7 Standards of the GHG Protocol

Story at a glance:

• The GHG Protocol is a multi-stakeholder partnership that develops comprehensive frameworks for measuring, managing, and reporting greenhouse gas emissions.
• There are seven GHG Protocol standards: the Corporate Standard, Cities Standard, Mitigation Goal Standard, Corporate Value Chain (Scope 3) Standard, Policy and Action Standard, Product Standard, and Project Protocol.
• Together, the GHG Protocol’s standards are the most credible, accessible, and widely used greenhouse gas accounting and reporting standards in the world.

Emissions reporting has become an invaluable way for governments, countries, cities, businesses, and other entities to better understand their contributions to climate change and identify areas of improvement.

And while there exist many guidelines, methodologies, and procedures for reporting emissions, few are as comprehensive as the GHG Protocol’s standards for measuring and managing greenhouse gas emissions from both public and private sector operations, value chains, and mitigation actions.

This article is an introductory guide to the seven standards of the GHG Protocol.

What is the GHG Protocol?

Developed by the World Resources Institute (WRI) in collaboration with the World Business Council for Sustainable Development, the Greenhouse Gas Protocol—or GHG Protocol—is a multi-stakeholder partnership of businesses, governments, non-governmental organizations, and other entities dedicated to the development of internationally accepted GHG accounting and reporting standards and tools.

According the GHG Protocol’s website, the organization’s mission is to “develop the most credible, accessible, and widely used greenhouse gas accounting and reporting standards and to proactively facilitate their global adoption and implementation.” The overarching goal of the GHG Protocol is to enable and support the creation of a global economy that generates low emissions across the following scopes:

• Scope 1. Direct emissions produced by an organization or entity’s facilities and operations—in short, anything the reporting company owns or controls.
• Scope 2. Refers to those indirect emissions generated as a result of the energy—e.g. electricity, steam, heat, or cooling—that is purchased and used by an entity.
• Scope 3. Commonly referred to as indirect value chain emissions, Scope 3 emissions are produced along the supply chain (upstream) or from the use and disposal of a company’s products (downstream); in most cases Scope 3 emissions account for the largest percentage—often over 70%—of an organization’s total emissions footprint.

The GHG Protocol’s standards, tools, and online training programs are used the world over by countries, cities, and corporations to help design, track, and assess their climate goals.

7 Standards of the GHG Protocol

There are seven standards developed by the GHG Protocol that are designed to serve as guiding frameworks for businesses, governments, and other entities to effectively measure and report their GHG emissions.

1. Corporate Standard

Launched in 2001, the Corporate Accounting and Reporting Standard was the first standard developed by the GHG Protocol and is designed to be used by companies, businesses, and other organizations (e.g. government agencies, universities, and NGOs) as a way to accurately account for and report their GHG emissions over a given period of time.

The Corporate Standard was devised with the following goals in mind:

• Help companies compile a GHG inventory that represents an accurate and fair account of their emissions through the use standardized approaches and principles.
• Simplify and reduce the costs of compiling a comprehensive GHG inventory.
• Increase consistency and transparency in GHG accounting/reporting amongst various companies and programs.
• Provide businesses with information that allows them to build effective strategies to manage and reduce their GHG emissions.
• Provide information that enables participation in both voluntary and mandatory GHG programs.

Every aspect of GHG accounting and reporting under the Corporate Standard—and all GHG Protocol standards, for that matter—is rooted in five core principles: relevance, completeness, consistency, transparency, and accuracy. Adhering to these principles ensures that GHG inventories constitute true and honest reflections of reporting companies’ greenhouse gas emissions.

2. GHG Protocol for Cities

The Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC) is a comprehensive framework for developing a GHG inventory that allows for the reliable accounting and reporting of GHG emissions at the city—or any geographically discernible subnational entity—level. GHG inventories can help cities better understand how different activities contribute to their associated emissions.

