GHG-P fact sheet

Greenhouse Gas Protocol

Type: International standard

Date: 1998

Implementation: 2001

Author: WRI and WBCSD

Target: Organisations

Created in 1998 by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (170 companies), with the support of NGOs and governments, the GHG Protocol works with many actors to build standards for greenhouse gas (GHG) accounting and reporting and to promote their large-scale adoption.

The first GHG Protocol standard was published in 2001, and since then, the method has been used worldwide, notably for climate reporting, for example to the CDP.

The latest version in force dates from 2015, with a new revision planned for 2024.

What are the objectives of the approach?

The GHG Protocol includes several distinct but linked standards

• The GHG Protocol Corporate Accounting and Reporting Standard: which helps companies to quantify and report their GHG emissions

• The GHG Protocol Corporate Value Chain (scope 3) Standard: which enables companies to assess the impact of their emissions across the entire value chain and to determine the areas on which they should focus their reduction activities

• The GHG Protocol Product Standard: can be used to understand the emissions from the complete lifecycle of a product and to focus efforts on the best GHG reduction opportunities

• The GHG Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC): provides a solid framework for accounting and reporting greenhouse gas emissions at city scale

• The GHG Protocol Mitigation Goal Standard: provides guidance for the development of national and subnational mitigation objectives, as well as a standardised approach for assessing and communicating progress towards objectives

• The GHG Protocol Policy and Action Standard: provides a standardised approach for estimating the greenhouse effect of policies and actions

• The GHG Protocol Project Quantification Standard: guide (still limited but under development) whose objective is to quantify GHG reductions from mitigation projects.

The GHG Protocol thus develops internationally recognised calculation and reporting standards in order to facilitate an accurate assessment of GHGs at various scales (organisations, territories and products).

Carrying out a GHG Protocol offers organisations several advantages:

• Simplify and reduce the cost of carbon accounting

• Demonstrate the maturity of organisations to potential investors in terms of environmental management and their capacity to develop effective strategies for reducing GHG emissions.

• Provide information facilitating participation in voluntary or mandatory GHG projects

• Improve harmonisation and transparency of GHG accounting and GHG reporting

What is (are) the target(s) of the approach?

Although primarily designed for companies, this standard is also applicable to NGOs, government agencies (local, regional and national), as well as universities, thus enabling them to valorise their transition initiatives. For example, investors can find a valuable indicator of an organisation's readiness to face future climate policies through rigorous GHG emission management.

The GHG Protocol, recognised and used internationally today, complements other initiatives. It offers companies and organisations the possibility of engaging in GHG emission reporting programmes, whether voluntary or mandatory, as well as in GHG emission trading systems. Furthermore, decision-makers and designers of GHG emission management programmes can integrate the relevant elements of this standard into the development of their own accounting and reporting requirements, as the CSRD has done by drawing inspiration from the GHG Protocol.

Does the approach draw on a shared scientific basis?

The GHG Protocol focuses solely on the accounting and reporting of the seven greenhouse gases covered by the Kyoto Protocol:

1. carbon dioxide (CO2)

2. methane (CH4)

3. nitrous oxide (N2O)

4. hydrofluorocarbons (HFC),

5. perfluorocarbons (PFC)

6. sulphur hexafluoride (SF6)

7. nitrogen trifluoride (NF3).

However, unlike other GHG accounting methods such as the Bilan Carbone®, the GHG Protocol does not take into account certain other GHGs such as chlorofluorocarbons (CFCs) or the condensation vapour trails of aircraft reactors.

Does the approach draw on a specific methodology?

The GHG Protocol method is very similar to other approaches and often serves as the standard model for GHG emission reporting:

1. Organisational boundary (equity share & control), operational boundary (scopes 1, 2 and 3), definition of a reference year...

Scope 1

Direct GHG emissions come from sources owned or controlled by the company. Emissions from biomass combustion as well as GHGs not covered by the Kyoto Protocol must not be included in scope 1 but reported separately.

Scope 2

Scope 2 covers GHG emissions from the generation of purchased electricity and energy consumed by the company within the organisation's boundary.

The definition of scope 2 has been revised to exclude emissions related to electricity purchased for resale, now included in scope 3. This prevents two or more companies from accounting for the same emissions within the same scope.

Scope 3

Scope 3 is an optional reporting category that enables all other indirect emissions to be addressed. Scope 3 emissions are a consequence of the company's activities, but come from sources that are neither owned nor controlled by the company. Indirect emissions from activities upstream of a company's electricity supplier (for example, exploration, drilling, flaring, transportation) are accounted for in scope 3.

1. Calculation recommended according to IPCC guidelines

2. Inventory quality management & uncertainties

3. Calculation of emission reductions

4. Guidance for setting a reduction objective.

Two approaches for GHG emission accounting are possible:

• the equity share approach

• the control approach (can be defined either in financial or operational terms)

It is important to note that these two approaches are not mutually exclusive, but it is encouraged to make the distinction in reporting. Fixed asset investments are not taken into account by either approach, as it is considered that the parent company has neither significant influence nor financial control over these entities (exclusion of joint ventures and partnerships).

