GHG Protocol explained for businesses
Direct answer
The GHG Protocol is the world's most widely used standard for measuring and reporting greenhouse gas emissions, developed by the World Resources Institute and the World Business Council for Sustainable Development. It divides an organisation's emissions into scope 1, 2 and 3, and forms the accounting basis under reporting frameworks such as the CSRD and the targets of the Science Based Targets initiative.
- Clear definition
- Data-driven assessment
- Risks and opportunities visible
- Practical next steps
GHG Protocol explained: scattered information versus Energy Intelligence
Anyone wanting to report an organisation's emissions runs into a basic question: what exactly counts, and how do you calculate it? Without shared rules, figures from two companies are not comparable. The GHG Protocol was created in the late 1990s to set out those rules. It matters to every business that prepares a carbon footprint, sets climate targets or has to report under the CSRD, from a manufacturer to a facilities provider.
- Scope 1 is direct emissions from an organisation's own sources, scope 2 the emissions of purchased energy, and scope 3 all other emissions in the value chain.
- The Scope 3 Standard distinguishes fifteen categories upstream and downstream; for many companies this is where the largest part of the footprint sits.
- The Scope 2 Guidance asks for two calculations side by side: a location-based and a market-based method.
Insight
Traditional approach
Information is scattered across portals, documents, invoices or separate spreadsheets.
Modern approach
Data, context and interpretation are brought together into a clear decision picture.
Decision-making
Traditional approach
Choices are made based on averages, assumptions or occasional analyses.
Modern approach
Scenarios, KPIs and current measurement data make the trade-off more concrete and repeatable.
Follow-up
Traditional approach
Actions often stay non-committal or disappear into separate reports.
Modern approach
Follow-up actions, monitoring and reporting are linked to the same energy data.
What does the GHG Protocol consist of?
The GHG Protocol is a family of standards, not a single document. Its core is the Corporate Standard from 2001, which sets out how an organisation compiles its emissions inventory and divides it into scope 1, 2 and 3. Around it sit further standards that work out specific parts. The Scope 2 Guidance addresses the emissions of purchased electricity, heat and cold. The Corporate Value Chain Standard, also called the Scope 3 Standard, covers the whole value chain. The Product Standard calculates at the level of a single product. Together they provide a complete way to measure and manage greenhouse gas emissions.
- Corporate Standard: the foundation, with the division into scope 1, 2 and 3.
- Scope 2 Guidance: the emissions of purchased energy, with two calculation methods.
- Scope 3 Standard: the value chain, divided into fifteen categories.
- Product Standard: the emissions across the full life cycle of a product.
What do scope 1, 2 and 3 mean?
The three scopes organise where emissions come from, so that nothing is counted twice. Scope 1 is direct emissions from sources the organisation owns or controls, such as a gas boiler or its own vehicle fleet. Scope 2 is the indirect emissions of energy you purchase and consume, mainly electricity, heat and cold. Scope 3 covers all other indirect emissions in the value chain: purchased goods and services, transport, use of sold products and waste treatment. For this the Scope 3 Standard distinguishes fifteen categories, upstream and downstream. For many companies the largest part of the total footprint sits precisely in scope 3.
- Scope 1: direct emissions from own sources, such as combustion and own vehicles.
- Scope 2: emissions of purchased electricity, heat and cold.
- Scope 3: all other emissions in the value chain, in fifteen categories.
- Scope 2 is calculated in two ways: location-based and market-based.
Why is it the basis under the CSRD and climate targets?
The GHG Protocol supplies the accounting method that other frameworks build on, rather than inventing one themselves. The CSRD climate standard, ESRS E1, asks for reporting of scope 1, 2 and 3 following the logic of the GHG Protocol, including the dual scope 2 calculation. The Science Based Targets initiative lets companies set targets on that same scope division. So you work out a consistent footprint once and use it for several obligations. Do note the limits: you choose the boundary of your organisation yourself through a consolidation approach, and the quality of your figures depends on the available data. In scope 3 in particular you often work with estimates.
- ESRS E1 of the CSRD follows the scope division and methods of the GHG Protocol.
- The Science Based Targets initiative sets targets on the same scope 1, 2 and 3.
- You choose the boundary of your organisation yourself through a consolidation approach.
- Data quality determines reliability; scope 3 often leans on estimates.
Curious what this looks like with your own data?
In a no-obligation call, a specialist looks at your meters, sites and energy questions with you. Response within one business day.
Search the knowledge base
Find the answer to your question.
Search using your own words. Abbreviations and spelling variants are recognised, so EMS also finds the articles on energy management systems.
Topic
