GHG Protocol: Definition, Standards and More

The World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI) created the original edition of the Corporate Accounting and Reporting Standard (“the Corporate Standard”) in 2001. This kicked off the development of many more GHG Protocol reporting frameworks that went on to deliver much-needed emissions accounting recommendations for organizations.

The GHG Protocol’s frameworks provide guidance for organizations to measure, manage and reduce their GHG emissions throughout their value chain. Following the GHGP brings entities one step closer to aligning with the Paris Climate Agreement’s goals.

Today, the GHGP is the most widely used standard for measuring GHGs. Many other entities, like the Partnership for Carbon Accounting Financials (PCAF), have created frameworks aligned with the GHGP for more comparable reporting across the board.

In our guide, we’ll cover what the GHG Protocol is used for, who uses it, the standards covered by the GHGP and why organizations should begin developing their GHG inventories. You can always defer to the GHG Protocol’s website for more information.

What Is the GHG Protocol Used For?

The GHG Protocol was established to standardize GHG reporting frameworks and to help organizations identify areas with the highest emissions. The GHGP provides many standards and protocols to help organizations and governments create their GHG inventories. After that information is collected, reporting entities can use it to set reduction targets and inform their decarbonization strategies.

Since many organizations and governments have adopted the GHG Protocol, entities can potentially use it to fulfill multiple disclosure requirements and requests. For example, U.K.-based organizations can use it to answer disclosure requests from the Carbon Disclosure Project (CDP) and to comply with national reporting requirements.

This is just one example of how standardization benefits all parties involved. With a globally accepted standard, organizations can save the time and effort needed for learning about different frameworks and putting together multiple reports.

Using the GHG Protocol can also help reporting organizations overall with getting ahead of GHG reporting mandates, meeting stakeholder and consumer demand and taking the first steps to lowering their carbon footprint.

What Are Scopes 1, 2 and 3 Under the GHG Protocol?

Scope 1 covers emissions directly generated by reporting organizations, scope 2 emissions come from purchased electricity, heat, steam, and cooling, and scope 3 covers all other indirect emissions from an organization’s value chain.

The GHG Protocol defined scope 1, scope 2 and scope 3 to categorize different types of activities that generate GHG emissions. Identifying emissions under each scope helps organizations understand where they’re generating emissions and their total impact.

Scope 1 and 2 Emissions

Scope 1 and 2 emissions are usually simpler to measure compared to scope 3. Scope 1 covers emissions that organizations directly control. As a result, organizations typically have greater transparency and access to track down emissions sources and their related data. For scope 2 emissions, organizations can use contractual instruments with their energy companies and market data to measure that category.

Scope 3 Emissions

Scope 3 emissions can be especially difficult to measure since all other emissions fall under this category and the data can be difficult to get. Organizations need to work with all suppliers, businesses and other organizations throughout their value chain to get the most accurate data possible.

Scope 4 or “Avoided Emissions”

While scopes 1 through 3 look at emissions generated as a result of their goods and services, scope 4 looks at emissions an organization avoids. The GHG Protocol states that many reports of avoided emissions are not accurate and not auditable.

While scope 4 isn’t an official “scope” from the GHG Protocol, WRI provides guidance for estimating and reporting avoided emissions. They also recommend that organizations should first measure their scope 1, 2 and 3 emissions before putting their effort toward measuring avoided emissions.

What Types of Entities Use the GHG Protocol?

Companies, organizations, countries and cities all use the GHG Protocol. Companies and organizations have tools and standards tailored to their reporting needs, while countries and cities also have frameworks more suited for their goals.

Companies and Organizations

Companies and organizations focus primarily on accounting for their own emissions along with those in their value chain. Resources like the Potential Emissions from Fossil Fuel Reserves guidance and Agricultural Guidance are most relevant for companies and organizations. These and other resources are normally created in collaboration with professionals and organizations in those respective industries.

