Glossary›Emissions accounting and measurement›Data quality hierarchy
Glossary term
Cluster D · D15
Tier 1 · differentiator
Data quality hierarchy
Definition
A data quality hierarchy ranks the sources behind an emissions figure from strongest to weakest, so the entity and its assurer can see where confidence is high and where it is not. AASB S2 does not publish a single ranked list. It sets four prioritisation characteristics and requires the entity to apply judgement in trading them off.
AASB S2 Appendix B
· paragraph B40 ·
In force
On this page
In practice
Most commercial software presents a tidy five-tier ladder and labels it “the data quality hierarchy”. The standard does not contain one, and knowing that changes how you document the judgement.
Appendix B paragraph B40 requires an entity measuring Scope 3 emissions to prioritise inputs and assumptions using four identifying characteristics, and it says explicitly that they are listed in no particular order.
Characteristic
Paragraphs
Data based on direct measurement
B43 to B45
Data from specific activities within the entity’s value chain
B46 to B49
Timely data that faithfully represents the jurisdiction of, and the technology used for, the value chain activity and its emissions
B50 to B52
Data that has been verified
B53 to B54
“In no particular order” is the operative phrase and it is where the ladder metaphor breaks. These four characteristics can conflict, and paragraph B42 says so directly: prioritisation requires management to apply judgement, and the standard’s own worked example is the trade-off between timely data and data more representative of the jurisdiction and technology, since more recent data may carry less specific detail while older, infrequently published data may be more representative.
So the obligation is not to climb a ladder. It is to make a reasoned trade-off across four dimensions and be able to explain it. That is a documented judgement, and a documented judgement belongs in the significant judgement register, not in a software setting.
Two further points from the same block. Paragraph B41 requires the Scope 3 measurement framework to be applied to prioritise inputs even where a jurisdictional authority requires a method other than the GHG Protocol, so an NGER reporter still applies it. And the framework is written for Scope 3; for Scope 1 and Scope 2 the evidence question is simpler because direct measurement is usually available, and the interesting judgements are about completeness rather than quality.
What a practical entity does with this is build a quality rating per inventory line, using the four characteristics as the axes, and record it in the inventory itself rather than in a separate memo. That single column does more work than any other documentation artefact: it tells the assurer where to test, it tells the board where the number is soft, and it tells next year’s preparer which lines to improve.
What the assurer does with it
The assurer uses the entity’s own quality ratings as a risk map and then tests whether the ratings are honest. Their controlling procedure is to sample lines the entity rated high and confirm the underlying evidence justifies the rating.
An optimistic rating is worse for the entity than a candid low one. A line rated as primary measured data that turns out to rest on a supplier’s estimate is a misstatement of the basis of preparation, and it undermines the assurer’s ability to rely on any other rating in the file. A line honestly rated as a spend-based proxy simply directs testing elsewhere.
They accept a rating scheme that is defined once, applied consistently, and mapped to the four paragraph B40 characteristics rather than to an invented scale. They reject ratings applied at scope level rather than line level, ratings carried forward from a prior year without re-testing, and any file where the rating column exists but no line has ever been rated below the top tier, which is a tell that the column was populated rather than assessed.
Where quality is low and the line is material, the follow-up is the improvement plan: what data will be obtained next year, from whom, and by when. That is not a compliance requirement. It is what turns a quality assessment into something the assurer can rely on next period.
Commonly confused with
Data accuracy. The hierarchy ranks the strength of the evidence behind a figure, not how close the figure is to the truth. A well-evidenced figure can still be wrong, and a crude estimate can be close. Also confused with the assurance evidence hierarchy applied by the practitioner to their own evidence, which is a different ranking applied by a different party for a different purpose.
Sources
1
2
Corporate Value Chain (Scope 3) Accounting and Reporting Standard, full text
GHG Protocol
3
ASSA 5000 General Requirements for Sustainability Assurance Engagements
AUASB
Review status
Review required
Last reviewed
15 September 2026
Editorial pass, unsigned
Reviewer required
Carbon accounting specialist
Next scheduled review
1 July 2027
Part of
Cluster D, Emissions accounting and measurement
49 terms from the head term carbon accounting down to individual Scope 3 categories and the mechanics of factors, boundaries and data quality. The largest cluster in the glossary.
Related terms
The second of the four characteristics, and the one with the most leverage
What the lower ratings in the scheme actually describe
The method choice the quality trade-off usually resolves to
Related questions
Can we estimate Scope 3 and still pass assurance?
−
Yes. Estimates are expected in Scope 3 and are not a problem for assurance in themselves, because what fails is an undocumented estimate. The practitioner tests whether the method is appropriate and disclosed, the inputs are traceable, the application is consistent, and the estimation uncertainty is described honestly.
What is the difference between spend-based and activity-based, and which does the auditor prefer?
+
Activity-based uses physical quantities such as litres or kilowatt hours, while spend-based applies a factor to dollars spent. Activity-based is more accurate and easier to evidence. An assurance practitioner has no preference in principle: they test whether the method you chose is appropriate, disclosed, and applied consistently.
What evidence do we need for each emissions number?
+
Every reported number needs a source document you did not create for the report, the activity data drawn from it, the emission factor and its published edition, and the calculation joining them. Fleet fuel needs litres from fuel card statements, electricity needs kWh by site from retailer invoices with the matching state factor, and refrigerants need kilograms by gas type from service records.
Where this sits commercially
Carbonhalo rates quality line by line against the four paragraph B40 characteristics, not against a software scale the standard does not contain.
Other terms in this cluster
Data quality hierarchy