Last updated: September 19, 2025
This glossary is a key reference for terms used across the Value Change Initiative’s publications, providing clear definitions related to Scope 3 emissions, value chain decarbonization, and corporate climate action. We continuously update this resource to reflect the latest developments.
Readers should be aware that this document was published prior to the release of the Greenhouse Gas Protocol’s (GHG Protocol) Land Sector and Removals Standard and Guidance (LSRG), the updates or additional guidance from GHG Protocol’s Corporate Scope 2 Guidance, Scope 3 Standard, Interim Traceability Requirements, and Actions and Market Instruments Workstream, and prior to the development of the Science Based Targets Initiative’s Corporate Net-Zero Standard V2.0. These updates are likely to include further clarifications and requirements concerning several key concepts outlined in this document. Therefore, the terms and definitions within this guidance may be subject to revision.
The VCI aligns as much as possible with the SBTi Glossary, and aims for harmonize definitions across the Scope 3 space to ensure consistency and coherence.
| Term | Definition |
| Activity data | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] A quantitative measure of a level of activity related to a source or sink, that results in GHG emissions, removals, carbon stock changes, or other accounting category values for a given process. |
| Activity pool | [From SBTi, CNZS v2.0 Initial Consultation Draft] The set of emissions sources which may physically serve the reporting entity, but within which further traceability to the specific physical sources used by the reporting entity is not possible (Brander & Bjørn, 2023). Examples include an upstream supply pool, such as a supply shed from which companies source a specific commodity, or a downstream activity pool, such as the electricity grid powering the products that the company brings to market. |
| Adjacent to the Value Chain reporting line | [From VCI Apparel & Footwear WG III output – Advancing Scope 3 accounting in the Apparel and Footwear sector] A proposed reporting distinct line within the market-based mechanism (beyond inventory) reporting sheet. It captures the emissions reductions resulting from a company’s interventions that influence products or activities within the value chain but lack clear or direct physical traceability to the company’s sourced goods. To be recognized as “adjacent to VC”, the interventions must demonstrate a clear and credible connection to the value chain, ensuring they contribute to decarbonization within the sector and are not enঞrely detached from it, thereby Apparel III output differenঞaঞng them from broader BVCM impacts. This reporting line enables further recognition of contributions while maintaining alignment with the principles of proximity and relevance. |
| Allocation | [Adapted from GHG Protocol Corporate Value Chain (Scope 3) Standard] The process of assigning the GHG emissions profile of a system (e.g., production unit, quantity of goods) to the various outputs of the system based on physical or economic data specific to the studied system (including its socio-economic and geographical scales). |
| Free allocation: [From the VCI & ISEAL paper Traceability in GHG accounting] The assignment of a GHG emissions profile to various outputs without applying the most credible or recognized allocation method for the specific product category | |
| Assurance | [From GHG Protocol Corporate Value Chain (Scope 3) Standard] The level of confidence that the inventory and report are complete, accurate, consistent, transparent, relevant, and without material misstatements |
| Attribution | [Based on Brander 2021] Attribution is the partitioning of carbon budgets (emissions & removals) to entities. Note that the term may be used interchangeably with “assignment”. |
| Attribution (in Chain of Custody context) | [Based on ISEAL CoC Models and Definitions, v2.0, 2025] Attribution is the process of assigning specified characteristics to outputs (of a same product group) within a CoC system boundary. Specified characteristics can be attributed to outputs within a product group in two ways: – Proportional attribution – Non-Proportional attribution Proportional attribution: where specified characteristics are distributed evenly across all outputs associated with a manufacturing process, mirroring the physical blend or flow of materials – i.e. each unit of output reflects an equal share of the input material, and corresponding attributes. The approach maintains a physical relationship between characteristics and the material. This method can be applied at batch and site-level transfer boundaries, and is the defining feature of the controlled blending CoC model. Non-proportional attribution: where specified characteristics are not distributed evenly across all outputs associated with a manufacturing process. This may be used when a batch is split to fulfil multiple customer orders, or where only some customers require material with specified characteristics. |
| Attributional accounting | [Based on Brander 2021 Attributional accounting tracks emissions and removals over time within a defined organizational and operational boundary. Attributional accounting is used for corporate inventories, national inventories, and traditional product life cycle assessments. |
| Attributable productive lands | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] Lands in a sourcing region or jurisdiction that are directly associated with producing a given harvested biogenic material or lands where sold products are used. |
| Audit trail | [Adapted from GHG Protocol Corporate Value Chain (Scope 3) Standard] Organised and transparent historical records documenting how the GHG inventory was compiled. |
| Avoided emissions | [From SBTi Glossary (based on GHG Protocol] Product-related avoided emissions are emission reductions that occur outside of the life cycle or value chain of a product or service, but as a result of the use of that product. Avoided emissions account for the favourable differences in the GHG emissions impact of a product (good or service) relative to the situation where that product does not exist. |
