The GHG Protocol’s Role in Meeting GHG Reporting Requirements

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The first and foundational step in any corporate sustainability reporting is understanding the regulatory requirements – what jurisdiction(s) are you reporting to? Determining this informs what standards are going to be used. For example, if you are subject to the European Union’s Corporate Sustainability Reporting Directive (CSRD), then you will be required to report your company’s Greenhouse Gas (GHG) emissions in the European Sustainability Reporting Standards (ESRS) E1 Climate Change.

Many evolving sustainability reporting requirements drive GHG reporting, but the Greenhouse Gas Protocol (GHG Protocol) generally underpins all regulatory requirements. The key word here is “interoperability” meaning that if you disclose using the GHG Protocol, you are off to a great start for meeting nuanced jurisdictional or regulatory needs.

What is the GHG Protocol?

The GHG Protocol is the most commonly used reporting and accounting standard for GHG emissions. It addresses the seven GHGs:

  • Carbon dioxide (CO2): The primary greenhouse gas emitted by human activities, mainly from the combustion of fossil fuels 

  • Methane (CH4): Produced by natural sources such as wetlands and human activities like livestock farming and natural gas leaks 

  • Nitrous oxide (N2O): Released from agricultural practices, especially fertilizer use and industrial activities. 

  • Hydrofluorocarbons (HFCs): Used in refrigeration and air conditioning

  • Perfluorocarbons (PFCs): Used in various industrial applications

  • Sulfur hexafluoride (SF6): Used in electrical equipment

  • Nitrogen trifluoride (NF3): Used in semiconductor manufacturing

The GHG Protocol was introduced in 1998 as an initiative driven by the World Business Council for Sustainable Development (WBCSD) and the World Resource Institute (WRI). The GHG Protocol has multiple standards and guidance documents that cover the many aspects of GHG emissions reporting, of which the first was issued in 2004. The documents are publicly available on the GHG Protocol website.

The Key GHG Protocol Documents

Out of the many standards and guidance documents currently listed on the GHG Protocol website, the three listed below are the ones most commonly used for Corporate GHG inventory reporting:

The Corporate Accounting and Reporting Standard

The Corporate Accounting and Reporting Standard was the first standard published, laying the foundation for measurements and reporting for corporate entities. It broadly covers GHG emissions measurements and accounting specifics for companies and other organizations preparing a corporate-level GHG emissions inventory. It was updated in 2015 with the Scope 2 Guidance (see below).

The Scope 2 Guidance

The Scope 2 Guidance is an amendment to the Corporate Standard, that provides specific details related to how corporations measure Scope 2 emissions from purchased or acquired electricity, steam, heat, and cooling.

Importantly, when ESRS refers to the GHG Protocol, it is essential to use this document since the Scope 2 Calculation Guidance is an amendment to the Corporate Guidance.

The Corporate Value Chain (Scope 3) Standard  

The Corporate Value Chain (Scope 3) Standard is supplemental to the Corporate Standard. ESRS specifically references this document. Released in 2011, the Scope 3 Standard is the only internationally accepted method for companies to account for value chain emissions—from the goods a company purchases to the disposal of the products it sells.

Note that there is a companion document that discusses calculation guidance for each of the 15 categories of Scope 3.

How does the GHG Protocol integrate with mandatory emissions reporting?

We work with many companies that have historically reported GHG emissions on a voluntary basis using the GHG Protocol. These companies are now well positioned to comply with the many mandatory GHG emission reporting requirements that generally refer to the GHG Protocol.

Map of Global Mandatory GHG Reporting Requirements

In October 2024, the GHG Protocol released an update on how its standards and guidance are integrated into the major climate-related disclosure rules that are either in effect or under development.

What are the major GHG emissions reporting requirements?

All the major GHG emissions reporting requirements consistently require reporting GHG emissions in accordance with or suggest using the GHG Protocol.

ESRS E1 Requirements

The European Sustainability Reporting Standards (ESRS) was issued under the CSRD and includes GHG emissions reporting in ESRS E1 Climate Change. ESRS E1 requires reporting of Scope 1, 2, and 3 GHG emissions. It specifically refers to the GHG Protocol for measurement guidance. ESRS E1 also provides the option for ISO 14064-1:2018 GHG emissions measurement methodology only if it does not conflict with the guidance in the GHG Protocol.  

IFRS S2 Requirements

The International Financial Reporting Standard (IFRS) was issued by ISSB and requires GHG emission reporting in IFRS S2 Climate-related Disclosures. The IFRS S2 requires companies to use the GHG Protocol to measure GHG emissions to the extent that it does not conflict with IFRS S2 requirements. However, IFRS S2 also allows for “Jurisdictional Relief,” which means when companies are subject to specific jurisdiction reporting requirements, they may use those jurisdictions' measurement methodologies instead of the GHG Protocol.

California SB 253 & SB 261 Requirements

California SB 253 requires Scope 1, 2, and Scope 3 GHG emissions reporting in accordance with the GHG Protocol. CA SB 261 requires Scope 1 and 2, GHG emissions reporting under the Task Force on Climate-Related Financial Disclosures (TCFD), which requires Scope 1 and 2 and strongly encourages Scope 3 in accordance with the GHG Protocol.

What is next for the GHG Protocol?

Recognizing the need to update the standards, the GHG Protocol issued a series of surveys last year regarding the updates and then summarized the results. We anticipate updates to the standards and guidance in 2025 and 2026.

KERAMIDA’s professionals help companies meet rapidly evolving regulatory requirements. For personalized assistance in navigating the reporting requirements, contact us or call (800) 508-8034 to speak with one of our Sustainability professionals today.

Author

Becky Twohey, Ph.D., GRI, FSA
Vice President, Sustainability
KERAMIDA Inc.

Contact Becky at btwohey@keramida.com.

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