If you manage ESG or sustainability inside a company, you’ve probably noticed the acronym soup getting dense:
CSRD, SBTi, ISO standards, and procurement tools like the CO₂ Performance Ladder.
Beneath all of them runs a single shared language for measuring climate impact: the
Greenhouse Gas (GHG) Protocol.

Created by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD),
the GHG Protocol has become the world’s most used framework for calculating and reporting emissions—
voluntarily and, increasingly, by regulation. The GHG Protocol standardises how organisations define boundaries,
collect data, apply emission factors, and disclose results transparently and auditable.

This article explains what the GHG Protocol is, how Scopes 1, 2, and 3 actually work in practice, and why getting this right
is now essential for compliance, tender advantage, and investor trust.

From idea to global standard

In the late 1990s, businesses and policy makers realised that credible climate action needed a common accounting system.
Without shared rules, emissions data could not be compared or assured. That insight led to the

GHG Protocol Corporate Accounting and Reporting Standard
,
which introduced the now-familiar three-scope model and set out requirements for building a corporate inventory.

Over time, the framework expanded with a dedicated

Scope 3 Standard

to capture value chain emissions, and a comprehensive

Scope 2 Guidance

for purchased electricity, heat, steam, and cooling. Together, these documents form the backbone of modern carbon accounting.

The three scopes, explained as a management lens

Scope 1 covers direct emissions from sources your organisation owns or controls —
think of fuel burned in company vehicles, natural gas in onsite boilers, or process emissions in manufacturing.
Scope 1 is where operational discipline pays off: metering, maintenance, and efficiency projects deliver immediate,
measurable reductions, especially when paired with electrification plans.

Scope 2 captures indirect emissions from purchased energy.
Because electricity systems vary by geography and market, the Protocol requires dual reporting:
a location-based method using the average grid mix and a market-based method reflecting
your contractual instruments (e.g., supplier-specific emission factors or renewable certificates).

This dual view surfaces different risks and opportunities — from grid transition dynamics to the quality of your energy procurement —
and comes with clear quality criteria that contracts and certificates must meet to count in market-based results.
For many companies, Scope 2 is where procurement and sustainability must work hand in glove.

Scope 3 encompasses everything else across the value chain, upstream and downstream.
The Standard defines fifteen categories, including purchased goods and services, capital goods, transport and distribution,
business travel, employee commuting, use of sold products, end-of-life treatment, and investments.

For most organisations, Scope 3 represents the largest share of emissions. The practical approach is “screen first, then deepen”:
use spend-based or hybrid methods to find hotspots, then progressively replace estimates with supplier-specific data
through engagement and contracts.

Why the GHG Protocol matters now

The Protocol is no longer just voluntary best practice—it’s woven into today’s regulatory and market fabric.
In the EU, the

Corporate Sustainability Reporting Directive (CSRD)

requires climate disclosures aligned to the ESRS standards, which mirror GHG Protocol concepts for Scopes 1–3.

Procurement instruments such as the

CO₂ Performance Ladder

reward bidders who measure and reduce emissions credibly using GHG-consistent footprinting and PDCA-based management systems.
On the assurance side, the widely used

ISO 14064-1

standard provides verification requirements that fit neatly with inventories prepared under the Protocol.

Implementation without losing momentum

Set governance first. Decide how you’ll draw organisational boundaries (equity share, operational control, or financial control),
who owns data quality, and how often you’ll update. Keep the Protocol’s five principles—relevance, completeness, consistency,
transparency, and accuracy—visible in your internal playbook.

Then get the data pipelines flowing. For Scopes 1 and 2, most activity data already sits in finance, facilities, and operations.
For Scope 2, align early with procurement; market-based reporting only holds if contracts meet the quality criteria on tracking,
vintage, geography, and exclusivity. For Scope 3, start with a screening to map hotspots and material categories.

Finally, align disclosure and assurance pathways from day one. If you fall under CSRD, structure your narrative and controls
around ESRS requirements. If tender advantage under the CO₂ Performance Ladder is strategic, map your PDCA cycle
early so external audits don’t turn into fire drills.

From reporting to strategy

Many organisations treat the GHG inventory as an end state. The leaders use it as a strategy tool.
When a manufacturer discovers that 75–85% of its footprint sits in purchased materials and logistics,
the conversation moves to supplier specifications, transport modes, and product design.

Scope 2 provides another strategic lens. Dual reporting is not bureaucracy—it highlights the difference between
structural grid decarbonisation and the quality of your procurement. Consistent methods help you separate
real operational reductions from accounting effects.

What “good” looks like in practice

Mature programmes share patterns. The inventory is owned by the business, not just sustainability teams:
finance validates data; operations and facilities ensure meters and logs are accurate; procurement drives supplier engagement.

Boundary choices and methodologies are published clearly. Results are assured against ISO 14064-1 to strengthen confidence,
and disclosure aligns to frameworks that matter most—CSRD for EU reporting and the CO₂ Performance Ladder for procurement.

The road ahead: updates and alignment

The GHG Protocol is evolving alongside policy. WRI/WBCSD are updating guidance—particularly on Scope 2 and 3—to reflect market developments.
ESRS under CSRD is being refined, and convergence with global standards is improving.

Companies implementing the GHG Protocol rigorously today will adapt faster to refinements tomorrow because their inventories already rest
on recognised principles and transparent methods.

How Ecocharting helps

Implementing the GHG Protocol well requires governance, data discipline, and cross-functional coordination.
The right platform reduces the burden. Ecocharting streamlines data collection across scopes, applies recognised emission factors,
supports Scope 2 dual reporting, and structures disclosures to fit CSRD/ESRS or procurement schemes like the CO₂ Performance Ladder.

Instead of wrestling spreadsheets, ESG managers get audit-ready dashboards and time back to work on supplier engagement
and reduction initiatives.

Ready to turn your inventory into a strategy engine?
Contact Ecocharting
to accelerate your GHG Protocol journey—from baseline measurement to assured reporting and tender-ready documentation.