When GHG Verification Is Required: CDP, GRI, CBAM & Beyond

The GHG Verification Landscape

The question "do we need GHG verification?" has evolved from a simple yes/no into a nuanced analysis of regulatory obligations, voluntary commitments, stakeholder expectations, and competitive positioning. A decade ago, only participants in cap-and-trade schemes needed mandatory verification. Today, the verification landscape encompasses regulatory mandates, disclosure frameworks, corporate commitments, and supply chain requirements — each with different triggers, scopes, and standards.

This article maps the full landscape of GHG verification requirements as of early 2026, from legally binding mandates to market-driven expectations. For each context, we explain: who is required or expected to obtain verification, what scopes and standards are specified, what assurance level is needed, and what the consequences of non-compliance or non-verification are.

Regulatory Requirements: Where Verification Is Mandatory

Regulatory verification requirements are legally binding. Non-compliance carries financial penalties, operational restrictions, or legal consequences.

EU Emissions Trading System (EU ETS)

The EU ETS is the world's largest carbon market and has required mandatory verification since its inception in 2005. Every installation covered by the EU ETS — approximately 10,000 stationary installations and airline operators across the EU and EEA — must submit an annual emissions report verified by an accredited verifier.

What must be verified: Annual greenhouse gas emissions from covered activities (combustion, industrial processes, aviation), reported according to the EU Monitoring and Reporting Regulation (MRR).

Verification standard: The EU Accreditation and Verification Regulation (AVR), which is aligned with ISO 14064-3 and ISO 14065. Verifiers must be accredited by a national accreditation body that is a member of the European co-operation for Accreditation (EA).

Assurance level: Reasonable assurance is required. The verifier must express a positive-form opinion that the emissions report is free from material misstatement.

Deadline: Verified emissions reports must be submitted to the competent authority by March 31 each year for the preceding calendar year.

Consequences of non-compliance: If an operator fails to submit a verified report, the competent authority estimates emissions conservatively. Excess emissions incur a penalty of €100/tonne CO₂e (indexed for inflation), and the obligation to surrender allowances is not extinguished by payment of the penalty.

UK Emissions Trading Scheme (UK ETS)

Following Brexit, the UK established its own emissions trading scheme, operational since January 2021. The UK ETS mirrors the EU ETS in its verification requirements.

What must be verified: Annual emissions from covered installations and aviation operators, reported under the UK Greenhouse Gas Emissions Trading Scheme Order 2020 and associated MRV legislation.

Verification standard: UK-accredited verifiers operating under the UK Accreditation Service (UKAS). Requirements are closely aligned with ISO 14064-3 and the EU AVR model.

Assurance level: Reasonable assurance required.

Consequences: Civil penalties for late or non-submission, conservative emission estimation by the regulator (Environment Agency in England), and potential inclusion on published non-compliance lists.

California Cap-and-Trade Program

California's cap-and-trade program, administered by the California Air Resources Board (CARB), covers approximately 450 entities responsible for roughly 85 percent of the state's GHG emissions.

What must be verified: Annual GHG emissions reported under CARB's Mandatory Reporting Regulation (MRR). Covered entities include industrial facilities emitting 25,000+ tCO₂e/year, electricity generators, electricity importers, and fuel suppliers.

Verification standard: CARB's Regulation for the Mandatory Reporting of Greenhouse Gas Emissions specifies verification requirements. Verifiers must be accredited by CARB (not a general accreditation body). CARB's verification protocols are specific to the program and do not directly reference ISO standards, though they share similar principles.

Assurance level: Positive verification statement required. The verifier must determine that the emissions data report contains no material misstatement (materiality threshold of 5%).

Unique feature: California requires a "full" verification in the first year and allows "less-than-full" verification in subsequent years of a three-year cycle, reducing cost while maintaining rigor.

EU Carbon Border Adjustment Mechanism (CBAM)

CBAM is a landmark regulation that extends carbon pricing to imports of carbon-intensive goods, preventing "carbon leakage" where production moves to jurisdictions without carbon pricing. CBAM entered its transitional phase in October 2023, with the definitive phase beginning January 1, 2026.

Who is affected: EU importers of goods in six covered sectors: cement, iron and steel, aluminium, fertilizers, electricity, and hydrogen.

What must be verified: Embedded emissions in imported goods — the direct (Scope 1) emissions from the production process and, for certain goods, also the indirect (Scope 2) emissions from electricity consumed during production. From 2026, importers must purchase CBAM certificates corresponding to verified embedded emissions.

Verification standard: Verification must be performed by an accredited verifier in accordance with the CBAM Implementing Regulation. The European Commission has issued detailed verification rules that draw on ISO 14064-3 principles and the EU ETS AVR framework.

Impact on non-EU producers: Non-EU manufacturers exporting to the EU must provide installation-specific production data verified by an EU-accredited verifier. This effectively exports the EU's verification requirements to the global supply chain. Non-EU producers without verified data will have default values applied — typically based on the average emission intensity of the worst-performing 10% of EU installations — resulting in significantly higher CBAM costs for the importer.

