how to read this suite of guidance documents.
Then the core guidance, really, the, um, the objectives there are to help ISEAL members develop a robust, credible greenhouse gas reporting system. So, it's a holistic set of elements and guidance that, you know, added up, you know, the summation of the options taken and the approach is applied, you add up to a credible reporting system that an ISEAL member can apply. It's agnostic to what standard you apply that under. So, you might want to apply it under a product standard, a chain of custody standard, a sourcing area standard. Those things are really at the member level, and it's acknowledged that each member is different.
So, the analogy I like to draw here is, I mentioned Gold Standard's assurance complexity earlier, and the fact that we have SustainCERT to help us with that. Um, we all as ISEAL members adhere to the assurance code, but the way we answer to the assurance code is different. The way Gold Standard does it is not the same as FSC, for example, just to pick her name out of the hat, but we both adhere to the quality principles. And it's the same here. So, the summation of the different options, so FSC might take a different option to Fairtrade, might take a different option to MSC, to RSB, that's okay. But the summation of those options still adds up to the, the consistent quality that we're looking for.
And the second thing I would say is that it's, it's very much guidance. So, one of the things we didn't want to get embroiled in was how each member approves and uses the content of the guidance. So, you certainly could take the guidance and adopt it, and that's one option, but we don't want to presume that, and we don't want to get involved in the way the different members govern their standards. You know, just knowing how we govern ours, and the thought of trying to adopt a third-party guidance, even at Gold Standard, one of the relatively kind of smaller members of ISEAL, um, I know the other members have much more complex systems, and we don't want to kind of drag you down with that.
So, just in terms of what the guidance does, so these are the main five areas. So, the first is to say it should help identify needs and capacities. So, ultimately, the whole reporting system needs to be driven by the users that are going to use it, and how they're going to apply it, both at the producer level and at the claimant level.
We wanted to create accounting approaches that are credible. And credible, you know, try to define what credibility means. So, you know, we want to bring a level of consistency of quality and approach, rather than necessarily, um, consistency of the specific specificity of different systems, because that's, you know, one of the things that inspires us about the ISEAL community is when we look at, you know, gender issues, or we look at living wage issues, um, the kind of driving of consistency, I think, is really a really powerful thing that the ISEAL community does. And we want to make sure that emissions are being attributed to certified goods properly, and, you know, in cognizant of and respectful of the different levels of chain of custody and traceability that exists around the system.
So, one of the big, kind of, areas we're involved in at the moment is how to claim and incentivize action and claim benefits of action, even where chain of custody doesn't yet fully exist, because the last thing we want is for accounting relying on chain of custody to get in the way of action. We don't have time for that in the climate emergency, but we need to balance that with leveraging the benefits of chain of custody and still encouraging that. So, that's a tightrope, and we want to include energy process and land management emissions. I mentioned land, I guess I should say land and marine and land and aquaculture emissions there. That's a slightly trickier one just because of the status of the Greenhouse Gas Protocol work, but the, the work is in there, and we're hoping to, to align with them when their work comes out later this year.
And then we really want to make sure there's room for producers to take action, either directly or in partnership with corporates, and to attract buyers that way as well. So, although this guidance is targeted at ISEAL members as the owners of reporting systems, we're trying to be mindful of the different user groups.
There are eight elements within the main guidance. So, what we've tried to do, and again, inspired somewhat by the ISEAL codes of good practice, is try to break it into, um, elements that together add up to credibility. And then within each element, and I should have put a screenshot of this, but if you look at the guidance, each element then breaks down into into different sections. So, you have, you know, its purpose and context, you have some key outputs and some credibility indicators and questions to ask yourselves as members, and then you have more detailed guidance on those principles. So, each element breaks down into principles, and then each, each principle breaks down into suggested credibility indicators and outputs, and, and guidance for each of those as well.
And then in each of the guidances, we talk through some of the options that might be available. So, for example, if you do have full chain of custody, then, you know, there's a pathway for that. If you don't have full chain of custody, then clearly there's some limitations to what you can achieve, but that doesn't mean you, you know, you shouldn't use this, and there aren't ways of incentivizing action and reporting benefits. So, the summation of the options taken by different members under each of these elements is important.
