In a world where climate urgency is emerging as one of the major challenges of our century, companies must measure and reduce their carbon footprint. Faced with this challenge, having a reliable and internationally recognized methodology has become indispensable. It is precisely in this context that the GHG Protocol (Greenhouse Gas Protocol) has emerged as the world reference in terms of greenhouse gas emission accounting.
Developed jointly by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) in the early 2000s, the GHG Protocol offers a standardized framework allowing organizations of all sizes and sectors to measure and manage their emissions with rigor and transparency. More than just a calculation tool, it is now the common language of carbon accounting on an international scale.
Whether you are a CSR manager looking to initiate a carbon measurement approach, a financial director anticipating regulatory obligations, or a consultant supporting companies in their ecological transition, understanding the fundamentals of the GHG Protocol is now essential. In this article, we will explore in detail what the GHG Protocol is, why it has become the reference standard, how it differs from other methodologies such as the Bilan Carbone®, and above all, how to apply it concretely within your organization to derive all the strategic and operational benefits.
1. What is the GHG Protocol?
1.1 Definition and history
The GHG Protocol, Greenhouse Gas Protocol, is a set of internationally recognized standards, tools, and guidelines for measuring and managing greenhouse gas (GHG) emissions from private and public operations, value chains, and mitigation actions.
Launched in 1998 by a joint initiative of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), the GHG Protocol was born from a simple observation: the absence of a standardized methodology for accounting for GHG emissions prevented any reliable comparison between organizations and limited the credibility of reduction efforts.
The first standard, the "Corporate Standard" (Standard for companies), was published in 2001, then revised in 2004. This founding standard established the conceptual framework that would structure all subsequent developments of the GHG Protocol. Over the years, in response to growing needs for precision and comprehensiveness, other standards have come to complement this initial framework, notably the "Scope 3 Standard" in 2011, which made it possible to integrate indirect emissions from the value chain.
1.2 Objectives and fundamental principles
The GHG Protocol pursues several complementary objectives:
- Provide a rigorous accounting framework for measuring GHG emissions
- Simplify and reduce the costs of conducting GHG inventories
- Provide companies with information to build effective GHG reduction strategies
- Facilitate transparency and accountability in climate matters
To achieve these objectives, the GHG Protocol relies on five fundamental principles that guarantee the integrity of emission inventories:
- Relevance: The inventory must faithfully reflect the organization's emissions and meet the decision-making needs of users.
- Completeness: All significant emission sources must be included, with a clear justification for any exclusions.
- Consistency: Methodologies must allow for meaningful comparisons over time, with transparent documentation of any changes.
- Transparency: All relevant issues must be addressed in a factual and consistent manner, with a clear history of the assumptions and methods used.
- Accuracy: Emission quantifications must not be systematically overestimated or underestimated, and uncertainties must be minimized as much as possible.
These principles guide each step of the implementation of the GHG Protocol and serve as a reference for resolving methodological dilemmas that may arise during accounting.
1.3 Structure and standards of the GHG Protocol
The GHG Protocol is not a single standard but rather a family of standards adapted to different needs and contexts. Its main components are:
Corporate Standard
Cornerstone of the GHG Protocol, this standard provides the requirements and guidelines for accounting and reporting GHG emissions at the organizational level. It introduces the concepts of organizational boundaries (control or equity share approach) and emission scopes (1, 2, and 3).
Scope 2 Guidance
Published in 2015, this guide specifies the modalities for accounting for indirect emissions related to the consumption of electricity, steam, heat, and cold. It notably introduces the "market-based" and "location-based" calculation methods to reflect the energy choices of organizations.
Corporate Value Chain Standard
This standard extends the accounting framework to indirect emissions throughout the value chain, defining 15 categories of upstream and downstream emissions. It provides a comprehensive view of an organization's carbon footprint, often essential for identifying priority action levers.
Product Standard
Focused on the life cycle of products and services, this standard allows calculating the carbon footprint associated with a specific product, from raw material extraction to end-of-life.
Project Protocol
This protocol provides principles, concepts, and methods for quantifying and reporting emissions reductions associated with specific projects, such as energy efficiency or renewable energy projects.
Mitigation Goal Standard and Policy and Action Standard
These more recent standards are primarily aimed at governments and local authorities to help them define and track reduction targets at the scale of public policies or territories.
This architecture is the strength of the GHG Protocol: while maintaining overall methodological coherence, it allows each organization to mobilize the most relevant standards for its situation and specific objectives.
2. The importance of the GHG Protocol for companies
2.1 Regulatory compliance and reporting
Since the GHG Protocol is today the world reference in carbon accounting, it is used in many international regulatory and reporting frameworks.
This is the case for:
- the CSRD: the ESRS stipulate that greenhouse gas emissions must be calculated and published in accordance with the GHG Protocol (or the ISO 14064 standard).
- SBTi targets: the SBTi (Science Based Targets initiative) is aligned with the GHG Protocol to ensure that companies use the same methodology to calculate and manage their GHG emissions.