To effectively use the GPC, however, cities must first identify an inventory boundary that clearly identifies the geographic area, time span, gases, and emission sources/sectors covered by the GHG inventory. The standard groups emissions both by their scope (where they occur) and source, with the latter being separated into six emission sectors and sub-sectors:

• Stationary energy. Includes residential buildings; commercial and institutional buildings; energy industries; manufacturing and construction industries; agricultural, forestry, and fishing activities; fugitive emissions from oil and natural gas systems; fugitive emissions from mining, processing, storage, and transportation of coal; and emissions from non-specified sources.
• Transportation. Includes emissions from on- and off-road transportation, railways, waterborne navigation, and aviation.
• Waste. Includes disposal of solid waste generated in/outside the city, biological treatment of waste treated in/outside the city, incineration and burning of waste generated in/outside the city, and wastewater generated in/outside the city.
• Industrial processes and product use. Includes industrial processes and product use emissions.
• Agriculture, forestry, and other land use. Includes livestock, land, aggregate sources and non-CO2 emission sources on land.
• Other Scope 3 emissions. Includes other emissions that occur outside of the city’s geographic bounds as a result of city activities.

To comply with GPC requirements, cities must calculate and report their emissions by gas, scope, sector, and subsector, as well as add up all emissions using two separate frameworks—the scopes framework (which totals all emissions by scope 1, 2, or 3) and city-induced framework (which totals GHG emissions attributable only to those activities taking place within the city’s geographic boundaries).

3. Mitigation Goal Standard

Designed primarily for use by national and subnational agencies involved in the setting and tracking of mitigation goals, the GHG Protocol Mitigation Goal Standard serves as a guiding framework for designing national and subnational mitigation goals while simultaneously providing a standardized approach for assessing and reporting progress towards the achievement of said goals.

The Mitigation Goal Standard is designed to be used at all stages of the goal-setting process—from before implementation to after the goal period has ended—and includes eight steps:

• Design the mitigation goal. Identify the mitigation goal by considering global mitigation needs, jurisdiction-specific mitigation opportunities, and development and policy objectives; designing a goal involves choosing which emissions to include in the goal boundary, selecting the mitigation goal type, identifying the timeframe, et cetera.
• Estimate base year/baseline scenario emissions. Users pursuing base year emissions/intensity goals must choose a base year of historic emissions as a reference point for tracking reductions; users pursuing baseline scenario goals, on the other hand, must develop a baseline scenario or reference case that represents those emissions most likely to occur in the absence of a mitigation goal.
• Account for the land sector. Because emissions in the land sector are often significantly impacted by nonhuman activities, it can be difficult to decide how to incorporate the land sector in mitigation goals; for this reason, the standard provides separate guidance to help users choose how to account for land sector emissions in their mitigation goals.
• Calculate allowable emissions in the target period. Using equations provided by the standard, users must calculate the goal’s allowable emissions, or the maximum level of emissions in the target period that are consistent with achieving the goal.
• Assess progress during the goal period. Users should routinely assess and report progress throughout the goal period to better understand trends in emissions and calculate the additional emission reductions needed to achieve the goal.
• Assess goal achievement at the end of the goal period. Compare allowable emissions against calculable emissions at the end of the goal period to assess whether the goal has been achieved; if accountable emissions are equal to or less than the allowable emissions, the goal has been met.
• Verify results. While not a strict requirement, users can choose to verify the results of the goal assessment to help increase user/stakeholder confidence in the results.
• Report results. Once the goal assessment has been obtained, the results must be publicly reported to ensure transparent GHG accounting.

Not all steps will be relevant to all users depending on when the standard is being applied, though a comprehensive approach to setting, assessing, and reporting mitigation goals will typically cover all eight steps over time.