Companies must select and justify a reference year with verifiable emission data. Most opt for a single year, but an average over several consecutive years can be used to mitigate atypical fluctuations, thus making the data more representative.

There are two basic approaches to collecting GHG emission data from a company's installations:

1. The centralised approach: individual installations report activity/fuel consumption data at company level, where GHG emissions are calculated.

2. The decentralised approach: individual installations collect activity/fuel consumption data, directly calculate their GHG emissions using approved methods, then report this data at company level.

The revised edition of the GHG Protocol is the result of a two-year dialogue among several stakeholders, aiming to build on the experience gained with the first edition. It includes additional guidance, case studies, appendices, and a new chapter on setting GHG reduction objectives. The first edition remains largely relevant, as the changes made do not affect most GHG inventories.

The choice of accounting boundary depends on the company's characteristics, the intended objective and the needs of users. Several factors must be taken into account, such as:

• organisational structures: control (operational and financial), ownership, legal agreements, joint ventures...

• operational boundaries: on-site and off-site activities, processes, services and impacts

• business context: nature of activities, geographical locations, industrial sector(s), information objectives and information users

All relevant emission sources must be included in the reporting for it to be complete. Although the idea of a materiality threshold may seem useful, it is not compatible with the completeness principle of the GHG Protocol. When emissions have not been estimated or are estimated at an insufficient quality level, it is essential that this is clearly documented and justified.

The GHG Protocol describes five accounting principles that establish an implicit standard for the faithful representation of a company's GHG emissions through its technical, accounting and reporting efforts. A guidance document on uncertainty assessments, as well as an uncertainty calculation tool, have been developed.

Does the approach draw on tools?

Cross-sector and industry-specific tools, developed in partnership with industrial groups such as the International Aluminium Institute and the WBCSD, complement the GHG Protocol to improve the accuracy of emission data. Simplified, they are accessible to non-technical company personnel.

The guidelines for each calculation tool include the following sections:

• Overview: gives an overview of the tool's objective and content, the calculation method used and a description of the process.

• Selection of activity data and emission factors: provides sector-specific best practice guidance and references for default emission factors.

• Calculation methods: describes different calculation methods depending on the availability of site-specific activity data and emission factors.

• Quality control: offers best practice guidance.

• Internal reporting and documentation: provides guidance on internal documentation to support emission calculations.

Can other low-carbon transition methods and tools be used to achieve the objectives of this approach?

The steps of the approach are:

• The boundary (which includes operational boundary definition, description of the value chain, determination of relevant scope 3 categories)

• Accounting (which involves calculating emissions, notably identifying GHG emission sources, collecting emission factors and activity data, applying calculation tools, as well as aggregating GHG emission data)

• The action plan (proposal for setting objectives, optional): refer to the GHG Protocol Mitigation Goal Standard

• Assessment (optional): refer to the GHG Protocol Policy and Action Standard and the GHG Protocol Project Quantification Standard

The stages of defining the boundaries to be accounted for, collecting and analysing data as well as the reduction action plan are all addressed within the Bilan Carbone® methodology, which is therefore compatible with that of the GHG Protocol. Note that the GHG Protocol focuses on reporting issues in order to enhance transparency on the responsibility for organisations' GHG emissions, while the Bilan Carbone® is a strategic steering method that integrates the vulnerability and dependence issues of organisations. Furthermore, the GHG Protocol, in the same way as the Bilan Carbone® and ISO 14064-1, enables an ACT® approach to be launched to assess energy-climate strategies.

Does it allow for third-party recognition? If so, in what way?

Independent or internal verification is possible. The required information is:

1. Organisation's activity and types of emissions

2. General information

3. Details and justifications of any boundary changes during the observed period

4. Procedures for identifying emission sources

5. Information on the degree of assurance in systems and data

6. Data used for the inventory

7. Description of the calculation method

8. Description of the information collection process

9. Other information

Verifiers can assess the potential impact and relevance of excluding certain emission sources or of insufficient overall reporting quality.

Can this approach be harmonised with other international reference frameworks?

The GHG Protocol standard aims to be neutral with respect to programmes and policies, but it is widely used and compatible with many GHG accounting programmes.

• Voluntary GHG reduction programmes (WWF Climate Savers, EPA Climate Leaders)

• GHG registries (California Climate Action Registry, World Economic Forum Global GHG Registry)

• National and regional industry initiatives (New Zealand Business Council for Sustainable Development, AERES)

• GHG emission trading programmes (UK ETS, EU ETS)

• Sectoral protocols developed by industrial associations (International Aluminum Institute, IPIECA)

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