The Greenhouse Gas Protocol establishes comprehensive global standardised frameworks to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains and mitigation actions.

GHG Protocol supplies the world's most widely used greenhouse gas accounting standards. The Corporate Accounting and Reporting Standard provides the accounting platform for virtually every corporate GHG reporting program in the world.

After a company has determined its organizational boundaries in terms of the operations that it owns or controls, it then sets its operational boundaries. This involves identifying emissions associated with its operations, categorizing them as direct and indirect emissions, and choosing the scope of accounting and reporting for indirect emissions.

To help delineate direct and indirect emission sources, improve transparency, and provide utility for different types of organizations and different types of climate policies and business goals, three “scopes” (scope 1, scope 2, and scope 3) are defined for GHG accounting and reporting purposes. Companies shall separately account for and report on scopes 1 and 2 at a minimum.

Scope 1: Direct GHG emissions

Direct GHG emissions occur from sources that are owned or controlled by the company, for example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical production in owned or controlled process equipment. Direct CO2 emissions from the combustion of biomass shall not be included in scope 1 but reported separately. GHG emissions not covered by the Kyoto Protocol, e.g. CFCs, NOx, etc. shall not be included in scope 1 but may be reported separately.

Scope 2: Electricity indirect GHG emissions

Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organizational boundary of the company. Scope 2 emissions physically occur at the facility where electricity is generated.

Scope 3: Other indirect GHG emissions

Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. Scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by the company. Some examples of scope 3 activities are extraction and production of purchased materials; transportation of purchased fuels; and use of sold products and services.

Guidance

The first step in tracking emissions is the selection of a base year. Companies may need to track emissions over time in response to a variety of business goals, including:

• Public reporting

• Establishing GHG targets

• Managing risks and opportunities

• Addressing the needs of investors and other stakeholders

Once the inventory boundary has been established, companies generally calculate GHG emissions using the following steps:

1. Identify GHG emissions sources

2. Select a GHG emissions calculation approach

3. Collect activity data and choose emission factors

4. Apply calculation tools

5. Roll-up GHG emissions data to corporate level.

 

The calculation tools are available on the GHG Protocol Initiative website at: www.ghgprotocol.org.

Detailed information can be found at: https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf

 

Further information

For companies wishing to quantify and report their corporate value chain (scope 3) GHG emissions, a standardized methodology outlined in GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) is to be used in conjunction with the Corporate Standard.

An additional Technical Guidance for Calculating Scope 3 Emissions acts as a supplement to Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) can be found here.

GHG Protocol Scope 2 Guidance: an amendment to the GHG Protocol Corporate Standard - This guidance acts as an amendment to the Corporate Standard, providing updated requirements and best practices on scope 2 accounting and reporting.