| Base year (= Target base year) | [From SBTi Glossary] In the context of inventory accounting, a base year refers to a historic datum (a specific year or, in the case of a base period, an average over multiple years) against which a company’s emissions are tracked over time. Could also be called “Target base year” or “inventory base year”. Note that often this is also called “inventory baselines”, but to avoid confusion with counterfactual baselines used in project accounting, this output only refers to base years. |
| Base year emissions recalculation | [From the VCI Food&Ag V_Output 2025] The process of updating inventory base year emissions with more accurate values. (Based on GHG Protocol LSRG Dra[, Corporate Standard and Scope 3 Standard). Also often called re-baselining, however this term is not used to avoid confusion with counterfactual baselines. |
| Base period | [From the VCI Food&Ag V_Output 2025] A base year value derived from multi-year averages. (Proposed definition, based on SBTi Corporate Net Zero Standard, and GHG Protocol Corporate Value Chain Standard). |
| Baseline scenario (Or counterfactual baseline) | [From GHG Protocol Inventory and Project Accounting: A Comparative Review] A baseline scenario (or a Counterfactual baseline scenario) is a reference case for the project activity describing what would have most likely occurred without the Intervention with regards to climate change mitigation. |
| Beyond Value Chain Mitigation (BVCM) | [From SBTi Glossary] Mitigation action or investments that fall outside a company’s value chain, including activities that avoid or reduce GHG emissions, or remove and store GHGs from the atmosphere. |
| Book and Claim (CoC model) | [From ISEAL CoC Models and Definitions, v2.0, 2025] A book and claim CoC model is a model in which the transfer of certified volumes are decoupled from the physical flow of material or product through the supply chain (adapted from ISO 22095:2020) |
| By-product | [From ISEAL CoC Models and Definitions, v2.0, 2025] By-products: Incidental outputs of manufacturing processes which are usually lower in value and desirability, compared to co-products. |
| Carbon credit | [From SBTi Glossary] A carbon credit is a tradable unit that represents one metric tonne of avoided GHG emissions, reduced GHG emissions or GHG removals. |
| Carbon dioxide | [From Intergovernmental Panel on Climate Change (IPCC)] A naturally occurring gas, CO2 is also a by-product of burning fossil fuels (such as oil, gas, and coal), of burning biomass, of land-use changes (LUC), and of industrial processes (e.g., cement production). It is the principal anthropogenic greenhouse gas (GHG) that affects the Earth’s radiative balance. It is the reference gas against which other GHGs are measured and therefore has a global warming potential (GWP) of 1 |
| Carbon neutrality | [From the United Nations Framework Convention on Climate Change (UNFCC)] “Climate neutrality” refers to the idea of achieving Net Zero greenhouse gas emissions by balancing those emissions so they are equal to (or less than) the emissions that are removed through the planet’s natural absorption; in basic terms it means reducing emissions through climate action. Carbon neutrality is also referred to as “Net Zero CO2 emissions”. |
| Causality | [Adapted from VCI Guidance 1.1] Causality is the demonstration that an investment (or other equivalent action) of a company or group of companies acting collectively is what caused the Intervention to happen or to continue to happen. The rights over mitigation outcomes generated depends on the requirements of the issuing body, which may not necessarily align directly with this definition. |
| Chain of Custody | [From ISEAL CoC Models and Definitions, v2.0, 2025] Chain of Custody (CoC) is a means by which inputs, outputs, and associated attributes are transferred, monitored and controlled as they move forward through each step in the supply chain (adapted from ISO 22095). [Evolved from ISEAL CoC Models and Definitions, 2016] Chain of Custody (CoC) is the custodial sequence that occurs as ownership or control of the material supply is transferred from one custodian to another in the supply chain. |
| Claiming | Detailed presentation or declaration conveying the reportable or narrative climate mitigation progress and status of a company and/or the contribution of a specific activity. |
| Climate change mitigation | [From the Intergovernmental Panel on Climate Change (IPCC)] A human Intervention to reduce emissions or enhance the sinks of greenhouse gases. |
| Co-products | When raw products are transformed into multiple other derivative products downstream, these are called co-products (also called “child products”, [From ISO 14040, 2006] A co-product is any of two or more products coming from the same unit process or product system. [From ISEAL CoC Models and Definitions, v2.0, 2025] Co-products: Outputs of manufacturing processes which hold significant economic value, and are deliberately produced. |
| Consequential accounting | [From GHG Management Institute] Consequential accounting methods aim at quantifying system-wide change in emissions/removals caused by a decision or Intervention; setting the accounting boundary as large as it needs to be to capture all material direct and indirect impacts. These methods aim to account for change relative to a predicted, counterfactual baseline (e.g., what would have happened in the absence of the decision or Intervention). Examples of consequential accounting methods include project/Intervention-level accounting, consequential Life Cycle Assessment (LCA), policy-level accounting. |
| Controlled blending CoC model | [From ISEAL CoC Models and Definitions, v2.0, 2025] A CoC model in which certified input materials are mixed according to certain criteria with non-certified materials or product, resulting in a known proportion of certified materials in the final output (adapted from ISO 22095:2020) |
| Controlled mass balance CoC model | [From ISEAL CoC Models and Definitions, v2.0, 2025] A variation of mass balance, where all input material entering the system boundary has specific attributes – most commonly that all the material, whether certified or not, is compliant with a set of minimum specified legal or sustainability requirements |
