The GHG Protocol explained for non-scientists

What is the GHG Protocol?

The GHG Protocol Corporate Accounting and Reporting Standard is the world's most widely used greenhouse gas accounting framework. Developed jointly by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it was first published in 2001 and has since become the foundation on which virtually every other framework is built — CSRD's ESRS, the CDP, the SBTi, and the TCFD all defer to it.

If you're reporting emissions under any major framework, you are almost certainly using GHG Protocol methodology, whether you know it or not. Understanding its structure helps you understand why every framework asks for the same three numbers: Scope 1, Scope 2, and Scope 3.

Scope 1: direct emissions

Scope 1 covers all greenhouse gas emissions from sources your organisation owns or directly controls. There are four source types: stationary combustion (boilers, furnaces, and generators at your facilities), mobile combustion (company-owned vehicles, forklifts, and aircraft), process emissions (industrial processes that release GHGs as a by-product — cement kilns, chemical reactors, refrigerant systems), and fugitive emissions (unintentional releases from equipment or storage, particularly relevant in oil and gas and HVAC).

Scope 1 is typically the easiest scope to measure because you have direct access to the sources. Fuel purchase records and utility bills provide a reliable starting point, and process-level metering is achievable for all major source categories.

Scope 2: purchased electricity

Scope 2 covers indirect emissions from the generation of electricity, steam, heat, or cooling you purchase but don't produce. The emissions physically occur at the power plant, but they are attributed to you as the purchaser.

The GHG Protocol defines two Scope 2 accounting methods. The location-based method uses average grid emission factors for your region. The market-based method uses emission factors from your specific electricity contracts — renewable energy certificates (RECs), power purchase agreements (PPAs), or supplier-specific factors.

For CSRD and CDP disclosure, both methods are required. The difference between them tells stakeholders whether your renewable electricity claims reflect real additionality or are based on grid-average accounting.

Scope 3: the value chain

Scope 3 covers all other indirect emissions in your value chain — everything upstream from suppliers and downstream from customers using your products. This typically represents 70–90% of a company's total footprint.

The GHG Protocol organises Scope 3 into 15 categories, split between upstream (1–8) and downstream (9–15). Each has its own measurement guidance covering purchased goods, business travel, use of sold products, and investments. For most companies, just three categories account for the majority of total Scope 3 emissions.

Scope 3 reporting is voluntary under the original GHG Protocol standard but mandatory under CSRD's ESRS E1 and required for SBTi validation. The direction of travel is clear: Scope 3 is rapidly becoming the default expectation for serious ESG disclosure.

Why the GHG Protocol is the foundation of everything

Every major reporting framework defers to GHG Protocol methodology for emissions accounting. ESRS E1 mandates it explicitly. The CDP questionnaire is structured around it. SBTi validation requires GHG Protocol-aligned baselines. Even voluntary frameworks like the VCMI and PCAF build on it.

For your finance team, think of the GHG Protocol like IFRS for financial reporting: it's the accounting standard that makes different companies' disclosures comparable. Without it, a Scope 3 number from Company A and Company B would be impossible to compare because they might use different boundary definitions or methodologies for the same categories.

Mastering the GHG Protocol structure — even at a conceptual level — is the single most valuable investment a sustainability or finance professional can make. Everything else in ESG reporting follows from it.