I would say the first four are the most Greenhouse Gas Protocol focused, so trying to align life cycle inventory reporting and intervention accounting, um, with the Greenhouse Gas Protocol and ISEAL members. And then we get into more how you manage the system. One that I'm, I'm really passionate about is the approach to assurance. I do think assurance providers will be a key constituent to this guidance. One of the, the bad features of climate reporting generally is the lack of quality assurance, and that's true also of attribution and claim. So, I would like this to be a kind of touchstone for good practice in assurance as well, without being another sort of accreditation level. And obviously, how each member delivers its assurance, you know, whether you have, like us, a, a partner organization like SustainCERT, or whether you have a more decentralized system, you know, those things will vary as well, but ultimately, what we're looking for is, is quality of assurance and clarity of claim.
And then we get into a little bit in element six, how does the reporting of emissions relate to the reporting of outcomes and impacts? So, one of the documents in the ISEAL world that I really like is the guidance for impact and outcome, um, reporting. I think I've called that completely the wrong thing, but there's an ISEAL guidance on on outcome and impact reporting and claims, which I think is really powerful. Um, and we don't want to kind of reinvent the wheel here, but we are very aware that different members have things like ecosystem services procedures and incentives for impacts, procedures and impact accounting, and impact metrics are super valuable in measuring our performance and choosing the best thing to do and incentivizing action. It's just different to inventory reporting. The two don't play super well together. So, you can't really use impact metrics in your inventory, but we do want them to work together. We do want to think about those things and what you can and can't do, and not undermine the good work going on in outcome and impact with inventory thinking and vice versa.
And then we start to get into some of the systems management and capacity building. The one section that's not quite finished is element eight. One of the things I wanted to do in drafting this guidance was think about data management and data security. And for ISEAL community members, ISEAL has some really good ebooks on this, and I learned about them just too late in the process to meaningfully synthesize and and include them, but that is an aspiration.
So, just to sum up on the core guidance, before I just wrap up on the other ones quickly, this is a combination of synthesis of Greenhouse Gas Protocol ideas, Value Chain intervention ideas, third-party initiative ideas. We reference the World Food Lab database, for example, as a touchstone, and then new ideas and a kind of conversion into the language of ISEAL and merging it with ideas around assurance and claim and managing a system robustly. So, um, it's, it's a big document, I would say. And, you know, if you really want to cut to the chase in the consultation, there's an executive summary of these elements. And in the main document, it flips to landscape mode and starts to look more like an, an ISEAL code of good practice, or maybe if you've seen the IUCN Nature-Based Solutions Standard, it starts to look and feel more like that, if you want to try and be more precise on what you're commenting on.
And then just lastly, in this section, I just want to just quickly wrap up. I think I've done those already with what some of the other outputs will be. I won't spend much time on these. The technical guide on quantification and MRV is something that will focus on, uh, how to quantify the benefits of direct actions taken by producers or by corporates working with producers. So, when we take direct action and look to account for it, we really need to do that credibly, otherwise you end up with greenwashing, you overestimate the benefits of the action you take. And so, this document is all about how do you quantify, how do you set up an MRV process that is credible, and if you reported those benefits, it would be, you know, true, basically. And it's complex because there's a range of ways of doing this, from direct on-site sampling through to model-based validated data sets, but this guidance is looking to bring all of those together. We may or may not publish that as a program document. It may be a document Gold Standard itself actually adopts, is such as the importance we we ascribe to this one.
The next one on SDG alignment, I would say a simpler document. We don't want to get into detail of how would you do this for water. That's, that's not what we're saying. It's more like, you know, what are some of the things to think about when you're also accounting for other SDG benefits, like water, even at the impact or outcome level, or at an inventory level. So, this is more like, how do you run those systems in parallel so they don't trip each other up? You know, can a, kind of, claimant of one impact claim to have caused the other, and when is that okay and not okay, for example. Um, so, I would say that one is a, is a higher-level guidance, but it's, it's what I'd love to do with that is start to point the way to other forms of accounting that should work alongside this. So, climate is important, it's existential, um, but so is water, so is biodiversity, and how do we start aligning these different reporting systems, I think, will be really, uh, interesting.