| Conversion factor | [From ISEAL CoC Models and Definitions, v2.0, 2025] the ratio which is used to determine the quantity of output(s) that can be obtained from the quantity of input(s) used in the manufacturing or production process, considering losses and wastage |
| Corporate climate targets | [From SBTi Glossary] Goals set by a corporation to reduce its impact on the climate. Targets may include a variety of GHG emissions across different corporate activities (i.e., operations, value chain, or products) and may focus on emissions abatement, neutralization, or beyond value chain mitigation. |
| Country Supply Shed | [From VCI Food & Ag Working Group IV] An area defined by country borders. When a country is small, it could be comparable to a region. Leveraging a country-level Supply Shed as a ‘sourcing region’ will be dependent on its size and compliance with the condition of traceability to one or more first point(s) of aggregation. See ‘Supply Shed’ definition in this list. |
| Crop rotation | The practice of alternating crops grown in a specific field in an (often) planned pattern or sequence in successive crop years, so that crops of the same species are not always grown without interruption in the same field. Crop rotations are increasingly common as they provide many soil health benefits, can be used to increase soil carbon stocks and function as biogenic sinks by removing carbon from the atmosphere. |
| Data systems | [From Making value chain decarbonisation a scalable reality. Role of Scope 3 systems in enabling collective action and co-investments] A data system is a set of integrated components that has a specific purpose and is used for collecting, storing, and processing data and for providing information, knowledge/insights, and in certain cases, assurance. |
| Decarbonization | [From SBTi Glossary] The process by which countries, individuals or other entities aim to achieve zero fossil carbon existence. Typically refers to a reduction of the carbon emissions associated with electricity, industry and transport (IPCC, 2018). |
| Default emission factor | Default EFs are based on life cycle assessments (LCA) and are generally applied when primary data is not available and/or traceability to sourcing region or more accurate levels is not feasible. Most default EFs are available through databases. Default EFs represent common practices within a specific value chain, market, or geography, and therefore do not capture potential emission reductions from specific Interventions and might not accurately represent real conditions on the ground. See ‘emission factor’ definition in this list. |
| Direct mitigation | Based on SBTi CNZS 2.0 draft – 1rs consultation] Direct mitigation refers to actions that can be linked to specific activities within a company’s value chain through a credible traceability system such as a CoC |
| Indirect mitigation | [Based on SBTi CNZS 2.0 draft – 1rs consultation] Indirect mitigation describes measures that drive transformation relevant to a company’s value chain but cannot yet be tied to specific emission sources with the same level of assurance as for direct mitigation. This may include mechanisms such as Book & Claim, broader sectoral programs, or upstream and downstream emission sources where traceability or boundary precision remains insufficient. |
| Distribution (in CoC context) | [From the VCI & ISEAL paper Traceability in GHG accounting, based on ISEAL CoC Models and Definitions, v2.0, 2025] Distribution is defined as ‘the assignment of specific characteristics between product groups (co-products, by-products, waste) produced by a manufacturing process, based on mass-based conversion factors.’ Specified characteristics can be distributed to co-products in two ways: – Proportional distribution – Non-proportional distribution Proportional distribution: where specified characteristics are transferred between product groups (co-products) following Non-proportional distribution: where specified characteristics are transferred between product groups (co-products) following non-physical conversion factors. This breaks the physical link between inputs and outputs |
| Double claiming | [From SBTi Glossary] A type of double counting in which the same emissions reduction or removal is claimed by two different entities towards achieving mitigation targets or goals. The double claiming of emissions reductions and removals often happens between a company’s GHG inventory and the national inventory where that mitigation outcome occurred. In the context of voluntary carbon markets, double claiming can occur between a country, jurisdiction, or other entity that reports lower emissions or higher removals for the purpose of demonstrating achievement of a mitigation target or goal, and the entity retiring the carbon credit for the purpose of making a claim (adapted from ICVCM, 2022). |
| Double counting | [From SBTi Glossary] A situation in which a single emissions reduction and/or removal is counted more than once towards achieving mitigation targets or goals (adapted from ICVCM, 2022). Double counting may refer to a situation in which a quantity of GHG emissions is included in more than one organization’s GHG inventory. This can occur across scopes (cope 1, 2 and 3) and within a single scope due to differing consolidation approaches, differing emissions calculation methodologies, and the intentional design of emissions accounting standards. {Adapted from VCI Apparel & Footwear Value chain Intervention Guidance. Driving the decarbonization of the Apparel & Footwear value chain] Double counting occurs when the same emission reduction or removal is reported more than once within the same reporting sheet by different entities. For example, double counting would happen if two entities report the same reductions within Scope 3 inventory emissions (physical) or within the MBM emissions adjacent to VC. This form of double counting should not be allowed. |
| Environmental Attribute Certificate (EAC) | [From SBTi Glossary v1.2] Instrument that certifies and communicates the environmental and/or climate-related attributes associated with commodities, activities or projects. [From SBTi} Instruments that are used to convey environmental- or sustainability-related characteristics of a given activity or commodity. Within the context of the SBTi, they fall into two broad categories: carbon credits (avoidance credits, reduction credits, removal credits), and Energy and commodity certificates (electricity certificates, fuel cerঞficates, or commodity certificates) |
