The CarbonNeutral Protocol Index

Foundation: Governance

An organization making use of certification should establish appropriate governance processes, procedures and controls to enable delivery of its broader environmental and social goals. Strong governance starts with leadership putting the right frameworks in place; the integration of climate considerations can then trickle down across the organization.

A strong governance framework is developed and defined at the board level, which may include:

  • Board engagement, information and reporting to define the company’s Environmental, Social, and Governance (ESG) strategy, with climate change and ESG always on the Board’s agenda
  • ESG performance linked to executive pay and bonuses
  • Board structure, independence and diversity
  • Dedicated resource and expertise within the organization to deliver on goals
  • Effective management of conflicts of interest
  • Implementation of a responsible tax strategy
  • Building climate targets into financial decisions, including investment decisions
  • Reference to double materiality to identify key topics for the organization.

Organizations should also consider impacts beyond strictly their GHG emissions within their climate strategies, such as:

  • Social impacts and human rights
  • Conservation and enhancement of biodiversity and nature
  • Just transition and equity.

Finally, organizations’ communication and public policy advocacy should be aligned with their climate and ESG goals – including the global transition to a low-emissions economy in line with the Paris Agreement.