EU Corporate Sustainability Reporting Directive (CSRD)

CSRD, which took effect in January 2024 with phased applicability, requires in-scope EU companies and non-EU companies with significant EU operations to report sustainability information according to the European Sustainability Reporting Standards (ESRS). ESRS E1 specifically addresses climate change, including GHG emissions.

Assurance requirement: CSRD mandates limited assurance on all sustainability reporting (including GHG emissions) from the first applicable reporting period. The EU intends to transition to reasonable assurance by 2028, subject to a feasibility assessment.

Who provides assurance: The statutory auditor or an independent assurance services provider. Member states may allow assurance by practitioners other than the statutory auditor.

Scope: Assurance covers all ESRS disclosures, including Scope 1, 2, and 3 emissions, emission reduction targets, and the transition plan. This is broader than traditional GHG verification because it extends to qualitative disclosures and forward-looking information.

Voluntary Disclosure Frameworks

These frameworks do not legally mandate verification, but make it a significant factor in scoring, credibility, and stakeholder trust.

CDP (formerly Carbon Disclosure Project)

CDP operates the world's largest environmental disclosure platform, processing responses from over 23,000 companies in 2025. While CDP does not require verification as a condition of submission, verification status is a critical scoring differentiator.

Verification in CDP scoring:

• Companies must indicate whether their Scope 1, 2, and 3 emissions have been verified and, if so, by whom and to what standard.
• Verification of at least 70% of reported Scope 1 and 2 emissions is a prerequisite for Management level and above.
• Scope 3 verification earns additional points and is increasingly expected for Leadership level (A and A-).
• Reasonable assurance scores higher than limited assurance.
• Accredited third-party verifiers score higher than non-accredited or internal verifiers.
• The verification must cover the same reporting period as the CDP submission. A prior-year statement applied to the current year is flagged.

Practical impact: For companies seeking an A or A- score on CDP Climate Change, third-party verification of Scope 1, 2, and increasingly Scope 3 is effectively mandatory. The scoring penalty for non-verification makes it nearly impossible to achieve Leadership level without it.

GRI 305: Emissions

The Global Reporting Initiative (GRI) does not mandate verification of emissions disclosures. However, GRI 2: General Disclosures (2021) includes Disclosure 2-5 which asks organizations to describe their external assurance practices and identify which reported information has been externally assured.

GRI's position is that external assurance enhances credibility and stakeholder confidence. Organizations that report under GRI and obtain verification should ensure the verification scope matches the GRI reporting boundary. The most common gap is organizations that verify only headquarters or major facilities but report GRI emissions for the entire group — a boundary mismatch that attentive readers will notice.

Reporting Frameworks and Standards

Reporting frameworks and standards set the rules for what and how to disclose. Several are moving toward requiring or expecting assurance on emissions data.

ISSB/IFRS S2: Climate-related Disclosures

IFRS S2, published by the International Sustainability Standards Board in June 2023, establishes disclosure requirements for climate-related risks and opportunities, including Scope 1, 2, and 3 emissions. IFRS S2 itself does not mandate assurance — that is left to jurisdictional adoption.

However, jurisdictions adopting ISSB standards are adding assurance requirements:

• EU (via CSRD/ESRS): Limited assurance from the first reporting period, with a planned transition to reasonable assurance.
• Australia: Mandatory climate disclosure under the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 includes phased assurance requirements.
• Singapore: The Accounting and Corporate Regulatory Authority (ACRA) requires external assurance on climate-related disclosures for listed entities from FY2027.
• Japan: The Financial Services Agency's Sustainability Standards Board of Japan (SSBJ) standards include assurance expectations aligned with ISSA 5000.

The International Auditing and Assurance Standards Board (IAASB) has published ISSA 5000 — the International Standard on Sustainability Assurance — which provides the global framework for sustainability assurance engagements, including GHG emissions.

TCFD Recommendations

The Task Force on Climate-related Financial Disclosures (TCFD) recommended that organizations disclose Scope 1, 2, and (if appropriate) Scope 3 emissions. While TCFD did not mandate verification, it stated that "independent verification or assurance of metrics and targets provides increased confidence in the reliability of information." Jurisdictions that have adopted TCFD-aligned mandatory disclosure (UK, Japan, New Zealand, Hong Kong) generally follow a similar path toward adding assurance requirements.

Corporate Commitments and Voluntary Initiatives

Organizations that have made public climate commitments often face implicit or explicit expectations for verified emissions data.

Science Based Targets initiative (SBTi)

SBTi sets the global standard for science-based climate target-setting. Over 4,000 companies have committed to SBTi targets as of 2025.

Current requirements: SBTi's criteria require that emissions inventories used for target-setting and tracking follow the GHG Protocol. SBTi "strongly recommends" that companies obtain independent third-party verification of their GHG inventories but does not currently make it a formal prerequisite for target validation.

Practical reality: SBTi validators scrutinize the quality and methodology of submitted inventories. Companies with verified inventories experience smoother validation processes and fewer data challenges. Investors and stakeholders increasingly view verification as a credibility marker for SBTi commitments — a company with an SBTi target but unverified emissions data raises questions about the reliability of its baseline and progress tracking.