Countries and Cities

Countries and cities focus more broadly on creating targets and mitigation strategies, implementing ways to measure and manage their progress, and seeing how GHG emissions impact their actions and regulations for their jurisdictions. The Public Sector Protocol is one example of guidance that helps the U.S. at the local, state and federal levels.

Many cities committed to the Compact of Mayors are using the GHG Protocol for Cities. A handful of countries also partner with the GHGP to create national GHG Protocol-based programs tailored to their jurisdictions.

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What Are the Standards and Protocols Within the GHGP?

The GHG Protocol includes the Corporate Accounting and Reporting Standard, GHG Protocol for Cities, Project Protocol, Mitigation Goal Standard, Policy and Action Standard, Corporate Value Chain (Scope 3) Standard and the Product Standard.

The GHGP and other organizations developed these standards to give technical guidance for different use cases. The WRI and WBCSD conducted extensive consultation and road tests with businesses, governments and many other organizations to ensure that these standards met different reporting needs.

All of these standards and protocols are designed to be program- or policy-neutral, meaning that they’re generic and aren’t partial to any existing policy.

Below is a summary of each standard and protocol under the GHG Protocol.

Corporate Accounting and Reporting Standard

The GHGP released the latest edition of the Corporate Accounting and Reporting Standard in 2004.

The Corporate Standard is the primary guidance for businesses and other organizations preparing to disclose their GHG emissions. Specifically, it focuses on accounting and reporting on the following greenhouse gasses — sulphur hexafluoride (SF6), methane (CH4), carbon dioxide (CO2), nitrous oxide (N2O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), and nitrogen trifluoride (NF3).

Many entities use the Corporate Standard as the basis for their own GHG emissions requirements or as the guiding framework for their programs.

Objectives for this standard:

• Improve transparency and cohesion for GHG inventories between reporting organizations and other frameworks
• Provide businesses with the information needed to build an effective GHG emissions management and reduction plan
• Help businesses prepare an accurate and unbiased GHG inventory by using a standardized methodology
• Bring down costs for creating GHG inventories by providing standardized requirements

Created through:

• Guidance from 350 experts in different businesses and organizations
• Road testing with 30 companies across nine countries
• Learnings from the first edition released in 2001

Used by:

• Businesses
• Other entities that create emissions (like universities or nonprofits)

Should not be used for:

• Quantifying reductions for GHG mitigation projects, since this guidance is found in the Project Protocol
• The verification process, since this standard does not provide guidance for verification

Project Protocol

The Project Protocol provides accounting guidance for disclosing and measuring GHG reductions from GHG mitigation projects. These projects are typically used for carbon offsetting.

Objectives for this standard:

• Provide a platform to standardize projects of different GHG initiatives and programs
• Give clear and trustworthy guidance for measuring and reporting GHG reductions from GHG mitigation projects
• Improve the reliability of GHG project accounting by applying trusted accounting principles

Used by:

• Project developers
• Administrators, designers and others who work on programs or other projects that incorporate GHG projects
• Third-party verifiers for GHG projects

Created through:

• Reviews by more than 100 experts
• Road testing by 20 GHG project developers across 10 countries

Should not be used for:

• Quantifying GHG reductions for corporations or organizations, since the Corporate Standard provides this guidance

This protocol also has the following supplemental guidance:

• Land Use, Land-Use Change, and Forestry (LULUCF) Guidance for GHG Project Accounting for specific guidance for reporting on LULUCF projects
• Guidelines for Grid-Connected Electricity Projects for specific guidance measuring GHG reductions by projects that avoid or displace power from electricity grids

GHG Protocol for Cities

The GHG Protocol for Cities provides guidance for cities to measure and manage emissions, create ambitious and realistic targets, and standards and tools to ensure complete and accurate data and disclosure.

The GHGP says that cities generate 75% of energy-related CO2 emissions around the world. Using this standard for measurement is the first step cities can take to reduce their carbon footprint.

