What is GHG Protocol?

What is GHG Protocol?

The Greenhouse Gas Protocol (GHG Protocol) is the world's most widely used set of standards for measuring and managing greenhouse gas emissions from private and public sector operations, value chains, and mitigation actions. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), the GHG Protocol provides the accounting framework that underpins nearly every major corporate emissions disclosure, regulatory requirement, and climate target-setting methodology.

Why It Matters

The GHG Protocol is the lingua franca of carbon accounting. More than 90% of Fortune 500 companies that report emissions use its framework. Every major reporting standard—ISSB, ESRS, GRI, CDP—references or builds upon GHG Protocol methodologies. The Science Based Targets initiative requires GHG Protocol-compliant inventories. Without it, there would be no common language for discussing, comparing, or regulating corporate emissions.

The protocol's scope framework—Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain)—has fundamentally shaped how organizations understand their climate impact. Before this classification, companies reported only what they directly emitted, ignoring the vast majority of emissions embedded in their supply chains and product use. Scope 3, though challenging to measure, now receives the most attention because it typically represents 70-90% of total emissions.

The GHG Protocol is currently undergoing its most significant revision since the Scope 2 Guidance was published in 2015. Updates expected in 2025-2026 will address market-based accounting for Scope 2, Scope 3 calculation methodologies, and land-sector emissions. These revisions reflect a decade of implementation experience and evolving regulatory needs.

How It Works / Key Components

The GHG Protocol suite includes several interconnected standards. The Corporate Standard (revised 2004) provides the foundational framework for corporate-level emissions inventories, establishing organizational and operational boundaries, the three-scope classification, and reporting principles (relevance, completeness, consistency, transparency, accuracy).

The Scope 2 Guidance (2015) introduced the dual reporting requirement: location-based (grid average) and market-based (reflecting contractual instruments like RECs and PPAs) methods. The Corporate Value Chain (Scope 3) Standard (2011) defines 15 upstream and downstream categories of indirect emissions, from purchased goods and services to end-of-life treatment of sold products.

The Product Standard enables organizations to quantify the lifecycle emissions of individual products, while the Mitigation Goal Standard provides guidance for designing and assessing GHG reduction goals. The GHG Protocol also publishes sector-specific guidance, calculation tools, and emissions factor databases.

Implementation requires establishing data collection systems, selecting appropriate emissions factors, making methodological choices (equity share vs. operational control, allocation approaches for shared facilities), and documenting assumptions. The framework is designed to be applicable across sectors, geographies, and organizational sizes, though complexity scales significantly with Scope 3 measurement.

Council Fire's Approach

Council Fire implements GHG Protocol-compliant measurement systems tailored to each client's sector, complexity, and reporting requirements. We build inventories that satisfy multiple disclosure frameworks simultaneously, reducing duplication while ensuring the rigor needed for science-based targets, regulatory compliance, and investor scrutiny.

Frequently Asked Questions

Is the GHG Protocol mandatory?

The GHG Protocol itself is a voluntary standard, but it is incorporated by reference into mandatory frameworks. The CSRD (via ESRS), ISSB (IFRS S2), SEC climate rules, and California disclosure laws all require or reference GHG Protocol-based emissions measurement.

What are the 15 Scope 3 categories?

Upstream: purchased goods/services, capital goods, fuel/energy-related activities, upstream transport, waste, business travel, employee commuting, upstream leased assets. Downstream: downstream transport, processing of sold products, use of sold products, end-of-life treatment, downstream leased assets, franchises, investments.

How often should a company update its GHG inventory?

Annual reporting is standard practice and required by most disclosure frameworks. The base year should be recalculated when structural changes (mergers, divestitures, methodology changes) affect comparability by more than a defined significance threshold, typically 5-10%.