Glossary

This glossary explains the terms that these guides use. For how the terms fit together, read The GHG Protocol and the 3 scopes.

A

• Activity data: The amount of an activity that causes emissions, such as litres of fuel, kWh of electricity or kilometres travelled. You multiply it by an emission factor to get emissions.
• Additionality: A test for carbon credits. A reduction is additional if it would not have happened without the money from the sale of credits.
• AR6: The Sixth Assessment Report of the IPCC. IFRS S2 currently requires its global warming potentials.
• Assurance: An independent check of reported information. Limited assurance gives less confidence than reasonable assurance, which is similar to a financial audit.

B

• Base year: The year that later emissions are compared with, for example to track a reduction target.
• Biogenic CO₂: CO₂ released when biomass, such as wood or palm waste, burns or decays. The GHG Protocol reports it separately from the 3 scopes.
• Bursa Carbon Exchange (BCX): Malaysia's voluntary carbon market, run by Bursa Malaysia since December 2022.

C

• Carbon credit: A tradable certificate that represents 1 tonne of CO₂e reduced or removed by a project. A registry issues it and retires it when someone uses it.
• Carbon footprint: The total greenhouse gas emissions caused by an organisation, a product, an event or a person, in tCO₂e.
• Carbon intensity: Emissions per unit of output or activity, for example tCO₂e per tonne of product or per RM1 million of revenue.
• Carbon neutral: A state in which the CO₂ emissions that a subject causes are balanced by CO₂ removals. Many organisations claim it by buying credits, so check what each claim includes.
• CBAM (Carbon Border Adjustment Mechanism): An EU rule under which importers of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen pay for the emissions in those goods. It applies in full from 1 January 2026.
• CO₂ equivalent (CO₂e): A common unit for all greenhouse gases. You convert each gas by multiplying its mass by its global warming potential.
• Control approach: A way to set an organisational boundary. You count 100% of the emissions from operations that you control, by financial or operational control, and none from the others.

D

• Double counting: Counting the same tonne more than once. In an inventory, the scopes prevent it. In carbon markets, it means a credit that is issued, used or claimed twice.

E

• Emission factor: The amount of greenhouse gas released per unit of activity, for example kg CO₂e per kWh of electricity.
• Equity share approach: A way to set an organisational boundary. You count your percentage share of the emissions of each operation, in line with your ownership.
• ESG: Environmental, social and governance. A broad term for the sustainability topics that investors and others assess.

F

• Financed emissions: The emissions linked to the loans and investments of a bank, an insurer or an asset manager. They are Scope 3 category 15. See the PCAF guide.
• Fugitive emissions: Unintended releases of gas, such as refrigerant leaks from air conditioning or methane leaks from pipes. They are Scope 1 when you own or control the equipment.

G

• GHG inventory: A list of an organisation's emission sources and their emissions for a period, usually one year.
• GHG Protocol: The set of standards that most companies use to measure and report their emissions. IFRS S2 refers to its Corporate Standard.
• Global warming potential (GWP): How much 1 tonne of a gas warms the planet over a period, usually 100 years, compared with 1 tonne of CO₂.
• Greenhouse gas (GHG): A gas that traps heat in the atmosphere. The GHG Protocol covers 7: carbon dioxide, methane, nitrous oxide, HFCs, PFCs, sulphur hexafluoride and nitrogen trifluoride.
• Gross emissions: Emissions before you subtract any carbon credits. IFRS S2 requires gross figures.

I

• IFRS S1 and IFRS S2: The ISSB's sustainability reporting standards. IFRS S1 covers general sustainability topics, and IFRS S2 covers climate.
• IPCC: The Intergovernmental Panel on Climate Change, the United Nations body that assesses climate science.
• ISSB: The International Sustainability Standards Board, part of the IFRS Foundation. It issued IFRS S1 and IFRS S2 in June 2023.

L

• Leakage: An increase in emissions somewhere else caused by a project that cuts emissions, for example when protection of one forest moves logging to another.
• Location-based method: A way to count Scope 2 with the average emission factor of the grid where you use the electricity.

M

• Market-based method: A way to count Scope 2 with the emission factors in the energy contracts that you hold, such as renewable energy certificates or a green tariff.
• Materiality: Information is material if leaving it out or misstating it could reasonably be expected to influence the decisions of investors and lenders who use a company's reports.

N

• Net zero: A state in which the greenhouse gas emissions that a subject causes are balanced by the removals that it causes over the same period.
• NSRF: The National Sustainability Reporting Framework, which phases IFRS S1 and IFRS S2 into Malaysian reporting from 2025.

O

• Operational boundary: The choice of which emission sources the inventory covers, sorted into Scope 1, Scope 2 and Scope 3.
• Organisational boundary: The choice of which companies and operations in a group the inventory covers.

P

• Permanence: For carbon credits, how long a reduction or removal lasts, and how the project deals with the risk that it reverses.
• Primary data: Data from your own operations or from your suppliers and customers, such as meter readings, fuel invoices or a supplier's own emissions figures.

R

• Removal: Taking CO₂ out of the atmosphere and storing it, for example in trees, soil or rock.
• Renewable energy certificate (REC): A certificate that proves that a quantity of electricity came from a renewable source. Companies use RECs in the market-based Scope 2 method.
• Reporting period: The period that an inventory covers, usually your financial year.

S

• Science-based target: An emissions reduction target in line with what climate science says is necessary to meet the goals of the Paris Agreement. The Science Based Targets initiative (SBTi) checks such targets.
• Scope 1: Direct emissions from sources that you own or control.
• Scope 2: Indirect emissions from the electricity, steam, heating and cooling that you buy.
• Scope 3: All other indirect emissions in your value chain, in 15 categories.
• Secondary data: Data that does not come from your own value chain, such as industry averages, databases or spend-based factors.

T

• tCO₂e: Tonnes of CO₂ equivalent, the unit for reporting emissions.

V

• Value chain: All the activities linked to a company, upstream through its suppliers and downstream through its customers, the use of its products and their disposal.
• Verification: An independent check that an inventory or a carbon project's claimed reductions are correct. In company reporting, the term assurance is now more common.

Sources

• GHG Protocol Corporate Standard
• GHG Protocol Scope 2 Guidance
• GHG Protocol Corporate Value Chain (Scope 3) Standard
• IFRS S1 General Requirements
• IFRS S2 Climate-related Disclosures
• IPCC AR6 Working Group I: Glossary
• ICVCM: Definitions
• Science Based Targets initiative
• European Commission: Carbon Border Adjustment Mechanism
• Securities Commission Malaysia: National Sustainability Reporting Framework
• Bursa Carbon Exchange: About BCX