And then the white paper on supporting landscape efforts. So, um, those that have been involved in the program will probably laugh a bit at this one because we've been back and forth and exactly what we want to do with this piece of the puzzle, because it is actually the starting point of the whole program, despite the fact that I've spent 40 minutes not talking about it. And the reason it's, it, I said earlier, it's complicated, is we kind of need to set the system up before we can look at its application in this context. But actually, it, we've got to, it's quite interesting now on this, and, and what we're, what we'll be writing, I think, is a paper that explores the application of a reporting system at landscape scale for a portfolio of actions that improve energy pro, energy process emissions, and, you know, carbon stocks, and then is able to attribute that to different participants in that effort.
What I find interesting about this is that the corporates that source from that area, that buy certified and non-certified goods from that area, per the Greenhouse Gas Protocol, should report it in their purchased goods and services inventory. But actually, an investor should also be reporting it in their investments category of Scope 3. And if you put those two things together, you can start to incentivize an investor to drive action at landscape level to the benefit, the value carrier of improved corporate reporting for the participating companies. And that's, that, I appreciate, sounds a bit abstract, but it's something we predicted a few years ago needed to exist, and I'm sort of gratified and vindicated in a way to see, um, recent announcements from, from some, um, some investors, some banks, for example, that are looking to, um, create effectively collective action platforms where corporates buy in, and that money is used to improve energy process and carbon stock in the landscape. And then the corporates, as a return on that investment, are attributed the, uh, improvements, if you like, or improved goods and services for reporting against their Science-Based Targets.
And the reason I like that so much is, I don't think you can fix either Scope 3 supply chain emissions globally or landscape level degradation generally without collective action. And collective action is hard to invest in unless there's a value carrier. So, in some ways, the emissions profile, the emissions intensity of the goods in that sourcing area, and the carbon stock profile of that sourcing area are becoming increasingly investable. And so, what we want to do in this landscape paper isn't necessarily to focus so much on the technicalities of landscape MRV, although we will touch on that, but rather to look at how would you set up a facility that finances landscape sourcing area level efforts through the lens of attributing that value carrier to participate in corporates through their purchase goods, and then how does a bank involved in that report that in their investment level, um, Scope 3 themselves? So, there's almost like a win-win situation going on. So, that's what we really want to show.
I should have mentioned at the start that one of the participants in this program is the Landscape Finance Lab. I've been hugely grateful for their inputs too, and we'll be working with them on a kind of case study, effectively, taking a real landscape and seeing how this could apply. And so, that was a long-winded way of getting to the landscape part of this program. But actually, in all of this, I think the main guidance, I think, is useful, and it starts to make consistent and, and hopefully helps guide ISEAL members through to good reporting systems. But the ultimate, kind of, game-changer in terms of impact and outcome is being able to apply this thinking to, to, to make landscape level efforts investable through the value carriers of emissions reporting.
Just lastly, then, to wrap up this long, this is the longest section, by the way, so you can breathe easy. The next one's only got two slides, um, is the pilot testing phase. It goes in, in five sections, through to just, you know, high-level capacity and discovery, right through to assessing, um, qualification approaches and the data involved. The, the, from phase three onwards is, is mainly optional. So, um, validation and verification is, is something that we won't do necessarily with all the pilots, because adding extra layers of assurance isn't necessarily always attractive, I appreciate. Um, but the, kind of, darker blue ones there, phase one, two, and five, that's where we'll iterate with the guidance. And so, we have some, the first pilots signed up, and starting shortly in terms of the assessments, which is super exciting. And big thanks to colleagues at SustainCERT for driving that effort.