- ISSB standards: in the IFRS S2 reporting standard, related to climate, companies are required to measure their greenhouse gas emissions in accordance with the GHG Protocol.
- CDP questionnaires: the CDP (Carbon Disclosure Project) relies on the GHG Protocol for the publication of greenhouse gas emissions from companies responding to the questionnaire. According to the figures provided by the GHG Protocol, in 2023, 97% of S&P 500 companies communicated their data to the CDP using the GHG Protocol.
- GRI standards: The requirements related to GHG emissions in the GRI standards are based on the GHG Protocol (Corporate Standard and Corporate Value Chain Standard).
Read our article on the different extra-financial reporting standards.
Thus, while the sustainability reporting requirements from investors and other company stakeholders are becoming increasingly important, the GHG Protocol is establishing itself as an essential methodology to meet them.
2.2 Competitive and strategic advantages
Measuring and managing greenhouse gas emissions using an internationally recognized method such as the GHG Protocol (or other methodologies such as the Carbon Footprint) brings many benefits beyond reporting or regulatory compliance. Here are a few:
Environmental benefits
- Concrete reduction of climate impact
- Contribution to national and international objectives
- Preservation of natural resources
Economic benefits
- Identification of savings opportunities (energy, raw materials...)
- Anticipation of risks related to the ecological transition
- Competitive advantage on environmentally sensitive markets
Read our article on the economic benefits of conducting a carbon footprint.
Strategic benefits
- Improvement of image and reputation
- Strengthening attractiveness for talents and investors
- Development of a committed corporate culture
Read our article on the reasons why the carbon footprint is a major strategic exercise.
3. Application of the GHG Protocol
3.1 The 3 scopes of emissions
The GHG Protocol is the methodology that originated the categorization of greenhouse gas emissions into 3 different scopes, scopes 1, 2 and 3. This categorization has since been adopted in other methodologies such as the ISO 14064 standard.
- Scope 1: direct greenhouse gas emissions
These are greenhouse gas emissions that occur directly at the company level. Some examples:
- emissions related to gas heating in an office or factory
- emissions related to the combustion of fuel from company-owned service vehicles
- leaks of refrigerants from an air conditioner, a fridge or a cold room
- Scope 2: indirect emissions related to energy
These are mainly emissions related to electricity, which does not emit directly at the workplace but at the time of its production (the combustion of a gas power plant for example).
- Scope 3: other indirect emissions
These are all other emissions. Scope 3 is very broad by definition and generally represents the vast majority of emissions related to a company's activity.
Some examples of “scope 3” emissions:
- purchases of goods and raw materials
- purchases of services (administrative, digital, etc)
- the use of products or services sold
Find out more in our article dedicated to scopes 1, 2 and 3.
3.2 The main steps of implementing the GHG Protocol
The methodology for implementing the GHG Protocol is very close to that of the ISO 14064 standard:
- Determine the organizational perimeter: share of capital and control
- Determine the operational perimeter: which emissions to take into account and classification of direct emissions (scope 1) and indirect emissions (scopes 2 and 3)
- Define a reference year: choice of a reference year for which verifiable data is available
- Calculate GHG emissions: identification of emissions, data collection, choice of emission factors...
- Manage the quality of the emissions inventory and uncertainties
- Calculate emission reductions
- Declare the results of the GHG emissions inventory
- Define a GHG emission reduction target
4. GHG Protocol vs other carbon accounting methods
4.1 Comparison with the Carbon Footprint® method
The Carbon Footprint® is a method developed by the French government and the ADEME and was launched in 2004. It has become the reference in France for measuring the carbon footprint of companies and other organizations. The methodology is now managed by the Association for the Low-Carbon Transition (ABC).
The GHG Protocol and Carbon Footprint® methodologies are quite similar overall, but there are some differences in the accounting of emissions.
Accounting for scope 2
Scope 2 includes emissions related to electricity consumption. Two different approaches exist for these emissions:
- the so-called market-based approach: the emissions taken into account are related to the generation of electricity from the supplier's production methods or electricity contract, or the residual mix if the origin of the electricity cannot be traced.
- The so-called Location-based approach: the emissions taken into account are linked to the generation of electricity from the average electricity mix of the country of consumption. The mode of production of the supplier or the contract is not taken into account.
The GHG Protocol methodology accepts both approaches, while the Bilan Carbone® and the regulatory BEGES only accept the Location-based approach.
Accounting for fixed assets
- GHG Protocol: only fixed assets acquired during the year under study are taken into account, without depreciation. Thus, a company that bought a machine (10 years of life) in the reporting year will have to account for all emissions related to the manufacture of the machine. But not those of another machine (8 years of life) bought two years earlier, for example.
- Bilan Carbone® and regulatory BEGES: emissions related to fixed assets are depreciated over the life of the assets. In our example, the company will thus have to account for 1/10th of the emissions of the machine bought in the reporting year and 1/8th of the other machine bought two years earlier.
4.2 Comparison with ISO 14064
The ISO 14064 standard is heavily based on the recommendations of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) and is therefore very similar to the GHG Protocol methodology.