| Emission factor | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] A value that estimates the quantity of GHG emissions per unit of activity (e.g. per ton of fuel consumed, per ton of product produced), allowing absolute GHG emissions to be estimated from activity data. |
| Emissions (or GHG) inventory | [From SBTi Glossary] The exhaustive calculated GHG emissions arising from activities within a company’s organizational boundary and value chain corresponding to scope 1 and 2 GHG emissions and scope 3 GHG emissions respectively, displayed with all scope 1 emissions aggregated, all scope 2 emissions aggregated and scope 3 GHG emissions disaggregated by categories 1-15. GHG inventories also include biogenic emissions, but these are reported separately from the scopes. |
| Freeriding | [From VCI Apparel & Footwear Value Chain Intervention Guidance] Freeriding is when certain organisations or actors within a supply chain rely on the sustainability efforts of others without actively engaging in their own efforts to reduce emissions. |
| Functional equivalency | [From Achieving Net Zero Through Value Chain Mitigation Interventions: Exploring Accounting, Monitoring & Assurance in Food and Agriculture] Functional equivalency refers to an equivalent type and level of activity of goods or services provided between the Intervention and the baseline scenario. It refers to goods and services of similar enough type and equal quality that can deliver the same level of service and therefore serve the same market segment at a national or sub-national level. |
| Green (or Environmental) claim | [From the European Commission’s Green Claims Directive (proposal COM/2023/166 final)] Any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time. |
| Harvested area | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] A spatially explicit area of productive agricultural land that was harvested at a given time to produce the relevant raw material. |
| Harvested area specific emission factor | [From VCI Food & Ag Working Group IV] The EF related to one specific area of agricultural land that was harvested at a given time to produce the good of interest. See ‘emission factor’ definition in this list. |
| Identity Preservation CoC model | [From ISEAL CoC Models and Definitions, v2.0, 2025] A CoC model in which certified materials from a single source are kept physically separate from non-certified materials and materials from different sources, from initial input to final output (adapted from ISO 22095:2020) |
| Impact layer | [From SustainCERT Verification Requirements V0.91] An impact layer is one or various steps taken by a good within its value chain journey such as production, processing, and packaging. |
| Impact Unit | Verified absolute emission reduction or removal enhancement (in metric tonnes CO2e) that results from a delta between GHG emissions of the baseline and the scenario of an Intervention and which are linked to an impacted amount of product. |
| Impact traceability | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] The ability of a company to identify, track, and collect information on the GHG emission or removal impacts of projects or Interventions in the value chain of goods and services purchased or sold by the company, including upstream and downstream processes and products. [see traceability] |
| Insetting | There are multiple definitions for the term “insetting” and no standardisations, which makes it difficult to give a clear determination of what can and can’t be included within Scope 3 reductions. |
| Integration approaches | [From VCI Food & Ag Working Group IV] Integration approaches use partial inventory data. It means that only the emissions for the SSRs that are affected by the Intervention are updated. To achieve this there are two ways: subtraction and substitution (see respective definitions). |
| Interventions | [From VCI Guidance 1.1] An umbrella term for any action that introduces a change to a Scope 3 activity. This could include a new technology, practice, or supply change (for example, to a different product input) to reduce or remove emissions. An Intervention may include changes to several activities that reduce or sequester emissions in different ways and that may or may not be included within the Scope 3 inventory. An Intervention can consist of one or several activities of the same or different type following the same validation and verification cycle. |
| Intervention accounting | See ‘Project accounting’. |
| Inventory accounting | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] Accounting for GHG emissions, removals, and other accounting categories over time within a defined inventory boundary relative to a historical base year. Inventory accounting is a type of attributional accounting. See ‘attributional accounting’. |
| Jurisdiction | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] A predefined, spatially explicit area based on a political boundary where biogenic products or raw materials are sourced from. This includes political boundaries based on a subnational jurisdiction (e.g., state or province), country, or political region (e.g., the European Union) of origin. |
| Land Management Unit | [From GHG Protocol Land Sector and Removals Standard and Guidance Technical Working Group updates] A predefined, spatially explicit area of a given land use, managed according to a clear set of objectives according to a single land management plan to produce a given raw material or set of raw materials. The Land Management Unit (LMU) boundary can include proximate and adjacent lands under certain conditions. A LMU may represent spatially explicit areas such as a farm, field, or plot. |
| Land Management Unit emission factor | [From VCI Food & Ag Working Group IV] The EF representing the emissions from one good (e.g., a crop or raw milk) from the land management unit in a given year (the farm, field, or plot). See ‘emission factor’ definition in this list. |
| Level of assurance | The degree of confidence stakeholders can have over the information in the inventory report. |
