What is the Greenhouse Gas (GHG) Protocol?

The Greenhouse Gas Protocol (GHG Protocol) is a globally acknowledged standard for measuring and managing greenhouse gas emissions. The GHG Protocol was established in 1990 in response to demand for a consistent framework for greenhouse gas reporting. Today, the GHG Protocol collaborates with governments, industry associations, NGOs, corporations and other organisations to provide the world's most widely used emission calculation guidelines.

Nations and enterprises that have committed to the Paris Agreement are obligated to reduce their greenhouse gas emissions. To do so, they are required to track, disclose, and mitigate its emissions by adhering to established criteria like those outlined in the GHG Protocol. The GHG protocol has played a pivotal role in promoting decarbonisation across operations in the public and private sectors through providing a unified framework for emissions management. Organisations looking to source carbon accounting software must ensure they source a decarbonisation platform that aligns with the principles of the GHG Protocol.

Who does the GHG Protocol apply to?

The GHG Protocol applies to a number of entities, including: 

• Businesses: Both publicly traded and privately held companies of all sizes and across every industry are encouraged to use the GHG Protocol to measure and manage their emissions. In 2016, 92% of Fortune 500 companies responding to the CDP used GHG Protocol directly or indirectly through a program based on GHG Protocol. It provides the accounting platform for virtually every corporate GHG reporting program in the world. 

• Governments: Government entities - at the national, regional, and local levels, can use the GHG Protocol to track and report their emissions. This is key to assisting governments in setting policies and strategies to reduce emissions and thus reach universal climate targets

• NGOs: Non-governmental organisations (NGOs), non-profits, and other charitable institutions can also use the GHG Protocol to assess their emissions and promote sustainable practices.

• Cities and municipalities: Urban areas can utilise the GHG Protocol to measure and manage emissions from various sources within their boundaries, such as transportation, buildings, and waste management.

• Suppliers: In line with the hyper growing influence of sustainability and ESG regulations, many larger businesses and organisations require their suppliers and partners to report their emissions, extending the scope of the GHG Protocol throughout the supply chain.

• Investors: Investors and financial institutions may utilise the GHG Protocol to assess the environmental performance and risk exposure of the companies they invest in or provide loans to.

• Academic and research institutions: Universities and research organisations can use the GHG Protocol to study emissions trends, evaluate policy effectiveness, and contribute to the broader understanding of climate change issues.

• Consulting firms: Consulting firms specialising in environmental and sustainability services can use the GHG Protocol to provide clients with expertise in measuring and managing emissions.

• Industry associations: Trade associations and industry groups can adopt the GHG Protocol to establish standardised emission measurement practices within their respective sectors.

What are the different GHG Protocol standards?

The standards below are designed to provide a framework for businesses, governments, and other entities to measure and report their greenhouse gas emissions in ways that support their missions and goals.

1. Corporate Standard: The GHG Protocol Corporate Accounting and Reporting Standard provides requirements and guidance for companies and other organisations, such as NGOs, government agencies, and universities, that are preparing a corporate-level GHG emissions inventory. It covers emissions from direct and indirect sources, also known as scope 1, scope 2, and scope 3 emissions. TO guarantee accuracy, leading decarbonisation platform provider Plan A uses mainly the Corporate Standard and the Scope 3 Standard as a methodological basis for its Corporate Carbon Footprint (CCF) calculation tool.

2. GHG Protocol for Cities: The Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC) provides a robust framework to cities and communities for accounting and reporting city-wide greenhouse gas emissions. 

3. Mitigation Goal Standard: The GHG Protocol Mitigation Goal Standard provides guidance to countries and cities for designing national and subnational mitigation goals. The standard also provides guidance for the development of a standardised approach for assessing and reporting progress toward climate goals at all levels. 

4. Corporate Value Chain (Scope 3) Standard: The Corporate Value Chain (Scope 3) Standard enables companies and organisations to assess their entire value chain emissions impact and identify where to focus efforts aimed at reducing carbon emissions. 

5. Policy and Action Standard: The GHG Protocol Policy and Action Standard is best suited for countries and cities and provides a standardised approach for estimating the greenhouse gas effect of policies and actions.

6. Product Standard: The Product Standard can be used by companies and organisations to understand the full life cycle emissions of a product, enabling them to allocate their efforts towards the greatest GHG reduction opportunities. Utilising the Product Standard is often the first step companies take when transitioning to more sustainable products.

7. Project Protocol: The GHG Protocol for Project Accounting is the most comprehensive, policy-neutral accounting tool used by a number of stakeholders of climate change for quantifying the greenhouse gas benefits of climate change mitigation projects.

