What is GHG Protocol Standard?

GHG protocol

Blog by Lavanya Pawar
Published on July 20, 2022

As a measure for fighting climate change, governments, industries, NGOs and others were discussing a need for a standard for measuring GHG emissions. In 1997, World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD) formed a NGO partnership to develop a standard that would help private and public organizations to account for their GHG emissions. Today, GHG Protocol provides the most widely used GHG accounting standards.
The two large users of the standards are (1) companies and organizations and (2) countries and cities. The widespread use of the standards can be judged by the fact that more than 90% of Fortune 500 companies responding to the CDP use GHG Protocol directly or indirectly for doing so. Along with the standards, the Protocol also provides guidances, tools and trainings for businesses and governments to measure their carbon emissions. The GHG Protocol convenes governance bodies that guide the development of its accounting and reporting standards which include an Advisory Committee, Technical Working Groups, Review Group, Pilot Testing Group, and the Secretariat.

What are the various standards under GHG Protocol?

The GHG Protocol provides a number of standards among which the Corporate Accounting and Reporting Standard is the most widely used. The other popular ones are Corporate Value Chain (Scope 3) Standard and Product Life Cycle Standard. The Corporate Standard provides requirements and guidance for companies and other organizations preparing a corporate-level GHG emissions inventory. These standards cover reporting for the seven greenhouse gases covered under the Kyoto Protocol and are available in 8 different languages. In 2015, a guidance for measuring emissions caused due to usage of electricity, steam, heat and cooling was also added to the standard called Scope 2 guidance. Earlier, the standards covered guidance on reporting on emissions under what is called Scope 1, which covers emissions happening from activities happening within an organization’s operational boundaries such as emissions arising from combustion, and fugitive emissions associated with refrigerant use. The Scope 3 standard has been prepared after an exhaustive multi-stakeholder process which included participants from 55 countries which formed a 96 member larger technical working group.

What is the Scope 3 Standard in GHG Protocol?

Released in 2013, the Scope 3 standards provide guidance for companies to measure their emissions across their value chain and identify reduction opportunities as a result. The standard has defined 15 categories under the guidance which covers raw materials and goods purchased, end of life treatment of sold products and also emissions occurring at leased assets. As accounting for Scope 3 emissions involves coordination with stakeholders across the value chain, a large percentage of organizations had not taken up the challenge of determining their indirect emissions. However, in the last few years, there has been an increased interest in calculating Scope 3 emissions among organizations. The reason for this is multi-factor. Not-for-profit organizations such CDP has repeatedly pressed for increasing the scope of calculations to the supply chains and WRI’s SBTi initiative no longer accepts targets which do not include Scope 3. This and pressure from customers and the larger civil society has pushed large corporations to calculate their Scope 3 emissions, in turn pushing their suppliers to calculate their emissions. For a large percentage of industries, Category 1, i.e. purchased raw material and capital goods contribute the most to their total emissions. Under the Scope 3 guidance, companies may choose to report industry-average emission values or reach out to their suppliers to get 100% accurate information on their own supply chain. The guidance recommends the latter as companies then have a better view on the immediate opportunities to reduce which may differ very much from what is an average for a particular industry.

How is the GHG Protocol Standard evolving and how can you contribute?

The GHG accounting standards are ever evolving. However, they rest on a firm base of principles much similar to the financial accounting and reporting principles. They are — relevance, completeness, consistency, transparency and accuracy. In the vein of evolution and additions, the GHG protocol is starting a process to collect stakeholder input to ‘understand the need, scope and potential approaches to inform updates or additional guidance’ related to various standards of the GHG protocol. To take part in the survey and submit a proposal, you may visit : GHG Protocol Survey

Is Carboledger aligned to GHG Protocol?

The GHG Protocol has done a tremendous job of bringing all corporations in the world under one standard of accounting and reporting. The popularity of the GHG protocol is also due to the fact that it is compatible with various other national and international GHG accounting and reporting programs. Other such standards and programs include ISO 14064, EPA’s Greenhouse Gas Reporting Program among others. Carboledger’s GHG Accounting Tool is designed on the GHG protocol and is updated based on the additional guidances and standards released by the GHG protocol. We are also dedicated to enable companies measure their Scope 3 emissions based on the GHG Protocol recommended supplier-specific primary data.

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