| Limited level of assurance | [From ISO 14064-3] In the context of verification of projects, a limited level of assurance means that the verification risk is higher than in the case of a reasonable level of assurance, that the nature, timing, and extent of evidence gathering activities is deliberately less than for a reasonable level of assurance but still results in assurance that is meaningful to intended users. This results in a negative opinion, e.g., “Based on the process and procedures conducted, there is no evidence that the GHG statement is not materially correct and is not a fair representation of GHG data and information.” |
| Local (servicing area) Supply Shed | [From VCI Food & Ag Working Group IV] An area defined by a radius or area serviced by the supplier or geopolitical borders on a sub-regional level, for example, municipalities or single provinces. Note that when designing custom Supply Sheds based on a sourcing radius, the scale of the Shed will reflect a certain geographical size but may not (entirely) follow jurisdictional borders. Can be leveraged as ‘sourcing regions’ providing that it complies with the condition of traceability to one or more first point(s) of aggregation. See ‘Supply Shed’ definition in this list. |
| Market-based instrument | [From European Environment Agency glossary based on UNEP’s definition] Market-based instruments seek to address the market failure of ‘environmental externalities’ either by incorporating the external cost of production or consumption activities through taxes or charges on processes or products, or by creating property rights and facilitating the establishment of a proxy market for the use of environmental services. |
| Market-based mechanisms (or instrument) – Corporate GHG accounting context | [From VCI Position on market-based mechanisms – under development] Market-based mechanisms (MBMs) or market-based instruments (MBIs) are economic and financial mechanisms, that are design to incentivize, account for, and transfer greenhouse gas (GHG) reductions or removals and other environmental attributes. MBMs aim to correct market failures by assigning a value to environmental benefits and enabling financial flows that reward mitigation outcomes. MBMs can serve as tools to channel investment toward value chain decarbonization. MBIs often function similarly to financial instruments, such as bonds or securities, because they are governed by contracts between two or more parties. Those contracts define: – Who owns the rights to the mitigation outcomes or environmental benefit, – Who is responsible for delivering, verifying, or retiring them – How the transaction occurs, including the creation, transfer, or settlement of the environmental asset. MBMs can enable the partial or total decoupling of physical goods sourced by an entity from the environmental attributes (such as emissions reductions, carbon sequestration, or renewable energy generation) associated with those goods. Eligibility for inclusion in the GHG corporate reporting statements or inventories depends on additional criteria defined by GHG accounting standards. |
| Market-Based or Contractual reporting | [From VCI Position on market-based mechanisms – under development] Quantifying and reporting GHG emissions, particularly Scope 2 and Scope 3, based on contractual instruments that reflect impact traceability to the environmental attributes (i.e., emissions intensity or emission factor) of purchased energy or commodities (e.g., RECs, PPAs, or book-and-claim mechanisms). |
| Mass Balance CoC model | [From ISEAL CoC Models and Definitions, v2.0, 2025] A CoC model in which certified input materials are mixed according to defined criteria with non-certified materials, and where certified volumes may be attributed non-proportionally to corresponding output materials (adapted from ISO 22095:2020) |
| Monitoring, Reporting and Verification | [From WRI MRV 101: Understanding Measurement, Reporting, and Verification of Climate Change Mitigation] Effective mitigation of climate change requires a clear understanding of greenhouse gas emissions and their sources, and regular monitoring of mitigation strategies and their impacts. The practice of “MRV,” integrates three independent-but-related processes of measurement or monitoring (M), reporting (R), and verification (V). |
| Multi-country (market) Supply Shed | [From VCI Food & Ag Working Group IV] Very large macro-sheds including multiple countries. Applicable for certain commodities for which the first point of aggregation receives volumes from across countries. See ‘Supply Shed’ definition in this list. |
| Neutralization of residual emissions | [From SBTi Synthesis report of evidence on the effectiveness of EACs in corporate climate targets – Part 1: Carbon credits] Measures that companies take to counterbalance the climate impact of unabatable (i.e. residual) GHG emissions which are released into the atmosphere at and after net-zero target date through permanent removal and storage of CO2 from the atmosphere. |
| Overcounting | {Adapted from VCI Apparel & Footwear Value chain Intervention Guidance. Driving the decarbonization of the Apparel & Footwear value chain] Overcounting occurs where the same GHG emission reductions or removals are counted more than once across different reporting sheets by different entities. For instance, the same reductions may appear both in the Scope 3 inventory emissions (physical) and in the MBM emissions adjacent to VC. This would be the form of “permissible double-counting” referred to as overcounting. |
| Performance GHG accounting | [From GHG Management Institute] Performance GHG Accounting pertains to program and policy reporting and implementation. Unlike traditional physical GHG accounting, which measures actual emissions and removals, performance GHG accounting focuses on tracking an organization’s progress toward specific goals, often incorporating incentives or penalties for GHG mitigation actions. It is a score-based method that provides a meaningful metric for assessing performance over time relative to GHG objectives. While it does not directly measure atmospheric GHG emissions or removals, it offers a broader view of a company’s overall GHG performance, reflecting its alignment with policy-driven targets. |