What are scopes 1, 2 and 3 in the Greenhouse Gas Protocol?

To calculate a company’s emissions the GHG Protocol takes into account six greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PCFs), and sulphur hexafluoride (SF6). The GHG Protocol corporate standard then classifies the emissions into three scopes - scope 1, 2 & 3. Scope 1 and 2 are mandatory to report, whereas Scope 3 is voluntary and the hardest to monitor. However, companies succeeding in reporting all three scopes will gain a sustainable competitive advantage and ensure they align with forthcoming regulations such as the Corporate Sustainability Reporting Directive (CSRD). 

Scope 1: Scope 1 emissions are direct emissions from controlled and company-owned resources. In other words, they are emissions released into the atmosphere directly resulting from a set of activities. Examples of Scope 1 emissions are on-site combustion, organisation-owned fossil-fuel power plants, or the emissions from company fleets.

Scope 2: Scope 2 emissions are indirect emissions from the generation of purchased energy from a utility provider. They include all GHG emissions released into the atmosphere from the consumption of purchased electricity, steam, cooling and heat.

Scope 3: Also known as value chain emissions, Scope 3 emissions are all indirect emissions that occur in the reporting company's upstream and downstream supply chain. As defined by the GHG Protocol, Scope 3 emissions are separated into 15 different categories, including business travel, waste disposal, and purchased goods and services.

Read here to learn more about scopes 1, 2 and 3 of carbon emissions.

How to comply with the GHG Protocol

GHG accounting and reporting practices are constantly evolving and are often new to many businesses. As such, it is critical that businesses utilise the financial accounting and reporting principles listed below as a guide to ensure a faithful, true and fair account of the company's emissions.

• Relevance: Organisations must ensure that the GHG inventory accounting methodologies and report serves the decision-making needs of the intended users - both internal and external to the company. Furthermore, information in the report should be presented in a way that is readily understandable by the intended users. 

• Completeness: Businesses must account for and report on all GHG emission sources and activities within the specified boundaries. Furthermore, organisations must disclose and justify any significant GHG emissions and removals that have been excluded.

• Consistency: To ensure compliance with the GHG Protocol, organisations must choose consistent methodologies, data, and assumptions that allow for meaningful comparisons of a GHG inventory over time. Furthermore, organisations should document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.

• Transparency: Based on a clear audit trail, organisations should address all relevant issues in a factual and coherent manner. To ensure further transparency, organisations must disclose any relevant assumptions and make appropriate references to the data sources, and the accounting and calculation methodologies used.

• Accuracy: To guarantee accuracy, organisations must take a systematic approach to ensure that the quantification of GHG emissions is neither under nor over actual emissions. Subsequently, they must take measures to ensure that uncertainties are reduced as much as possible. Finally, organisations must warrant sufficient accuracy to enable stakeholders to make decisions with reasonable assurance as to the integrity of the reported information.

Are there other standards for carbon accounting?

Besides the GHG Protocol, there are a number of other standards that are used for carbon accounting and reporting. These protocols are designed to help organisations measure, manage, and report their greenhouse gas emissions and other sustainability-related data. A few of the notable protocols include:

• ISO 14064: ISO 14064 is a series of international standards developed by the International Organisation for Standardisation (ISO) that provides guidelines for organisations to quantify and report their greenhouse gas emissions and removals. 

• Carbon Disclosure Project (CDP): CDP is a global platform that encourages companies, cities, states, and regions to disclose their environmental impact, including greenhouse gas emissions, water usage, and deforestation risks. CDP provides a standardised questionnaire for organisations to report their environmental data to investors and other stakeholders.

• Sustainability Accounting Standards Board (SASB): SASB provides industry-specific standards for reporting on financially material sustainability topics, including carbon emissions, in annual financial filings. These standards help companies in various industries disclose their environmental performance to investors.

• Task Force on Climate-related Financial Disclosures (TCFD): The TCFD, established by the Financial Stability Board, provides recommendations for organisations to disclose climate-related financial risks and opportunities. It focuses on how climate change might impact an organisation's financial performance over the short, medium, and long term.

• Science-Based Targets Initiative (SBTi): SBTi provides guidelines for setting science-based targets to reduce greenhouse gas emissions in line with the level of decarbonisation required to limit global warming to well below 2°C above pre-industrial levels. These targets are aligned with the latest climate science.

• Global Reporting Initiative (GRI) Standards: The GRI provides a comprehensive framework for reporting on a wide range of sustainability topics, including carbon emissions. GRI standards offer guidelines for organisations to report their environmental, social, and governance (ESG) performance.