Thus, on the accounting of scope 2, like the GHG Protocol, the ISO 14064 standard accepts the Market-based and Location-based approaches. On fixed assets, the ISO methodology accepts both methods.
4.3 Classification of emissions
Even if the Bilan Carbone® and the GHG Protocol distribute GHG emissions between scopes 1, 2 and 3, there are still some differences in the categorization of emissions. Here is a summary table of the differences in the classification of emissions between the regulatory BEGES, the Bilan Carbone® and the GHG Protocol.
5. Sami and the GHG Protocol
The Sami software and our consultant.e.s are able to manage the different methodologies for measuring and managing GHG emissions, including the GHG Protocol, in order to best support you according to your needs and requests.
And equipping yourself with a software solution is essential in order to be as effective as possible.
Here is the Top 5 of the key features that the carbon software you select should have:
- Adaptation to your organization
- Management of organizational units (subsidiaries, BU, countries, sites)
- Customization according to your structure
- Data collection systems
- Customizable collectors and questionnaires
- Import of CSV/Excel files
- API available
- Analysis of results
- Visualization by organizational unit
- Customization of categories
- Calculation of carbon intensities
- Reduction trajectory
- Definition of absolute and intensity objectives
- Alignment with SBTi methodologies
- Taking into account economic growth
- Regulatory reporting
- Export to BEGES, GHG Protocol formats
- Compliance with CSRD/ESRS/VSME
- Export of carbon data to other CSR references
Discover our complete guide to select the best carbon software for your company!
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6. FAQ
What differentiates scope 1, 2, and 3?
Scopes 1, 2, and 3 represent different categories of greenhouse gas (GHG) emissions based on their source and the level of control an organization has over them:
- Scope 1 (direct emissions): These are emissions directly produced by activities controlled by the organization.
- Scope 2 (indirect emissions related to energy): These emissions come from the production of electricity, heat, steam, or cooling purchased and consumed by the organization.
- Scope 3 (other indirect emissions): This category includes all other indirect emissions in the organization's value chain.
Is the GHG Protocol mandatory?
The GHG Protocol is not legally binding in itself, but its adoption depends on the regulatory context of each country:
- In Europe, although the GHG Protocol is not directly mandatory, the European Directive on extra-financial reporting (CSRD) and the European regulation on the green taxonomy impose requirements that closely align with its principles.
- In France, regulations on the Greenhouse Gas Emissions Report (BEGES) and the CSR report make it mandatory for certain organizations to report emissions, often according to methodologies compatible with the GHG Protocol.
- At the international level, the GHG Protocol has become a de facto standard for many voluntary initiatives such as the CDP (Carbon Disclosure Project) and the Science-Based Targets initiative (SBTi).
How to choose between the GHG Protocol and the Bilan Carbone®?
The choice between the GHG Protocol and the Bilan Carbone® depends on several factors:
- Geographical context: The Bilan Carbone® is particularly suited to the French context, with emission factors specific to France, while the GHG Protocol has an international scope.
- Regulatory requirements: In France, certain regulations are more compatible with the Bilan Carbone®, while international companies may prefer the GHG Protocol to harmonize their reporting.
- Level of detail: The Bilan Carbone® generally offers a more detailed approach for certain emission items and a more structured methodology for data collection.
- Compatibility: It is important to note that these two methods are widely compatible.
For organizations operating mainly in France, the Bilan Carbone® may offer a more suitable methodology, while international companies will often prefer the GHG Protocol for its global recognition.
How to effectively reduce emissions once they are measured?
Once emissions are measured according to the GHG Protocol, several strategies can be deployed to reduce them:
- Prioritization of actions: Prioritize actions based on the importance of emissions and the potential for reduction.
- Science-Based Targets: Set reduction targets aligned with climate science, notably through the SBTi initiative, to ensure that efforts are compatible with the objectives of the Paris Agreement.
- Energy optimization (scopes 1 and 2): improving the energy efficiency of buildings and processes, and switching to renewable energy sources.
- Supply chain engagement (scope 3): Collaborate with suppliers to reduce their carbon footprint, review purchasing criteria, and optimize logistics.
- Eco-design: Rethink products and services to reduce their impact throughout their lifecycle.
- Circular economy: Develop economic models that promote the reuse, repair, and recycling of materials.
What is the recommended frequency for updating the GHG inventory according to the GHG Protocol?
The GHG Protocol recommends regular updates to the GHG inventory:
- Annual frequency: The ideal is to conduct a GHG inventory each year, in line with financial reporting. This frequency allows for precise tracking of the decarbonization trajectory and facilitates communication with stakeholders.
- Reference year: It is advisable to define a reference year to measure the progress made. This reference year must be recalculated in case of significant structural changes (acquisitions, divestments, methodological changes).
- External verification: To ensure the credibility of the balance sheet, verification by an independent third party is recommended, particularly for companies subject to reporting obligations.
- Methodological review: Beyond updating the data, it is important to periodically re-evaluate (every 3 to 5 years) the scope of the balance sheet and the methodologies used to ensure they remain relevant.
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