| Perverse incentives | [From VCI Building the case for value chain interventions: enabling credible co-claiming of impact and investments] Perverse incentives are incentives that result in undesirable consequences that the incentive giver didn’t foresee or that were considered manageable at an earlier phase. The term is typically used to illustrate how incorrect stimulation in economics and politics can have counterproductive results. |
| Physical traceability | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] Physical traceability is “when a company has the ability to identify, track, and collect information on activities (e.g., activity data or GHG emission or removals factors) related to material flows of goods and services in its value chain, across its upstream and downstream processes and products”. [see traceability] |
| Physical relationship | [From the VCI & ISEAL paper Traceability in GHG accounting, based on ISEAL CoC Models and Definitions, v2.0, 2025] A physical relationship means that specified characteristics are physically present in the material. Models that provide this physical relationship are Identity Preservation, Segregation and Controlled Blending. |
| Physical connectivity | [From the VCI & ISEAL paper Traceability in GHG accounting, based on ISEAL CoC Models and Definitions, v2.0, 2025] Physical connectivity means there is a likelihood that specified characteristics are physically present in the material claimed, but this presence cannot be ensured. Models that provide this physical connectivity are the variants of Mass Balance (under certain conditions – physical connectivity in mass balance CoC system is not a given). |
| Physical GHG emissions inventory reporting | {Adapted from GHGP and From GHG Protocol Land Sector and Removals Standard and Guidance Technical Working Group updates} Quantification and reporting of organizational greenhouse gas (GHG) emissions based on actual physical flows within a company’s value chain activities (categorized into scopes 1, 2, and 3) where the activities or commodities are physically linked to the emissions attributes through a traceability mechanism. |
| Pre-intervention year | [From the VCI Food&Ag V_Output 2025] Historical or current year (or range of years) against which changes in emissions are tracked over time prior to the implementation of an intervention or practice change, in case this is a different year from the target base year. Also called project-level base year. |
| Pre-intervention emissions | [From the VCI Food&Ag V_Output 2025] The (approximated) GHG emissions accounted for in the inventory in the pre-intervention year. This could be characterized as GHG emissions intensity (tCO2e/t crop or product). |
| Primary data | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] Data from specific activities within a company’s operations or value chain (e.g., site-specific data). Primary data can be based on measurements, models, or other methods and is not necessarily generated by the reporting company. |
| Productive land | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] The physical areas of land used to produce a crop, livestock, animal product, or other biogenic product or service, or multiple products as part of a crop rotation, in the reporting year, or the physical areas of land where a sold product was applied in the reporting year. |
| Product groups (in CoC context) | [From ISEAL CoC Models and Definitions, v2.0, 2025] groups of input and output products that are treated as equivalent for the purpose of tracking, controlling and reconciling volumes within the CoC system boundaries |
| Product system | A product system is a set of product system links related to each other with mass balance and allocation factors. It contains the various impact layers that can exist for each good as well as the different child goods that can be obtained from it. Child goods are necessarily obtained at impact layers below the impact layer of the parent transformation, but parent and child goods can coexist at the same impact layer as competitive usage. Mass balance factors are used to describe how much of a child good is obtained from 1 kg of its parent. Allocation factors are used to describe how impacts should be allocated between the different child goods in case of co-production. |
| Progress (of science-based targets) | [From SBTi Glossary v1.2] Advancement towards achieving an established target prior to the target year and a[er the base year. Progress refers to actions and/or improvements in performance that demonstrate, or serve as credible proxies for, positive change towards fulfilling commitment. |
| Project accounting | [From GHG Protocol Land Sector and Removals Guidance Draft] Project accounting (also known as “Intervention accounting methods”) is a type of consequential accounting and provides an assessment of the GHG emissions of actions relative to counterfactual baseline scenarios (conditions most likely to occur in the absence of the action) or other performance standards. See ‘consequential accounting’. |
| Proof of Sourcing | [Adapted from SustainCERT] Product-backward traceability system that enables companies to retrospectively demonstrate a credible link between purchased goods and an Intervention site or supply shed, ensuring that reported GHG outcomes are attributable to them. It relies on auditable documentation to validate that the goods originated from the targeted supply shed, using consistency checks rather than continuous CoC system. |
| Proof of Sourcing | [Adapted from SustainCERT] Product-backward traceability system that enables companies to establish a credible link after impacted goods have passed through the value chain, thus, establish an ‘ex-post right to claim’. Proof of Sourcing (PoS) allows companies to retrospectively validate their connection to the Supply Shed, ensuring that reported emissions reductions are attributable to them. |
| Proportional substitution | [From VCI Food & Ag Working Group IV] Proportional substitution is an idea which is currently under development. It is an integration approach that aims to solve the challenge of when emissions after the Intervention are actually higher than the EF included in the inventory. Proportional substitution would allow for a ‘screening out’ of the high emitting farms, and an adaptation of the remaining EF distribution. |