Companies may not choose between these standards for a single function, as the list above hosts a range of different functions. This means a company may use many of these standards in conjunction. The choice of which protocol to use depends on an organisation's goals, reporting requirements, and stakeholder expectations. Accordingly, it is important that organisations consider their context and specific sustainability needs. 

What is the difference between ISO 14064 and GHG Protocol?

The two most widely used standards for measuring and reporting your greenhouse gas (GHG) emissions are the GHG Protocol and the ISO 14064. While the GHG Protocol acts as a guide and a set of tools developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) to help organisations and governments account for and manage their GHG emissions, the ISO 14064 similarly provides a series of international standards developed by the International Organisation for Standardisation (ISO) to help organisations quantify, monitor, report, and verify their GHG emissions and removals.

Scopes - GHG Protocol vs ISO 14064

‍The GHG Protocol covers three scopes of emissions: scope 1 (direct emissions from owned or controlled sources), scope 2 (indirect emissions from the generation of purchased energy), and scope 3 (all other indirect emissions that occur in the value chain). The GHG Protocol also provides sector-specific guidance, calculation methods, and reporting frameworks for different types of organisations and activities. Meanwhile, the ISO 14064 consists of three parts. Part one specifies guidance at the organisation level, part 2 specifies guidance at the project level, and part 3 specifies guidance for validation and verification. The ISO 14064 is compatible with other ISO standards, and may be used to support GHG emission reduction projects and programs.

Similarities - GHG Protocol vs ISO 14064

‍Both the GHG Protocol and the ISO 14064 are based on the same principles of relevance, completeness, consistency, transparency, and accuracy, and follow the same steps of planning, identifying, calculating, reporting, and verifying GHG emissions and removals. Additionally, both the GHG Protocol and ISO 14064 standards allow flexibility and adaptation to the specific context and objectives of each organisation or project, and encourage stakeholder engagement and  continuous improvement. 

Differences - GHG Protocol vs ISO 14064

‍One of the key differences between the GHG Protocol and the ISO 14064 is their scope and applicability. The GHG Protocol is far more detailed and comprehensive - covering a wider range of industries, sources, and activities, and providing more guidance and tools for greenhouse gas accounting and management. The ISO 14064 is more generic, focusing on the specifications for GHG quantification, monitoring, reporting, and verification - leaving more room for interpretation and customisation. Another difference is the extent to which each standard is recognised and accepted. The GHG Protocol is far more widely used and referenced by voluntary and mandatory reporting programs, initiatives, and platforms, such as the Science Based Targets initiative (SBTi), Carbon Disclosure Project (CDP), and the Global Reporting Initiative (GRI).

Which standard should you choose? GHG Protocol vs ISO 14064

‍Organisations must  consider a range of factors such as purpose, scope, audience, resources, and preferences when determining which standard to follow for GHG accounting and management. The GHG Protocol is a comprehensive and detailed standard that covers all aspects of GHG accounting and management, and is aligned with most voluntary and mandatory reporting programs, whilst the ISO 14064 is a more generic standard. Consequently, it is strongly recommended that businesses prioritise a carbon accounting platform aligned with the GHG Protocol. However, both standards can be used in a compatible and complementary manner. Whilst the GHG Protocol provides guidance on reporting and verification, a company may use the GHG Protocol to identify and calculate their GHG emissions and removals, and then use the ISO 14064 to report and verify them.

Read more about how to choose the best carbon accounting method here.

How can technology help with the GHG Protocol?

Leveraging the power of technology is critical to ensuring compliance with the GHG Protocol. Carbon accounting platforms that are aligned with the GHG Protocol ensure businesses can accurately compare emissions across all scopes and facilities, obtain benchmarks for their industry, and identify emissions hotspots they can immediately take action against. Ultimately, businesses that use scientifically-backed and GHG Protocol compliant carbon accounting technology will ensure they are able to comply with regulations, manage climate risk and reduce carbon costs.

Read more about the fundamental role of technology in carbon accounting here. 

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Ultimately, whether you are a CEO for a company, leader of a city, or in-charge of a government department, ensuring alignment with the GHG protocol via the utilisation of carbon accounting technology is vital to driving emission reduction efforts. Plan A is a leading green-tech pioneer that hosts a data-driven SaaS platform that combines cutting-edge technologies and the latest scientific standards and methodologies into an end-to-end software solution. Plan A’s expert technology automates CO2 emissions calculation, carbon reduction planning and  ESG reporting; empowering businesses to manage their entire net-zero journey in one platform.

Book a demo today to kickstart your decarbonisation journey.