GHG Protocol

The Greenhouse Gas Protocol provides the world's most widely used standards for measuring and managing greenhouse gas emissions. Developed by WRI and WBCSD, the GHG Protocol establishes comprehensive frameworks for corporate and product-level emissions accounting.

Framework Overview

Corporate Standard

The Corporate Accounting and Reporting Standard (2004, revised 2015) provides requirements and guidance for companies preparing a corporate-level GHG emissions inventory. It covers three scopes:

Scope 1: Direct Emissions — Emissions from sources owned or controlled by the company

• Stationary combustion (boilers, furnaces)
• Mobile combustion (company vehicles)
• Process emissions (chemical reactions, industrial processes)
• Fugitive emissions (refrigerants, natural gas leaks)

Scope 2: Indirect Emissions from Purchased Energy — Emissions from generation of purchased electricity, steam, heating, and cooling

• Location-based method (average grid emissions)
• Market-based method (contractual instruments like RECs)

Scope 3: Other Indirect Emissions — All other indirect emissions in the value chain (15 categories)

• Upstream: Purchased goods/services, capital goods, fuel/energy, transportation, waste, business travel, employee commuting, leased assets
• Downstream: Transportation, processing, use of sold products, end-of-life, leased assets, franchises, investments

Product Standard

The Product Life Cycle Accounting and Reporting Standard (2011) provides requirements for quantifying and publicly reporting a product carbon footprint across its life cycle.

Why GHG Protocol Matters

Universal Adoption

The GHG Protocol is used by 92% of Fortune 500 companies reporting emissions to CDP. It serves as the foundation for:

• IFRS S2 — Climate-related disclosures
• ESRS E1 — EU climate reporting
• CDP — Climate questionnaire
• SBTi — Science-based target setting
• ISO 14064 — International emissions standard

Scope 3 Imperative

For most companies, Scope 3 emissions represent 70-90% of total carbon footprint. The GHG Protocol's Scope 3 Standard (2011) provides the methodology for measuring value chain emissions, enabling companies to address their full climate impact.

Primary Source Documents

From ESG Library

• Climate Change Reporting Made Simple — GHG Protocol implementation with calculation examples

View all books →

Part of ESG Hub | Curated by Ascent Partners Foundation

Scope 1, 2, and 3 Explained

Scope 1: Direct Emissions
GHG emissions from sources owned or controlled by the company:

• Fuel combustion in company vehicles, boilers, furnaces
• Process emissions from manufacturing
• Fugitive emissions from refrigerants, leaks
• Company-owned facilities

Scope 2: Indirect Emissions from Purchased Energy
GHG emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the company:

• Purchased electricity
• Purchased steam, heat, cooling
• Two calculation methods: location-based (grid average) and market-based (contractual instruments like RECs)

Scope 3: Other Indirect Emissions
All other indirect emissions in the company's value chain (15 categories):

Upstream:

1. Purchased goods and services
2. Capital goods
3. Fuel and energy-related activities (not in Scope 1/2)
4. Upstream transportation and distribution
5. Waste generated in operations
6. Business travel
7. Employee commuting
8. Upstream leased assets

Downstream: 9. Downstream transportation and distribution 10. Processing of sold products 11. Use of sold products 12. End-of-life treatment of sold products 13. Downstream leased assets 14. Franchises 15. Investments

Calculation Methodologies

Activity Data × Emission Factor = GHG Emissions

Activity Data: Quantifiable measure of activity (e.g., liters of fuel, kWh of electricity, km traveled)

Emission Factor: CO₂e emissions per unit of activity (e.g., kg CO₂e per liter of diesel, kg CO₂e per kWh)

Emission Factor Sources:

• IPCC: Intergovernmental Panel on Climate Change default factors
• IEA: International Energy Agency electricity factors by country
• EPA: US Environmental Protection Agency factors
• DEFRA: UK Department for Environment factors
• Supplier-specific: Actual emissions data from suppliers

GHG Protocol Standards Suite

Corporate Standard (2004) — Scope 1 and 2 accounting and reporting
Scope 3 Standard (2011) — Value chain (Scope 3) accounting and reporting
Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) — Detailed Scope 3 guidance
Product Life Cycle Standard (2011) — Product-level carbon footprinting
Mitigation Goal Standard (2014) — Setting and tracking emissions reduction targets
Policy and Action Standard (2014) — Estimating GHG effects of policies and actions
Land Sector and Removals Guidance (2022) — Accounting for land-based emissions and removals

Key Principles

Relevance: Ensure inventory reflects GHG emissions profile and serves decision-making needs
Completeness: Account for all relevant emission sources and activities
Consistency: Use consistent methodologies to allow meaningful comparisons over time
Transparency: Document and disclose assumptions, methodologies, data sources
Accuracy: Reduce uncertainties and ensure emissions are neither over nor underestimated

Scope 3 Challenges

Data Availability: Upstream and downstream data often not readily available, requires supplier engagement and estimation
Calculation Complexity: 15 categories, multiple methodologies, significant estimation required
Double Counting: Risk of counting same emissions multiple times across value chain
Boundary Setting: Determining which categories are relevant and material
Assurance: Difficult to obtain third-party assurance for Scope 3 due to data quality