4. Corporate Value Chain (Scope 3) Standard

Developed in collaboration with Carbon Trust, the Corporate Value Chain (Scope 3) Standard is the only internationally recognized and accepted method for companies to account for their value chain emissions. The standard covers the six main greenhouse gas emissions—carbon dioxide, hydrofluorocarbons, perfluorocarbons, methane, nitrous oxide, and sulphur hexafluoride—and is intended to help companies of all sizes assess the emissions impact of their entire value chain to better identify where to focus reduction strategies.

Scope 3 emissions typically account for approximately 70% of a company’s total emissions footprint and encompass all emissions produced along the supply chain (upstream) or from the use and disposal of a company’s products (downstream). The GHG Protocol Corporate Value Chain Standard identifies 15 total categories as being associated with Scope 3 emissions.

Upstream Emissions

Eight emissions categories fall under the definition of upstream emissions:

• Purchased goods and services. Includes all emissions generated during the production of goods, raw materials, and services purchased by a company within the same reporting year.
• Business travel. GHG emissions generated as a result of the vehicles (e.g. planes, trains, light rails, et cetera) used by employees or executives for business-related travel.
• Employee commutes. The GHG emissions produced by the reporting company’s employees as they commute to and from work in vehicles that are not owned by the company.
• Capital goods. Refers to those emissions generated by final products with an extended lifespan (e.g. vehicles, machinery, buildings) that are used by the reporting company to manufacture products, provide services, or store, sell, and deliver merchandise.
• Transportation and distribution. Any emissions stemming from the transportation—be it by land, sea, or air—and distribution of a supplier’s goods, products, or materials.
• Fuel and energy related activities. Encompasses all emissions relating to the production of fuels and energy purchased by a company in the same reporting year and which are not considered scope 1 or 2 emissions.
• Upstream leased assets. Includes all emissions related to the operation of assets leased by the reporting company and which are not already accounted for in the company’s scope 1 or 2 emissions.
• Waste from operations. Refers to those emissions—chiefly methane and nitrous oxide—produced during the disposal of any waste generated by the reporting company’s operations.

Downstream Emissions

The remaining seven categories are associated with a reporting company’s downstream emissions:

• Processing of sold products. Includes emissions produced during the processing of sold intermediate products—or products that necessitate further processing, transformation, or inclusion in another product before they can be used—by third parties subsequent to sale by the reporting company.
• Use of sold products. Refers to any and all emissions stemming from the use of products or services sold by a reporting company during the reporting year; includes the scope 1 and 2 emissions of end users (consumers and business customers).
• End-of-life treatment of sold products. Encompasses the total expected emissions associated with the disposal and treatment of the products sold by a reporting company—during a given reporting year—at the end of their operational lifespans.
• Transportation and distribution of products. Refers to those emissions produced as a result of transporting and distributing sold products in facilities and vehicles that are not owned or otherwise controlled by the reporting company.
• Downstream leased assets. Includes emissions produced as a result of operating assets owned by the reporting company (i.e. the lessor) and leased to other entities within the same reporting year.
• Investments. Encompasses those emissions associated with the reporting company’s equity investments, debt investments, project management investments, and managed investments in the reporting year.
• Franchises. Includes those emissions produced by businesses operating under a license to sell or distribute the reporting company’s goods or services in a given location.

5. Policy and Action Standard

Designed primarily for use at the country- and city-wide levels, the GHG Protocol Policy and Action Standard attempts to provide users with a standardized approach for accurately estimating the greenhouse gas effect of various government policies and actions.

The following comprise the Policy and Action Standard’s main objectives:

• Help users assess the GHG effects of specific policies and actions in an accurate, consistent, transparent, complete, and relevant manner.
• Create more international consistency and transparency regarding the manner in which GHG effects of policies and actions are estimated.
• Support consistent and transparent public reporting of emissions impacts and overall policy effectiveness.
• Aid policymakers and other decision makers in developing effective strategies for managing and reducing GHG emissions by fostering a better understanding of the emissions impacts of policies and actions.