| Regional Supply Shed | [From VCI Food & Ag Working Group IV] An area defined by geopolitical boundaries on a sub-national level (e.g., a state or one or more provinces). Designing Supply Sheds at regional level could allow for the inclusion of ecological conditions. Can be leveraged as ‘sourcing regions’ providing that it complies with the condition of traceability to one or more first point(s) of aggregation. See ‘Supply Shed’ definition in this list. |
| Registry | [From the Nordic Code for Voluntary Use of Carbon Credits] A database for tracking the issuance, transfers, and use of carbon credits. |
| Removal | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] The net transfer of a greenhouse gas from the atmosphere to storage within a non-atmospheric pool. |
| Removals factor | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] A value that estimates the quantity of removals per unit of activity (e.g., per ton of product produced), allowing absolute removals to be estimated from activity data. |
| Reporting | Presenting data to internal management and external users such as regulators, shareholders, the general public, or specific stakeholder groups. |
| Residual emission factor | [From VCI Food & Ag Working Group IV] The EF for all the other farms in the sourcing region/Supply Shed that have not been included in the stratified EF. This is a means to avoid double counting. See ‘emission factor’ definition in this list. |
| Right to report | [Adapted from Making value chain decarbonisation a scalable reality. Role of Scope 3 systems in enabling collective action and co-investments] A requirement that establishes some elements to specify who can claim Scope 3 reductions/removals through some sort of evidence (e.g., contractual agreements). |
| Scope 1 emissions | [From GHG Protocol Corporate Value Chain (Scope3) Standard] Emissions from operations that are owned or controlled by the reporting company. |
| Scope 2 emissions | [From GHG Protocol Corporate Value Chain (Scope3) Standard] Emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company. |
| Scope 3 emissions | [From GHG Protocol Corporate Value Chain (Scope3) Standard] All indirect emissions (not included in Scope 1 or 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. |
| Secondary data | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] Data that is not from specific activities within a company’s operations or value chain (e.g. proxy or regional average data). |
| Segregation CoC model | [From ISEAL CoC Models and Definitions, v2.0, 2025] A CoC model in which certified materials are kept physically separate from non-certified materials from initial input to the final output (adapted from ISO 22095:2020) |
| Sourcing region | [From GHG Protocol Land Sector and Removals Standard and Guidance Technical Working Group updates] A predefined, spatially explicit land area that supplies a given raw material to the first point of aggregation or first processing facility in a value chain. May be inclusive of multiple first points of aggregation. |
| (GHG) Statement | [based on AMI TWG GHG Protocol developments] A quantified list summarizing GHG emissions, removals, or mitigation outcomes, aligned with defined boundaries and prepared in accordance with consistent accounting criteria. |
| Sourcing region/Supply Shed emission factor | [From VCI Food & Ag Working Group IV] The EF for all attributable productive lands producing the same good or commodity that are being sourced by the reporting company within the boundaries of the sourcing region/ Supply Shed. See ‘emission factor’ definition in this list. |
| Specified characteristics | [From ISEAL CoC Models and Definitions, v2.0, 2025] A set of production, material and product characteristics that the CoC is designed to maintain (ISO 22095:2020) |
| Stranded assets | [Adapted from SustainCERT Challenges and Solutions for Allocating Greenhouse Gas Mitigation Outcomes: Contextualized in the Agricultural Supply Chain] Stranded assets refer to investments made by reporting companies in Value Chain Interventions, that do not lead to a direct return on investment by the company, either through the potential for claims (e.g. reductions towards targets) or even the potential for a financial ROI (e.g. through the sales of credits). For example, in the case of co-products, as GHG mitigation outcomes are bound to specific goods, the GHG mitigation outcomes cannot be claimed on other goods not relevant to the investor and thus the investment in the Intervention causing such GHG mitigation outcomes is ‘stranded’ if no other off-takers are found. |
| Stratified emission factor | [From VCI Food & Ag Working Group IV] The EF for a subset of farms within a sourcing region/Supply Shed that share common characteristic (e.g., similar practices, part of a program, certified). See ‘emission factor’ definition in this list. |
| Substitution | [From SustainCERT and VCI Food & Ag WG IV] Substitution is an inventory accounting method to integrate post-Intervention data by isolating individual components of an emission factor and replacing this with more accurate estimates specific to the value chain for a given year, updating the average data from the default EF. |
| Subtraction | [From VCI Food & Ag Working Group IV] Subtraction, also known as deduction, or “netting”, is an integration approach that involves adjusting the total tCO2e in an inventory by subtracting the tCO2e generated by a project. The subtraction can be applied at all levels of the inventory e.g., by categories, by inventory item, by activities. |
| Supply chain | A supply chain is a network of individuals and companies that are involved in creating a product and delivering it to the consumer. Links in the chain begin with the producers of the raw materials and end when the finished product is delivered to or collected by the end user. |
| Supply Shed | [From Food & Ag Working Group IV] A Supply Shed is a group of suppliers providing functionally equivalent goods or services within a fixed and spatially defined area that is demonstrably part of a company’s supply chain. The Supply Shed includes all suppliers within designated boundaries, regardless of their practices or segmentation. |