Objectives for this standard:

• Highlight the importance of cities doing their part in mitigating climate change by collecting and benchmarking data
• Assist cities with setting their base year emissions inventory, tracking progress and setting emissions reduction goals
• Ensure trustworthy and comparable disclosure and measurements of GHG emissions between cities by following globally accepted principles
• Help cities with creating a complete GHG inventory to inform their climate-related plans
  Enable aggregation of city GHG emissions inventories at national and subnational levels

Used by:

• Anyone evaluating GHG emissions in a “geographically defined, subnational area”
• Policymakers at regional or higher levels

This standard does not explicitly define a “city,” so this standard can be used for any subnational area (like a town or county).

Created through:

• Testing in 35 cities around the world
• Collaboration between the WRI, Local Governments for Sustainability (ICLEI), the Cities Climate Leadership Group (C40), UNEP, Joint Work Programme of the Cities Alliance, World Bank and UN-Habitat

Should not be used for:

• Removals accounting in agriculture, forestry and other land use, since this will be covered in future guidance

Mitigation Goal Standard

The Mitigation Goal Standard helps governments create national or subnational emissions reduction targets. It also provides standardized guidelines for measuring and disclosing advancements governments make toward those targets. The GHGP created this standard at the same time as the Policy and Action Standard to ensure they complement each other.

Objectives for this standard:

• Assist governments with meeting global reporting requirements, when applicable
• Help national and subnational governments create and execute mitigation targets that significantly contribute to global GHG reduction
• Encourage clear and reliable mitigation goal design, reporting and updates on progress toward those goals based on the needs of reporting entities
• Develop global transparency and consistency by creating mitigation targets and evaluating advancement toward them
• Help decision-makers and policymakers create effective reduction and management targets for GHG emissions that align with their overall climate and sustainability goals
• Assist reporting entities with clearly, comprehensively and accurately evaluating and disclosing progress toward mitigating goals

Used by:

• National and subnational governments that take part in creating and measuring reduction targets
• Companies, organizations, research institutions and non-governmental organizations (NGOs)

Created through:

• 270 participants across 40 countries when developing this and the Policy and Action Standard
• Pilot tests in the U.S., U.K., Chile, South Africa and India

Should use caution when:

• Comparing disclosures, since differences in methods and data sources can result in differing reports between similar reporting entities

Policy and Action Standard

The Policy and Action Standard gives reporters a standardized framework to measure how policies and actions influence GHG emissions. Reporters can then understand how to make better policy decisions for better results.

Objectives for this standard:

• Produce a trustworthy and consistent method in estimating GHG effects on policies and actions
• Encourage clear and trustworthy public reporting of policy effectiveness and the effects of emissions
• Assist reporters with comprehensively, transparently and accurately evaluating GHG effects of policies and actions
• Help policymakers and decision-makers create better GHG emissions reduction and management plans by understanding the GHG effects of policies and actions

Used by:

• Policymakers and analysts who evaluate policies and actions at any level of government
• Non-governmental organizations
• Financial institutions and donor agencies
• Research institutions
• Businesses

Created through:

• 270 participants across 40 countries when developing this and the Mitigation Goal Standard
• Pilot tests on 27 policies and actions in 20 cities and countries

Should not be used for:

• Calculation methodologies, tools or data sources since this standard only provides a general process
• Individual mitigation projects since the Project Protocol is best suited for those

Should be used with caution when:

• Comparing results, since differences can arise as a result of varying methodologies
• Aggregating results, since data may not be comparable and/or multiple reports related to similar emissions sinks or sources can result in overestimated or underestimated calculations
• Crediting GHG reductions for selling in the carbon market (like carbon offsets), since the results calculated with this standard alone aren’t enough to support these types of credits

Corporate Value Chain (Scope 3) Standard

The Corporate Value Chain (Scope 3) Standard gives guidance for evaluating the indirect emissions along an organization’s value chain. As a result, this standard also helps organizations prioritize their emissions reduction efforts.

Measuring scope 3 emissions is crucial since they most often make up the most emissions for an organization. This standard even encourages reporting organizations to work with customers and businesses within their value chain to reduce their overall emissions.