And Sarah, I'll pause again there for breath and see if there's questions or comments so far, or if anybody wants to interject with just observations, that's also totally fine.
Yeah, um, still no hands up, but there has been, has been a comment shared, like, "Really enjoying the structure. Is there a best practice already completed or any examples to point to?"
Yeah, I think, so the short answer, I would say, in terms of case studies where people have done everything in those eight elements, is, is no. And, and that's, you know, completely understandable. I would say, amongst the participants, you know, as they've all said, like, you know, some are sort of, you know, step one, trying to figure out how they want to build their system, or or have a system in place already that they'd like to improve, and some are much further along the journey and have pretty deep expertise. So, I wouldn't say there's any, um, uh, case study I could point to and say, those guys are getting it spot on. And I think it would be a bit, kind of, arrogant for me to do that anyway, to be honest, given, given that we're really only in the nascent stage of forming the language around this.
But one thing I would like to try and do, and this is subject to working with the participant partner ICO members, is, you know, can we publish a white paper on the pilot testing and the lessons learned and the observations to date? Um, so in a way, it would be great to point to a shining example of everything done by the book. But I think equally useful sometimes is, you know, your struggle in one ICO member is the same as somebody else's, and you realize that how they did it is relevant to you, or you, you wouldn't have done it like that, and maybe you speak to them about it. So, so I would like to try and do that and start to put more examples in there. That's the one thing that's not really in this guidance yet is case studies. So I'm very open to that.
And and one of the things I think is worth us thinking about, and this is partly also, um, about how ICL itself takes its climate strategy forward, is I'd really like this suite of documents to be dynamic, um, as opposed to something we publish once and never look at again. Um, so it does need a guidance document, but I, I think around it, at some point, at some stage, you know, inside the value chain initiative or via the Gold Standard website or via ICL's community pages, there should be a more dynamic space for people to share their ideas and case studies. So, um, I don't have an answer on exactly how that would work, but that's the thinking.
All right, Owen. Giuseppe Mascarella insists that you, that it's time to praise somebody. So, among everything that you've seen, who has done the best work in your opinion?
Oh, insist. Well, who's done the best work? But I'll say some of the stuff that I admire. So amongst our participants, um, uh, so I think there's some really good examples here. Well, firstly, all of our participants have been great. Um, I think everybody's come to it open and honestly, and probably slightly nervously, um, to try and figure out what to do next. But some of the examples around that participant list, I really like. Um, the how BCI, Better Cotton Initiative, is looking at its overarching system and thinking about traceability and and how to bring that back together. So, so that system, I find fascinating just because of its, its scale and its kind of breadth globally and the kind of saturation point, if you like. You know, one way, it's kind of a victim of its success in the Better Cotton is a very prevalent system, um, but that also, you know, is a blessing and a curse in some ways. So it's quite a juggernaut to move, and you know, traceability exists in some places and not others. So how do you take those kind of various loose ends and pull that together into a cohesive system? And I really admire how, how, um, Kendra and the team there are going about thinking about that and and trying to turn over all of the risks and threats and also the opportunities.
Um, I think over at colleagues at FSC. So, um, disclosure, I was involved in the FSC Payment for Ecosystem Services procedure a few years back, and I thoroughly enjoyed working with the team there. Um, there's a lot of brilliant expertise in inside FSC. So, you know, people like Asgar and Peanut have a lot of expertise in life cycle inventory reporting, which I think is great. Um, and I think that ecosystem services procedure is something that can be, can be tailored to the purpose of intervention reporting and counting towards things like science-based targets. So you look for thinking it through early. Big admirer of Fair Trade's current consultation, actually. So we had a, uh, I'll have a partnership with Fair Trade, a long-standing partnership, and you may be aware of the Fair Trade, um, climate standard. I'm probably calling that the wrong thing, apologies to Juan Pablo. But I really admire how the, the depth of the consultation process going on on there. And in a way, that's step one of the, of element one of this guidance is to understand your users and what they're trying to get out of it. So some really good examples from around the participants.
