To accelerate sustainability impact, businesses need to understand and take control of their greenhouse gas (GHG) emissions. Measuring emissions is the foundation for making informed decisions that drive real change. A key tool in this work is the Greenhouse Gas Protocol (GHG Protocol), which provides a standardized framework for GHG accounting and reporting. For SustainLab and our clients, understanding and implementing the GHG Protocol is essential in building a more sustainable future.

What is the GHG Protocol?

The GHG Protocol is a comprehensive global standard for measuring and managing GHG emissions. It was developed through a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), bringing together environmental experts and business leaders to create a unified approach to GHG accounting.

Who is behind the GHG Protocol?

The initiative is co-managed by the WRI, a global research organization focused on sustainability, and the WBCSD, a CEO-led organization of over 200 international companies working towards sustainable development. This collaboration ensures that the GHG Protocol is both scientifically robust and practically applicable for businesses worldwide.

Understanding Scope 1, 2, and 3 emissions

The GHG Protocol categorizes emissions into three "scopes" to help organizations comprehensively assess their GHG footprint:

Scope 1: Direct emissions

These are emissions from sources that are owned or controlled by the company, such as emissions from company vehicles or on-site fuel combustion.

Scope 2: Indirect emissions from purchased energy

These emissions result from the generation of purchased electricity, heat, or steam consumed by the company.

Scope 3: Other indirect emissions

These include all other indirect emissions that occur in the value chain of the reporting company, such as emissions from purchased goods and services, business travel, and product use.

For a detailed breakdown and explainers for categories in each scope, read more here.

What are the mandatory reporting requirements for emissions?

Scope 1 and Scope 2: Required for all businesses

Companies are required to report Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from purchased energy) under the GHG Protocol. These emissions are relatively straightforward to measure and track, as they come from sources that companies own or control.

Scope 3: Often the biggest footprint but not always mandatory

Scope 3 emissions account for all indirect emissions occurring in a company’s value chain. While reporting Scope 3 is not always mandatory, it is highly recommended since these emissions often represent the largest portion of a company’s total carbon footprint.

In fact, studies show that Scope 3 emissions typically account for 70-90% of a company’s total emissions, depending on the industry. In sectors like retail, finance, and manufacturing, the percentage can be even higher (GHG Protocol).

Since Scope 3 includes emissions from suppliers, product use, and logistics, tackling these emissions is often where businesses can make the most significant climate impact.

What should be included in GHG accounting?

When conducting a GHG inventory, it's essential to include all relevant emission sources within the defined organizational and operational boundaries. This comprehensive approach ensures that the GHG inventory reflects the true environmental impact of the organization's activities.

The five principles of GHG accounting

The GHG Protocol is founded on five key principles to ensure the quality and credibility of GHG inventories:

1. Relevance
   Ensure the GHG inventory appropriately reflects the emissions of the company and serves the decision-making needs of users.
   
   

2. Completeness
   Account for and report all GHG emission sources and activities within the chosen inventory boundary. Disclose and justify any specific exclusions.
   
   

3. Consistency
   Use consistent methodologies to allow for meaningful comparisons of emissions over time. Document any changes in data, inventory boundary, or methods transparently.
   
   

4. Transparency
   Address all relevant issues factually and coherently, based on a clear audit trail. Disclose assumptions and reference methodologies and data sources.
   
   

5. Accuracy
   Ensure that calculations are neither over nor under actual emissions and that uncertainties are minimized as much as possible. Achieve sufficient accuracy to enable businesses to make informed decisions.
   
   
   

What is a carbon dioxide equivalent (CO₂e)?

Not all greenhouse gases (GHGs) have the same impact on global warming. To compare their effects, emissions are measured in carbon dioxide equivalents (CO₂e), which adjust for their global warming potential (GWP) over a 100-year period.

For example, methane (CH₄) has a GWP of around 28, meaning it traps about 28 times more heat than carbon dioxide (CO₂) over the same timeframe. Nitrous oxide (N₂O) is even more potent, with a GWP of 273. Some fluorinated gases, such as sulfur hexafluoride (SF₆), have a GWP exceeding 22,000, making them thousands of times more impactful than CO₂.

By expressing emissions in CO₂e, businesses can accurately compare their climate impact and prioritize reductions where they matter most (IPCC, 2021).

SustainLab’s carbon accounting solution

At SustainLab, we are committed to empowering organizations with the tools and knowledge to effectively measure and manage their GHG emissions. By aligning with the GHG Protocol, we ensure that our methodologies are standardized, transparent, and globally recognized, enabling our clients to confidently report their environmental performance and make informed decisions toward sustainability.


Contact us today to learn more!


Read more: FAQ on Scope 3