Net-Zero Standard: SBTi's Corporate Net-Zero Standard, which requires long-term targets alongside near-term targets, places even greater emphasis on data quality. As net-zero claims face increasing scrutiny for greenwashing, verification becomes essential for credibility.

Net-Zero Pledges and Climate Coalitions

Corporate net-zero pledges — whether made through SBTi, the United Nations Race to Zero, or independently — create an implicit expectation that the underlying emissions data is credible. The UN High-Level Expert Group on Net-Zero Commitments (2022) explicitly recommended that all net-zero pledges be "backed by verified emissions data." Climate Action 100+, the investor engagement initiative, includes verified emissions disclosure in its benchmark of corporate climate action.

Supply Chain and Procurement Requirements

One of the fastest-growing drivers of GHG verification is supply chain pressure. Large buyers are requiring their suppliers to provide verified emissions data as a condition of continued business.

Why Supply Chain Verification Is Growing

The logic is straightforward: if a company's Scope 3 emissions represent 80 percent of its footprint, and if stakeholders expect that footprint to be credible, then the underlying supplier data must also be credible. Companies cannot verify their own Scope 3 inventory without confidence in the supplier data that feeds it.

Examples of Supply Chain Verification Mandates

• Apple: Requires suppliers in its manufacturing chain to report and verify emissions, and provides tools and training for supplier carbon accounting.
• Walmart: Through Project Gigaton, asks suppliers to set science-based targets and report progress. Preferred supplier status increasingly requires verification.
• Automotive OEMs: Major manufacturers (BMW, Mercedes-Benz, Volkswagen) are requiring tier-1 suppliers to provide product carbon footprints conforming to the Catena-X data exchange framework, with verification by approved third parties.
• Construction sector: Environmental Product Declarations (EPDs) conforming to EN 15804 require third-party verification of the underlying life cycle assessment, including GHG emissions from cradle to grave.
• Financial institutions: Banks and asset managers joining the Net-Zero Banking Alliance (NZBA) or Net-Zero Asset Owner Alliance (NZAOA) face growing expectations to verify the financed emissions data used for portfolio target-setting.

CDP Supply Chain Program

CDP's Supply Chain program enables purchasing organizations to request environmental disclosure from their suppliers through the CDP platform. Over 280 major purchasing organizations used the program in 2025, reaching thousands of suppliers globally. Suppliers that provide verified emissions data score higher in the program and receive preferential recognition from the purchasing organizations. For many suppliers, a CDP Supply Chain request is their first encounter with verification expectations.

Comparison Table: Verification Requirements by Scheme

The following table summarizes verification requirements across major regulatory, disclosure, and voluntary schemes.

Practical Guidance: Determining Your Verification Needs

With the landscape mapped, organizations need a practical framework for deciding what level of verification to pursue.

Step 1: Map Your Obligations

Start by identifying all regulatory, contractual, and voluntary commitments that touch GHG verification. This includes: cap-and-trade participation (EU ETS, UK ETS, California, K-ETS, etc.), CBAM exposure (do you export covered goods to the EU, or import them?), CSRD applicability (are you in scope based on size, EU operations, or listing?), CDP response (are you requested by investors or customers?), SBTi commitment, supply chain agreements, and financing covenants (some green bonds and sustainability-linked loans require verified emissions).

Step 2: Determine Required Scope and Level

For each obligation, identify: which scopes must be verified (Scope 1 only? Scope 1 and 2? All three?), what assurance level is required or expected (limited or reasonable?), whether a specific verification standard is mandated, and whether the verifier must be accredited by a specific body.

Step 3: Design a Consolidated Verification Engagement

Rather than obtaining separate verifications for different obligations, design a single verification engagement that satisfies all requirements simultaneously. For example, an EU company that participates in the EU ETS, reports to CDP, and is subject to CSRD can engage one accredited verifier to provide: reasonable assurance on Scope 1 under the EU AVR for ETS compliance, reasonable assurance on Scope 1 and 2 under ISO 14064-3 for CDP and general stakeholder purposes, limited assurance on Scope 3 under ISAE 3410 for CDP and CSRD, and coverage of all ESRS E1 disclosures for CSRD assurance.

This consolidated approach reduces cost, avoids conflicting opinions, and ensures consistency across reporting destinations.

Step 4: Plan for Escalation

Verification requirements are tightening. What is voluntary today may be mandatory tomorrow. Organizations should anticipate the trajectory and plan for: limited-to-reasonable assurance transition (CSRD timeline), Scope 3 verification (CDP, CSRD, supply chain), accredited verifier requirements (CBAM, ETS), and expanded scope of assurance (ESRS covers more than just emission numbers).

The strategic approach to GHG verification is not to verify the minimum required today, but to build toward the verification expectations of tomorrow. Organizations that invest in verification infrastructure now — data quality, internal controls, documentation, verifier relationships — will be better positioned as requirements tighten.

Frequently Asked Questions