Why are some organizational boundary fields flagged?

Organizational boundaries define the scope of the entities (e.g., subsidiaries, joint ventures) and assets included within a reporting company’s GHG emissions inventory. These boundaries are foundational to emissions accounting, akin to the principle of consolidation in financial reporting. Given the variation that exists in legal and organizational structures across companies, organizational boundaries are essential for understanding the businesses and activities that constitute the company for GHG emissions accounting purposes.

The Greenhouse Gas Protocol defines three standard approaches for consolidating GHG emissions: equity-share, operational control and financial control. Under equity share, a firm accounts for emissions in proportion to its share of equity in operations, whereas under the control approaches, a firm accounts for 100% of the emissions from any operations it operationally or financially controls, respectively. These approaches are the most globally used and recognized for defining an organization's GHG emissions responsibility, and provide a common framework for comparing company emissions disclosures.

When a company does not disclose an organizational boundary or does not align with one of the standard GHG Protocol boundaries above, the NZPDU displays an icon to alert users that this data may not be comparable or to take consideration when conducting comparisons with these disclosures. For emissions data disclosed without any organizational boundary at all, it is not possible to determine the scope of inclusion of the reporting entity’s business activities in the GHG inventory, affecting comparability with other companies’ disclosures as well as the entity's own past disclosures. Meanwhile, although uncommon, some companies do report emissions using alternative, non-GHG Protocol-aligned boundaries that they themselves have uniquely defined. With sufficient contextual information, the inventories of these companies can be understood, but the unique nature of the boundaries without standard definitions means that comparability to other disclosures is impacted.