The greenhouse gas protocol initiative

The Greenhouse Gas (GHG) Protocol Corporate Standard is an internationally recognised framework for accounting and reporting GHG emissions. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it covers six Kyoto Protocol gases and supports businesses in managing GHG risks, participating in trading schemes, and meeting regulatory and voluntary requirements.

GHG accounting and reporting principles

The Standard is underpinned by five principles: relevance, completeness, consistency, transparency, and accuracy. These ensure that reported data fairly represents emissions and supports informed decision-making.

Business goals and inventory design

GHG inventories help companies manage emissions, identify risks and opportunities, and meet internal and external objectives. Tata Steel and Ford Motor Company demonstrate the importance of designing inventories aligned with strategic goals, including accurate tracking and credible reporting systems.

Setting organisational boundaries

Companies must choose between the equity share or control (operational or financial) approaches to consolidate emissions. Only one method is required, reflecting flexibility in reporting and business relevance. The minimum equity threshold has been removed to allow reporting when emissions are significant.

Setting operational boundaries

Emissions are categorised into three scopes:

• Scope 1: Direct emissions

• Scope 2: Indirect emissions from purchased electricity (excluding resale)

• Scope 3: Other indirect emissions (e.g., from leased assets, transport)
  New guidance addresses double counting, transmission and distribution losses, and leased operations.

Tracking emissions over time

A base year must be established for comparison. Adjustments are required for structural or methodological changes. The previous recommendation for pro-rata adjustments was removed to avoid redundancy.

Identifying and calculating GHG emissions

Emission sources are identified and quantified using activity data and emission factors. Improved guidance supports the selection of appropriate factors. Calculation tools are available, aligned with IPCC methods and tailored to sectoral needs.

Managing inventory quality

Inventory quality is achieved through quality management systems and uncertainty assessments. Expanded guidance covers uncertainty sources, mitigation strategies, and institutional arrangements for maintaining high-quality data.

Accounting for GHG reductions

Companies can account for project-based reductions and offsets. For example, Alcoa reduced over 6.3 million kg of CO₂ annually by purchasing renewable energy certificates (RECs). New guidance clarifies the relationship between project and corporate-level reductions.

Reporting GHG emissions

Reports must be relevant, complete, consistent, transparent, and accurate. At minimum, scope 1 and 2 emissions must be disclosed, along with inventory boundaries and methods. Optional reporting includes offsets, scope 3 emissions, and performance indicators.

Verification of GHG emissions

Verification enhances data credibility. It includes assessment of methodologies and identification of discrepancies. Site visits, verifier competence, and verification timing are essential considerations. PwC noted improved verifiability of non-CO₂ emissions and electricity data using this standard.

Setting GHG targets

Guidance is provided on defining base years, setting boundaries, and tracking progress. Targets must consider emissions scopes, activities, and geographical coverage. Companies should address potential double counting and report progress against targets using consistent methods.