GHG Protocol: What is the Greenhouse Gas Protocol?

Long confined to voluntary CSR initiatives, the measurement of greenhouse gas emissions is becoming a regulatory requirement for tens of thousands of companies worldwide. Whether in Europe with the CSRD directive, or through the new international financial reporting standards (IFRS), organizations are now required to provide precise accounts of their climate impact.

To navigate this regulatory complexity, there is a universal compass: the GHG Protocol. This standard defines the global rules of the game. But concretely, what is it? Which gases are included, and how can one navigate scopes 1, 2, and 3? Here is an analysis of the essential methodology for steering a climate strategy.

What is the GHG Protocol?

The GHG Protocol (Greenhouse Gas Protocol) was established in the early 2000s by the American think tank WRI (World Resources Institute) and the WBCSD (World Business Council for Sustainable Development), a coalition of approximately 200 international companies committed to sustainable development.

This protocol provides economic players worldwide with the tools and standards to measure, report, and strive to reduce their greenhouse gas emissions. The GHG Protocol meets the critical need for a harmonized GHG accounting standard. To develop it, both organizations collaborated with major environmental groups such as the Pew Center on Climate Change (now C2ES) and the WWF.

It is one of the oldest international standards dedicated to carbon footprints and remains one of the most widely used. The GHG Protocol defines not only a method for accounting for GHG emissions but also a framework for communicating the results.

The Greenhouse Gas Protocol now accounts for the seven main greenhouse gases generated by human activity:

• CO2 – Carbon dioxide, primarily emitted from fossil fuel combustion, agriculture, and deforestation.

• CH4 – Methane, mainly generated by livestock, agriculture, and waste.

• N2O – Nitrous oxide, used in industry and agriculture.

• HFCs – Hydrofluorocarbons (refrigerant gases).

• PFCs – Perfluorocarbons.

• SF6 – Sulfur hexafluoride (used in the electrical industry).

• NF3 – Nitrogen trifluoride, used extensively in the manufacturing of screens and semiconductors.

More recent international standards, such as ISO 14064 (created in 2006), are based on the GHG Protocol’s carbon accounting methodology. The latter introduced the requirement for third-party verification of carbon accounts..

What are the goals of the GHG Protocol?

The GHG Protocol addresses a crucial challenge in the goal of reducing greenhouse gas emissions: creating a common framework for comparing and tracking the evolution of extra-financial reporting emissions. The protocol was designed with 6 objectives in mind:

• Creating global standardized calculation and reporting standards

• Preparing a relevant and comprehensive inventory of GHG emissions

• Simplifying and reducing the cost of inventorying

• Producing key indicators for building an effective GHG reduction strategy

• Facilitating the engagement of companies in voluntary GHG projects

• Improving the transparency and relevance of carbon reporting through a fixed methodology and accurate data.

The GHG Protocol and the scopes 1, 2 and 3

Originally, the GHG Protocol's method of accounting for greenhouse gases was divided into two parts called scopes:

• Scope 1 concerns direct emissions of greenhouse gases from the consumption of carbon products in the company's activities, i.e. fuel for vehicles and machinery, refrigerant gases for air conditioners and cold rooms, and fuel oil and gas for heating.

• Scope 2 concerns all emissions related to energy consumption (electricity)

In 2011, an amendment to the protocol added a third category composed of indirect emissions necessary for the operation of the company:

• Scope 3 therefore covers all other emissions, which are largely the majority, and include the purchase and transport of raw materials and services, employees' home-work travel, financial investments, as well as the use of sold products and waste treatment at the end of the product's life cycle.

Until now optional in France, the scope 3 will become mandatory from January 1, 2023 for companies with more than 500 employees, like scopes 1 and 2. This follows the publication of the Decree on the carbon footprint of greenhouse gas emissions on July 1, 2022.

The GHG Protocol methodology

The GHG Protocol's method of calculating carbon emissions is based on four main steps:

• Defining the organizational, operational and temporal perimeter of the study: i.e. the organization concerned, the activities taken into account (scopes 1, 2 and 3), the GHGs measured and the reference year.

• Calculating the emissions of different greenhouse gases expressed in a common unit of measure, CO2e, i.e. CO2 equivalent (which is why we can generally speak of carbon accounting).

• Controlling the reliability and quality of the results, which involves calculating uncertainties. This control can be carried out by a third party (optional under the GHG protocol, but mandatory to meet the ISO 14064 standard).

• Interpreting the results, with the definition of reduction targets and possibly an action plan.

GHG Protocol 2027: Towards a new standard for Scope 2 emissions reporting?

In light of the rapid evolution of power grids and renewable energy, the current 2015 Scope 2 guidance is reaching its limits. To address this, the GHG Protocol has launched a major modernization project for this standard, aiming to better align carbon accounting with the physical reality of energy flows. At the heart of the discussions is the potential shift away from annual averages in favor of "hourly matching." This method would require companies to prove that their green electricity consumption (Scope 2) matches real renewable production on an hourly and geographical basis.

The process is underway: an initial public consultation is open until January 31, 2026, to gather market feedback. This will be followed by a second consultation phase later in 2026, with the final goal of publishing the new definitive standard in 2027.

Conclusion

The GHG Protocol was developed in a context of a climate emergency: the greenhouse gas emissions generated by our production and consumption modes are directly linked to the phenomenon of global warming and critical climate disruption. The GHG protocol is the basis for the mandatory carbon footprint declarations of the largest companies, and also serves as the basis for many standards and labels governing sustainable development and CSR commitments. Its standards are therefore valuable tools for obtaining ISO 14001, ISO 14064 and ISO 9001 certification, or one of the CSR labels based on the ISO 26000 standard.