And then maybe in the non-participants. So this is a bit, this is gonna sound a bit sort of, um, cheesy, but I really admire how ICL is going about its climate strategy as well. Um, I would say the Innovation Fund itself has been one of the most pleasant funded experiences Gold Standard has had, and we really feel like we've got room to innovate and breathe within that and a lot of support, um, from, from the ICO team itself. Um, and then I think, uh, you know, Paul Chatterton's work at the Landscape Finance Lab is is well worth watching. So starting to think about holistic action at the landscape level and then marrying that up with both the financial incentives and consistent MRV. So I'm super excited because one of the things that I think will make this sing is is real examples. So, um, yeah, I would definitely advise people to check out the Landscape Finance Lab and and keep tabs on that. And, you know, some of the participants and other ICO members are on this call, so feel free, guys, to to share any insights you have if you wanted to draw attention to your work.
Oh, actually, there was one more piece of work I wanted to draw attention to, which is maybe coming at this from a different angle. Um, you know, another, I think, is an innovation funded, um, fund funded program over at Textile Exchange on the Impact Incentives. Um, so, so that work obviously comes at it from an outcome impact-based perspective, but I admire the thoughtfulness on how does that overlay with, uh, inventory-based reporting. So I think, you know, you could probably draw out of that a common theme, which is everybody has a specific starting point, and and the thing I've admired most is everybody's gone, we do actually need to make this work as a holistic system, whatever that starting point is. You know, if the Textile Exchange didn't want to look at inventories, then the impact incentives could get undermined later. And I think recognizing that earlier is very admirable. So that's a good piece of work that I really recommend people check out as well.
All right, I think that you've, you've done your duty there. Marie Bosque from Da Non asks, can you remind us of the current scope, or does this program cover commodities with high risks of deforestation such as palm oil and soy, in addition to those like FSC?
Yeah, um, so it, we're agnostic. So hi Murray, nice to, nice to hear from you. Um, as I guess we're agnostic in the guidance about which commodities should be reported. Um, and, you know, we linked to the Greenhouse Gas Protocol in terms of the sources of emissions, which should include loss and conversion per the new guidance coming out from them. Um, so we don't say, you know, you can't, you can't use this in high deforestation activities. Um, but it would be great to hear about, you know, whether people think we've safeguarded that strongly enough that, you know, you, you should absolutely be also accounting for the, the obviously the, some of the, the, the scariest stories out there as as members start to get to grips with how to improve the sourcing areas they work. And I think that, you know, reporting the negatives is as important as reporting the positives for obvious reasons. Um, so there are some caveats in there, some of the other things that we haven't kind of looked at in there. So, um, the sharp eye amongst you would probably say, well, actually, one of the first things we should do is avoid using these commodities at all. And I think a lot of ICO members have thinking and programs underway to think about, you know, what is a responsible use of the commodity, not just, you know, is the commodity itself sustainable? Um, but we, we don't tackle that in the guidance. We talk a little bit about things like deforestation safeguards, but that's an area we might want to strengthen. And then, um, what we, we don't, um, cover in terms of, you know, things like the, the correct use of, uh, some of the co-benefits. So something like the water use stuff in the ecosystem services procedure, we're not covering that in this guidance. It's not to say we wouldn't necessarily do that within this program. It's just that within the guidance, I mean, you've probably already looked at it, it's 100 pages, so the more we add in, the longer it gets, unfortunately.
Do you have time for another question now, or do you have more slides to?
I have only two more slides and they just wrap up. So let's do it. I'd rather take a question than a wrap-up. So, okay. So the question is, um, it's, it's the big one, right? Um, from Sherry Wu, um, is wondering whether companies really want to pay a premium to farmers for their efforts on climate change mitigation. Can you talk more about the incentive system?