| Supply Shed re-allocation | [From SustainCERT Challenges and Solutions for Allocating GHG Mitigation Outcomes: Contextualized in agricultural supply chain] The expansion of the allocation boundaries to incorporate the volumes of the same target crop from the rotation or by-product that is produced elsewhere in the same Supply Shed where the Intervention did not occur. |
| Target base year (=Base year) | [From SBTi Glossary] A historic datum (a specific year or, in the case of a base period, an average over multiple years) against which a company’s emissions are tracked over time. (SBTi Glossary) Often also called “base year” or “inventory base year”. |
| Target base year emissions | [From Food & Ag V Output] The emissions in the inventory in the target base year, quantified in an emissions factor, showing the (approximated) emissions in a given (historical) year for the crop/ product reported. This is sometimes also called inventory baseline. |
| Temporal boundaries | [Based on ISEAL CoC Models and Definitions, v2.0, 2025] Temporal boundaries refer to the timeframes within which material inputs and outputs must be reconciled |
| Theory of Change | [Adapted from UN Development Group Theory of Change] The Theory of Change of an Intervention depicts the causal pathways from outputs through outcomes via intermediate states towards impact. A Theory of Change is a method that explains how a given Intervention, or set of Interventions, is expected to lead to a specific change in emissions due to anthropogenic activities, drawing on a causal analysis based on available evidence, respecting of the environmental integrity definition, with an adequate level of assurance. |
| Traceability | [From ISEAL CoC Models and Definitions, v2.0, 2025] Traceability is the ability to track and verify the history and location of a material’s movement through defined stages of production, processing and distribution (adapted from ISO 22095:2020) [From GHG Protocol Land Sector and Removals Standard and Guidance Technical Working Group updates] The ability of a company to identify, track, and collect information in the value chain of goods and services purchased or sold by the company, including upstream and downstream processes and products. In the GHG Protocol interim traceability requirements (under development – see section 1.3.2.) two types of traceability are defined: physical traceability and impact traceability (see respective definitions in this glossary). |
| Traceability system | [From the forthcoming GHG Protocol Land Sector and Removals Standard and Guidance] A set of procedures that allow an entity to track and record how specific materials or products move across entities and are transformed throughout their value chain, from production to processing to end use. |
| Transfer boundary (in CoC context) | [From ISEAL CoC Models and Definitions, v2.0, 2025] The spatial boundaries in which the transfer of specified characteristics between inputs and outputs is controlled and tracked. |
| Transferability of impact | [From VCI Building the case for value chain interventions: enabling credible co-claiming of impact and investments] Transferability of impact refers to the presence of mechanisms enabling potential claimants to access and utilise distributed impact. This can be achieved through various means such as credits, Impact Units, or other proxies that enable accurate attribution. |
| Uncertainty | In general, uncertainty relates to the imperfection in data inputs (from inventory accounting and modelling efforts) used to estimate emission levels. [From Greenhouse Gas Protocol guidance on uncertainty assessment in GHG inventories and calculating statistical parameter uncertainty] The GHG Protocol defines uncertainty as twofold: (1) Quantitative definition: Measurement that characterises the dispersion of values that could reasonably be attributed to a parameter. (2) Qualitative definition: A general and imprecise term that refers to the lack of certainty in data and methodology choices, such as the application of non-representative factors or methods, incomplete data on sources and sinks, lack of transparency etc. |
| Value chain | A value chain is a series of consecutive steps that go into the creation of a finished product, from its initial design to its arrival at the customer. The chain identifies each step in the process at which value is added, including the sourcing, manufacturing, and marketing stages of its production. [From GHG Protocol Corporate Value Chain (Scope3) Standard] Value chain refers to all of the upstream and downstream activities associated with the operations of the reporting company, including the use of sold products by consumers and the end-of-life treatment of sold products after consumer use. |
| Value Chain Abatement (VCA) | [Adapted from SBTi Glossary] Measures that companies take to prevent, reduce, or eliminate sources of GHG emissions within their value chain. Examples include reducing energy use, switching to renewable energy, and reducing chemical fertilizer use. |
| Volume reconciliation (in CoC context) | [Adapted ISEAL CoC Models and Definitions, v2.0, 2025] The balancing of input and output of materials with specified characteristics, such that the volume of output materials with specified characteristics does not exceed the volume of input materials (over an agreed upon certain timeframe), accounting for conversion factors and loss |
Acronyms
| Acronym | Definition |
| CoC | Chain of Custody |
| EF | Emission Factor |
| EAC | Environmental Attribute Certificates |
| GHG | Greenhouse Gas |
| GHG P | Greenhouse Gas Protocol |
| ISO | International Organization for Standardization |
| LSRG | Land Sector and Removals Guidance Draft |
| LSRS | Land Sector and Removals Standard |
| LCA | Life Cycle Assessment |
| LMU | Land Management Unit |
| MRV | Monitoring, Reporting, and Verification |
| PoA | Point of Aggregation – this could also be a first Point of Collection, Processing or other. |
| PoS | Proof of Sourcing |
| SBTi | Science Based Targets initiative (SBTi) |
| SBTi FLAG | Science-Based Targets Initiative’s (SBTi) guidance for Forest, Land and Agriculture (FLAG) |
| SSR | Sources, sinks, and reservoirs |
| VCI | Value Change Initiative |
| VCM | Voluntary Carbon Market |
| WG | VCI Working Group |
