What is the GHG Protocol?
The Greenhouse Gas Protocol (GHG Protocol) is the world's leading standard for the greenhouse gas accounting of companies and products. It was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
The aim of the GHG Protocol is to provide companies with a standardised, transparent and comparable method for calculating their carbon footprint, the Corporate Carbon Footprint ( CCF for short) and the Product Carbon Footprint ( PCF for short), based on comprehensible and valid recording and calculation methods.
There is a close link between climate and energy management: a very large proportion of greenhouse gas emissions are associated with energy generation and utilisation.
What does a greenhouse gas balance include?
A greenhouse gas balance according to the GHG Protocol records all relevant greenhouse gases (GHG) and presents them in CO₂ equivalents (CO₂e). In addition to CO₂, this also includes:
- Methane (CH₄)
- Nitrous oxide (N₂O)
- Fluorinated gases (HFCs, PFCs, SF₆, NF₃)
These are converted into CO2 equivalents.
Together with the ISO 14064 series of standards, the GHG Protocol is one of the most frequently used standards for greenhouse gas accounting (GHG accounting).
Scope 1, 2 and 3 explained simply
The GHG Protocol divides emissions into three scopes, which are decisive for a company's carbon footprint:
Scope 1: Direct emissions
All direct emission sources within the system boundary - i.e. emissions from own or controlled sources, e.g:
- Production facilities
- Company vehicles
Scope 2: Indirect emissions from energy
All indirect emission sources that relate to grid-bound energy sources that are generated and purchased outside the organisation, such as
- Electricity
- District heating
A distinction is made here between location-based and market-based calculation.
Scope 3: Other indirect emissions
All other indirect sources of emissions along the entire value chain, e.g:
- Supply chains (purchased goods)
- Business trips
- Use and disposal of products
Scope 3 comprises 15 categories along the upstream and downstream value chain and often accounts for the largest share of emissions.
Survey of Scope 3
The survey of Scope 3 can be highly complex. The effort involved can be high. In contrast to the first two scopes, the original GHG Protocol Standard does not require Scope 3 to be recorded in every case. De facto, however, the survey is already common practice for many companies today. This is because initiatives such as the Science Based Targets initiative and reporting standards such as the Corporate Sustainability Reporting Directive (CSRD) are increasingly demanding comprehensive consideration of indirect emissions.
In many industries, Scope 3 accounts for over 90 % of the total CO₂ footprint.
Double counting in the CO₂ balance sheet
In greenhouse gas accounting, double counting can occur along the supply chain , particularly in Scope 3. This is system-related and is accepted in the GHG Protocol, as the focus is on the transparency of individual companies - not on a globally aggregated emissions total.
Greenhouse gas accounting according to the Greenhouse Gas Protocol
The structure of greenhouse gas accounting is similar to that of accounting. It is therefore based on the fundamental principles of relevance, completeness, consistency, accuracy and transparency.
Depending on the organisational structure, different accounting boundaries (system boundaries) can be defined. To this end, the GHG Protocol provides various methods for defining organisational and operational boundaries in order to appropriately reflect different corporate structures.
All greenhouse gas emission sources (GHG sources) within the defined system boundaries must then be identified and recorded. In addition, emission sources that lie outside the direct system boundaries but are related to the organisation or its products (particularly along the value chain) should also be taken into account.
This includes, in particular, supply chain emissions and energy-related emissions that are relevant in the context of Scope 2 and Scope 3 accounting.
Ideally, emissions are calculated on the basis of primary data (measurements). In practice, however, emissions are often calculated using emission factors and activity data, such as energy consumption or material quantities.