Yeah, I think that that is the big one for sure. So, so my, my impress, so having kind of, you know, moderated the volume, the value chain initiative, which has sort of 50 corporate sources or 40 to 50, I can't remember the exact number. I, I would say generally the answer is there is demand for this work to be done. And the, the various incentives for that, I would say, you know, depend a lot on the corporate and the context. So I definitely think there is price premium out there. I think there's preferred procurement out there, which I suspect might be become the more common, uh, way of thinking about things. And then there's investment kind of incentives. So not necessarily paying a price premium or a preferred procurement, but to collectively invest in a sourcing area and its producers to, you know, improve practices for things like increasing yield, for example, in soil health. So stuff that's mutually beneficial, I suppose. Um, and kind of, um, sponsored and invested in by corporates. But, you know, it's not something we're covering so much here. We wouldn't want to say that the only way to incentivize this is through direct investment or through preferred procurement. I think that's really for, for, for others to plug in to and figure out. Um, one of the things I, I'd love to kind of find out from some of the other members over time is, is, do they see, um, you know, preferential purchasing or do they see price premiums or some other way of doing this? So I, the short answer is yes. The much longer answer is, you know, how and what that looks like is, is very much it depends, um, on the supply chain.
Should we turn that around and ask any of the, um, any of the standards participating standards and or corporates on the line? We know that Maria's here, so we could choose to put Marie on the spot if you have any, if you have any reflections on that. But if any other, um, participants have reflections or insights, there, please feel free to comment or raise your hand. If not, we can, I would say in the consultation, that kind of question and that kind of insight is probably the most useful consultation response in many ways because this is going to sound bad, so let me get to the other sentence. There's not a great deal we can do to change the Greenhouse Gas Protocol through this program. So some of the, you might say, well, that doesn't seem like a very good way of accounting, and the answer is, you know, there's not much we can do about that. But what I think we can do about it is innovate around how we deliver it in terms of incentives. And that's why I kind of mentioned work like the Impact Incentives piece and the Textile Exchange, for example. That kind of innovation, I think, is really important. Um, and that kind of feedback on how you see users using it, what the demand is, what are the different forms of incentives from, from corporate down, or or the actions that producers would like to take, and how do we enable them to do that? That feedback is is gold dust, I think, because that's where we start to enrich the technical.
Great. Okay, that's the end of the questions that have come in so far. Good. Um, so I only have two very quick slides. One on timeline here, which I won't go through in a lot of detail, other than to say, you know, the main bar across the middle there is the guidance drafting. You know, the, the final review of the drafts will come through at the end of this year, and we're trying to wrap them up by January to give us plenty of breathing room in the, in the program itself, which runs through to June '22. I see I flip back from 2020, 2022 to 2021 halfway through there, so that's not helpful. But the ones on the right hand side should say program closure June '22. And then running alongside that at the top is the iterating with the testing process, and running alongside that at the bottom will be the development of the other outputs that aren't out to consultation at the moment. I, I would say we'll come to a pretty substantive neo-final draft March, April next year, um, but you'll expect to see more, um, communications from us.
And then I wanted just to say, in terms of getting in touch and participating, you can contact us via our consultation page, you know, feedback, whatever you would like to feedback. But as I say, the most enriching things I think are, you know, feedback about application incentives and barriers, rather than necessarily feedback about accounting, although clearly if you spot an accounting error, then, then I want to hear that. Um, my email address is up on the screen there. Um, I urge everybody to take part in the ICL strategy. Um, if, you know, there's information about that on the ICL website and in the community page. Um, I know Vidya has, um, arranged various member calls to talk about that strategy. You know, I would really do urge people to get involved in that. I think that'll be one of the, one of the key moments in, in the ICL community history, and I also think it'll influence the wider climate discourse in a big way. And if you want some further reading, um, I would on on how corporates are acting, then the two links there, one to Science-Based Targets Net Zero and the other to that WWF Corporate Blueprint that I shared earlier. The latter especially, I would say, if you're interested in how right-minded corporates will start to act, is a really good introduction to that topic. So I urge you to read those. And that's it from my side.
Yeah, to take a look at the consultation open until the 1st of October. Um, and, you know, get in touch with me or Gold Standard or ICO generally if you're interested in this and want to learn more. Um, thank you. Thank you very much for listening. Thanks to everyone.