The Policy and Action Standard is designed primarily for analysts and policymakers assessing government policies and actions at the municipal, provincial, state, and national levels, though it can also be used by businesses, non-governmental organizations, donor agencies, research institutions, and financial institutions.

6. Product Standard

Conceptualized as the first step toward manufacturing truly sustainable products, the Product Life Cycle Accounting and Reporting Standard is designed to help companies better understand the emissions associated with a product across its entire life-cycle—including the procurement of raw materials, manufacturing, transporting, et cetera—and identify the greatest GHG reduction opportunities.

This standard is primarily intended to help companies make smarter and more informed choices when it comes to the products they design, manufacture, sell, purchase, or use and provides requirements and guidance for businesses, companies, and other organizations to quantify and publicly report an inventory of GHG emissions and removals associated with a specific good or service.

Other business goals served by the Product Standard include:

• Product differentiation. Creating a GHG inventory can help companies strengthen their reputation and brand image, enhance employee recruitment and retention, and achieve a competitive advantage.
• Performance tracking. The Product Standard helps companies set product-related GHG reduction targets, measure and report GHG performance over time, and track efficiency improvements over the course of a product’s life cycle.
• Climate change management. Product-related GHG inventories can help companies identify climate-related physical and regulatory risks in a product’s life cycle, assess risks from fluctuations and inconsistencies in material availability and energy costs, and identify new regulatory incentives and market opportunities.
• Supplier and customer stewardship. Following the Product Standard guidelines makes it easier for companies to assess supplier performance, reduce GHG emissions and energy use/costs/risks in the supply chain, and educate customers on how to reduce their GHG emissions.

From a technical standpoint, the Product Standard is closely linked to the ISO Life Cycle Assessment (LCA) standards and utilizes accounting methodologies that follow the attributional life cycle approach as established in ISO LCA standards 14040 and 14044.

7. Project Protocol

The GHG Protocol for Project Accounting is the world’s single-most comprehensive, policy-neutral accounting tool for project developers to quantify the greenhouse gas benefits of climate change mitigation projects, or those activities which result in either GHG reductions or that increase the removal/storage of emissions.

Ultimately the Project Protocol was designed to fulfill the following objectives:

• Provide a credible and transparent approach for quantifying and reporting the GHG reductions from GHG projects.
• Enhance the credibility of GHG project accounting as a whole through the application of common accounting principles, concepts, and procedures.
• Provide a platform that allows different project-based GHG programs and initiatives to harmonize with one another.

The Project Protocol presents several requirements and outlines specific concepts, principles, and methods for quantifying and reporting the GHG effects—both intended and unintended—caused by project activities. It is intended to be used primarily by project developers, but may also be of interest to administrators and designers of initiatives/programs that incorporate GHG projects, third-party verifiers for said projects, and any entity looking to quantify the GHG reductions associated with their project(s).

Grid-Connected Electricity Projects

The Guidance for Grid-Connected Electricity Projects was developed by WRI to provide detailed guidance on how to account for and report greenhouse gas emissions reductions created by projects designed to displace or otherwise avoid power generation on electricity grids. These guidelines are intended to be used by designers of initiatives and programs that incorporate grid-connected GHG projects as well as project developers looking to quantify GHG reductions outside of a specific GHG regulatory system or offset program.

It’s important to note, however, that these guidelines are not meant to replace the GHG Protocol for Project Accounting—rather, they are designed to be used in conjunction with the Project Protocol standard.

Land-Use, Land-Use Change, and Forestry Projects

WRI also developed the Land-Use, Land-Use Change, and Forestry (LULUCF) Guidance for GHG Project Accounting to supplement—but not replace—the GHG Protocol for Project Accounting and provide more specific guidance using more appropriate terminology to quantify and report GHG reductions from LULUCF project activities.

The guidelines focus primarily on forest management and reforestation projects, though they are designed to be used for all LULUCF project activities.