What is the GHG protocol?

The Greenhouse Gas Protocol (also known as the GHG Protocol) is the world's most widely used standard for accounting greenhouse gas emissions. Companies, governments, other organizations and public institutions can use the standards to calculate their emissions transparently. 

The GHG Protocol was established in the 1990s as a standardized framework for reporting greenhouse gas emissions. The standard was developed through a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). Since its first publication in 2001, it has served as the basis for numerous reporting standards worldwide and sets a clear framework for measuring emissions in order to effectively track and achieve climate protection targets.

‍Thestandards of the GHG Protocol

In total, the GHG Protocol distinguishes between seven standardswhich tailor the framework conditions and guidelines to specific areas. These standards formulate important factors for the preparation of_{carbon footprints}, which differ depending on the field of activity of the companies, organizations or institutions. For example, cities require a different implementation of the GHG Protocol than countries or companies. 

1. GHG Protocol Corporate StandardThe GHG Protocol Corporate Accounting and Reporting Standard provides requirements and guidelines for companies and other organizations such as NGOs, government agencies and universities that prepare a greenhouse gas balance sheet at company level. The standard covers the accounting and reporting of seven greenhouse gases defined in the Kyoto Protocol - including carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O). In 2015, the standard was updated with the Scope 2 guideline, which enables companies to credibly measure and report emissions from purchased electricity, steam, heating and cooling.Corporate Value Chain (Scope 3) Standard (supply chain standard)The Corporate Value Chain (Scope 3) Standard enables companies to assess emissions along their entire value chain and identify targeted reduction measures. The standard provides companies with a basis for better understanding their indirect emissions and prioritizing activities to reduce emissions.

2. Corporate Value Chain (Scope 3) Standard (supply chain standard)
   The Corporate Value Chain (Scope 3) Standard enables companies to assess emissions along their entire value chain and identify targeted reduction measures. The standard provides companies with a basis for better understanding their indirect emissions and prioritizing activities to reduce emissions.
   
   
3. GHG Protocol for Cities
   The Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC) provides a framework for recording and reporting greenhouse gas emissions in cities, which are responsible for 75 percent of global CO₂ emissions. To realize the potential to reduce emissions, cities need to measure and target their emissions. The GHG Protocol provides the necessary standards and tools to record emissions, develop strategies, set targets and monitor progress.
   
   
4. Mitigation Goal Standard
   The GHG Protocol Mitigation Goal Standard provides guidance for the development of national and regional mitigation targets and provides a standardized approach for assessing and reporting progress towards achieving targets. It supports governments in setting emission reduction targets, meeting national and international reporting obligations - such as those to the UNFCCC - and ensuring that emission reduction measures achieve their intended results.
   
   
5. Product Life Cycle Standard
   The Product Standard makes it possible to understand the entire life cycle emissions of a product and to focus on the greatest opportunities for reducing greenhouse gases. This is an important step towards more sustainable products. The Product Life Cycle Accounting and Reporting Standard helps to assess emissions throughout the entire life cycle of a product and to take targeted measures to reduce them.
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6. ‍Policyand Action Standard
   The GHG Protocol Policy and Action Standard provides a standardized approach to estimating the greenhouse gas impacts of policies and actions. Analysts at national and local level can use it to assess the emissions effects of specific measures in order to improve their effectiveness and target resources for the best results.
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7. ‍ProjectProtocol
   The GHG Protocol for Project Accounting is the most comprehensive and politically neutral instrument for quantifying the greenhouse gas benefits of climate protection projects. It offers specific principles, concepts and methods for calculating and reporting greenhouse gas reductions, i.e. the reduction of emissions or the increase in storage and removal through climate protection projects.

With the help of these standards, companies can specifically calculate their greenhouse gas emissions and pursue their comprehensive sustainability commitment targets. In addition, the GHG Protocol provides further support for the implementation of the standards by providing guidelines. The areas covered include:

• Scope 2 Guidance (Scope 2 emissions)  
• Scope 3 Calculation Guidance (calculation of Scope 3 emissions)
• Agriculture Guidance (Agriculture)
• The Global GHG Accounting and Reporting Standard for the Financial Industry  
• US Public Sector Protocol (organizations of the public sector in the USA)

The principles of the GHG Protocol

Similar to financial accounting, generally accepted principles of the GHG Protocol should guide the recording and reporting of greenhouse gas emissions. These principles serve as a basis to ensure that the reported information provides an accurate and fair representation of a company's emissions. 

These basic guidelines are explained in detail below:

• Relevance: The principle of relevance ensures that the emissions data collected is relevant and enables decision makers within the organization to make informed decisions.
• Completeness: In accordance with completeness, all significant greenhouse gas emissions within the defined system boundaries must be taken into account and recorded so that they can be reported on in detail. 
• Consistency: The principle of consistency requires that organizations record and report their emissions data in a uniform manner that is consistent over time. This creates a reliable basis for comparing data across different reporting periods.
• Transparency: Transparency requires that there is a comprehensible audit trail and that all questions are answered clearly and consistently. All relevant assumptions must be disclosed and the calculation methods and data sources used must be specified.
• Accuracy: The principle of accuracy aims to ensure that the quantification of greenhouse gas emissions is as precise as possible. This avoids misjudgements and provides stakeholders with reliable information for their decisions.

GHG Protocol: Scope 1, 2, 3 emissions

To calculate company-related emissions, the GHG Protocol records both direct emissionsthat arise within the company and indirect emissions that are caused in the supply chain or by employees. The Greenhouse Gas Protocol divides greenhouse gas emissions into Scope 1, 2 and 3:

• Scope 1 includes direct emissions from owned or controlled sources. Examples of Scope 1 emissions are emissions from company vehicles, air conditioning systems or the company's own fossil-fuel power plants.
• Scope 2 refers to indirect emissions from the procurement of electricity, heating or cooling via a utility company. ‍
• Scope 3 covers all other indirect emissions that arise in a company's value chain : both upstream and downstream in the supply chain. Examples of Scope 3 emissions include employee commuting, investments and purchased goods and services.

While Scope 1 and 2 are mandatory, Scope 3 is still largely voluntary. However, companies that report on Scope 1, 2 and 3 in the GHG Protocol benefit from competitive advantages and are prepared for the Corporate Sustainability Reporting Directive (CSRD). In addition to calculating greenhouse gas emissions, the GHG Protocol is also intended to provide a standardized framework for decarbonization of emissions. 

Why is the GHG Protocol important for companies?

The GHG Protocol is a globally recognized standard for recording and reporting greenhouse gas emissions. It helps companies to systematically measure and manage their emissions and develop a plan to meet their climate targets. It also supports transparency vis-à-vis stakeholders and enables the comparability of emissions data - both within the company and vis-à-vis competitors. By complying with the GHG Protocol, companies meet regulatory requirements, such as the CSRD, and strengthen their sustainable positioning.

How do software solutions help with the implementation of the GHG Protocol?

Software solutions simplify the recording and calculation of greenhouse gas emissions in accordance with the requirements of the GHG Protocol. They automate data collection, enable seamless tracking and ensure that all relevant emission sources are recorded correctly. They also offer clear reporting formats in line with the CSRD and help to make the audit trail transparent. Integration with external data sources improves the accuracy of reporting.

With Planted, you can easily calculate your company's greenhouse gas emissions according to Scope 1 to 3, TÜV-certified and in accordance with the GHG Protocol, supported by AI. Our holistic ESG software solution supports you in recording and analysing all data in a legally compliant manner and decarbonizing it in the next step. Would you like to get to know our software solution? Book a free free consultation appointment.

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