GCMU Ledgers
What are ledgers, and why does the GCMU need to manage them?
In accounting, ledgers are a record of all financial transactions. They are integral in generating corporate financial statements.
Because one of the GCMU’s goals is to help develop financial reporting practices that can withstand the scrutiny of auditors and regulators—especially if the SEC and other regulators adopt stricter disclosure requirements for emissions and offsets—it’s imperative that the GCMU works to improve recordkeeping practices for carbon offsets so that they align with the data-input requirements of corporate ledgers.
Since ledgers are subject to audits, they are the vehicle to connect climate activity to existing regulatory frameworks for public disclosure. They make it possible to analyze a company’s direct, measurable, and auditable net climate impact and to produce a detailed and independent climate impact review of the GCMU’s total activity.
The GCMU will provide the infrastructure to make disparate project data suitable for use in corporate financial statements.
Climate mitigation projects vary widely. A structured standardization process is required to make project data comparable and, therefore, more usable by corporate buyers.
The GCMU will manage three ledgers, and the Governing Council will continually update the rules for each ledger.
What ledgers will the GCMU oversee?
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Will document all projects, measurement protocols, deposit tiers, and audit processes. All project data recorded in this database will be available for public review.
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Will record the common units of CO2 emissions-reduction equivalents for each deposit available for purchase by vintage. It will document the transformation of a physical project to offset units. This ledger will use the vintaged equivalence determinations set by the Governing Council to standardize deposits. It will be subject to audit and available for public review.
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Will document the assignment of deposits in each vintage to buyers to ensure offsets are not bought twice. This ledger will be externally audited and available for public review.
The GCMU’s ledgers are constructed so that data from one flows into the next. Measurements recorded in the project ledger form the basis of deposits in the deposit ledger. Records of sale and ownership are kept in the offset ledger.