This standard is the foundation for measuring this scope since it is applicable to all industries. Some sectors have created supplemental guidance to help with needs in different industries. For example, PCAF’s framework for calculating financed emissions gives additional guidance for scope 3, category 15 emissions.

Objectives for this standard:

• Encourage trustworthy and clear public reporting for value chain emissions as a result of consistent requirements
• Help companies create transparent, accurate and cost-efficient scope 3 inventories with a standardized framework
• Provide guidance for creating scope 3 management and reduction plans by understanding the effects of their value chain emissions

Used by:

• Businesses of all sizes and industries
• All other types of public and private organizations
• Policymakers and others who are creating GHG reduction or disclosure programs

Created through:

• 96 members in technical working groups to draft the standard
• Road testing in 2010 by 34 companies
• 2,300 total participants from 55 countries who helped contribute

Should not be used for:

• Quantifying avoided emissions or reductions as a result of offsetting, since the Project Protocol covers this
• Comparing scope 3 emissions between organizations, since disclosures may differ as a result of varying methodologies, organization size or organizational structure

Product Standard

The Product Standard provides guidance for reporting and accounting for emissions for the entire life cycle of a product. This includes everything from transporting the product to disposing of the product.

Implementing this standard can help businesses take steps toward creating sustainable products. This both benefits the environment and satisfies increasing customer demand for transparency and improved sustainability. This standard applies internationally to all industries.

Objective for this standard:

• Give businesses and organizations guidance to make informed choices about the products involved with their business, ranging from products they design to products they use

Used by:

• Organizations and companies of all sizes and sectors
• Policymakers

Created through:

• 2,300 total participants across 55 countries
• 112 participants in technical working groups who drafted the standard
• Road testing by 38 companies in 2010

Should not be used for:

• Calculating avoided emissions and quantifying GHG reductions from offsets, since this standard is mainly designed for emissions and removals during a product’s life cycle

What Is GHGP’s Review Service?

The GHG Protocol’s review service grants their Built on GHG Protocol mark to accounting resources that align with the GHGP’s standards. Some sectors require guidance and tools that the GHG Protocol’s Standards don’t provide. To accomplish this, organizations in those industries come together to create these resources. Resources include both tools and guidance.

The following are guidance built on the GHG Protocol:

• GHG Reporting Guidance for the Aerospace Industry to help organizations in the aerospace industry measure their GHG emissions
• ENCORD Construction CO2e Measurement Protocol to help organizations in the construction industry measure their GHG emissions
• Product Category Rules (PCR) for Concrete to provide guidance for calculating environmental impacts resulting from concrete production in North America
• Waste Sector Protocol to help organizations in the waste sector measure GHG emissions
• ICT Sector Guidance to help measure GHG emissions for information and communication technology (ICT) products and services
• Clean Energy Emission Reduction Protocol to help reporting organizations quantify GHG emissions reductions
• Global Logistics Emissions Council (GLEC) Framework to help logistics service providers, carriers and shippers measure GHG emissions from their logistics operations
• Scope 1 & 2 GHG Inventory Guidance for U.S. Dairy Cooperatives and Processors to help U.S. dairy cooperatives that make dairy products and dairy processors measure their scope 1 and 2 GHG emissions
• Scope 3 GHG Inventory Guidance for U.S. Dairy Cooperatives and Processors to help U.S. dairy cooperatives that make dairy products and dairy processors measure their scope 3 GHG emissions
• Global GHG Accounting and Reporting Standard for the Financial Industry to help financial institutions calculate their financed emissions
• Greenhouse Gas Accounting Sector Guidance for Pharmaceutical Products and Medical Devices to provide guidance for measuring GHG emissions from medical devices and pharmaceutical products

The following are tools built on the GHG Protocol:

• Carbon Reporting Tool for Chinese SME Companies is a tool for Chinese small and mid-size enterprises (SMEs) to collect data for calculating, managing and disclosing their business’s carbon footprint
• Corporate Greenhouse Gas Calculator is a tool for the U.S., Africa and Middle East region to use local emission factors when reviewing, quantifying, disclosing and monitoring GHG emissions
• City Inventory Reporting and Information System (CIRIS) is an Excel-based tool for reporting and managing city GHG emissions data for all sectors
• Envizi Sustainability and Data Management Reporting Module is a cloud-based platform that can calculate scope 1, 2 and 3 emissions, manage hundreds of data types and can be used by multiple stakeholders
• GreenIntelli’s tools help organizations report on their GHG emissions, manage energy spend and calculate their carbon footprint
• K-eCO Local Government Inventory Calculation Program is a tool that helps local South Korean governments measure community-level GHG emissions and report to both the Carbon Climate Registry and C40
• SmartWay Truck Carrier Tool is a tool that can help companies benchmark, calculate and disclose emissions to improve their freight’s efficiency and environmental performance

Is GHG Reporting Mandatory?

GHG reporting is mandatory in more than 40 jurisdictions, with many more looking to implement their own requirements. For example, South Korea has its own set of GHG Reduction Policies. In the U.S., the Environmental Protection Agency (EPA) requires GHG reporting from more than 8,000 large GHG emission sources through the Greenhouse Gas Reporting Program (GHGRP).

Rather than waiting for mandates, organizations should get ahead of requirements and start developing their inventory now. Early adoption gives organizations more time to familiarize themselves with frameworks, ask questions and take their time with data collection. It’s also an opportunity to earn early recognition by working toward decarbonization without a mandate.

How Do Other Standards, Initiatives and Organizations Use the GHGP?

The GHG Protocol is the foundation for many other standards and initiatives. These existing frameworks align with the GHGP to ensure organizations report comparable information with the highest-quality data.

Below are just a few examples of organizations that use the GHG Protocol:

• The Global Reporting Initiative (GRI)’s GRI 305 bases its requirements on the Corporate Standard and the Corporate Value Chain (Scope 3) Standard.
• The CDP recommends reporting organizations use the GHGP when responding to disclosure requests. For example, CDP’s Climate Change Reporting Guidance refers to requirements like using a single base year for scope 1, 2 and 3 emissions.
• The EPA’s Center for Corporate Climate Leadership’s guidance aligns with the GHGP. They’ve also created complementary resources to help organizations with their disclosures.
• The International Standards Organization (ISO) made ISO 14064 complementary to the GHG Protocol’s Corporate Standard.
• The Science Based Targets initiative (SBTi)’s criteria require companies to follow the GHGP’s Corporate Standard, Scope 2 Guidance and their Corporate Value Chain (Scope 3) Standard.

What Resources Does the GHGP Provide To Help Organizations With Reporting?

The GHGP provides tools, guidance and courses to help reporters use the GHGP’s accounting standards. These resources can be a great place to start if you’re still getting familiar with the GHG Protocol.

Tools

GHGP offers cross-sector, country-specific and sector-specific tools, as well as tools for countries and cities. For example, the GHG Emissions from Transport or Mobile Sources worksheet provides guidance for calculating CO2, CH4 and N2O emissions from a variety of transportation and machinery.

Industry experts helped create and test the GHGP’s library of tools to reflect best practices for each. However, it’s not mandatory to use their tools for calculation.

Courses and Webinars

They also offer a range of courses and webinars to help reporters understand their different standards. Many courses were previously provided in person by WRI representatives. Today, reporters can find courses online that provide the same informative teachings.

Select courses have prerequisites. For example, to take the Scope 2 Guidance Training Webinar, participants must be familiar with the Corporate Standard. Some courses are free while others can cost up to $300+. Some discounts are available for groups, NGO employees, government employees and university students.

Why Should Organizations Begin Developing Their GHG Inventories?

Organizations should start developing their GHG inventories now (if they haven’t already) to get ahead of mandates, prepare for disclosure requests and to both manage and mitigate their carbon footprint. Understanding your organization’s environmental impact is no longer an option — it’s a requirement for many reasons.

Stakeholders and customers today are more concerned about climate risk than ever before. Many governments are also committed to reducing their jurisdiction’s carbon footprint. In addition to legal mandates a

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