1.1 Development of the GHG Protocol | DART – Deloitte Accounting Research Tool

The GHG Protocol was developed through a multistakeholder partnership of businesses, nongovernmental organizations (NGOs), governments, and other entities convened by the World Resources Institute (WRI), a U.S.-based environmental NGO, and the World Business Council for Sustainable Development (WBCSD), a Geneva-based coalition of nearly 200 international companies. Throughout this Roadmap, the following standards and related guidance will be referred to collectively as the GHG Protocol:

The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (the “Corporate Standard”), first issued in 2001 and revised in 2004.
GHG Protocol Scope 2 Guidance: An Amendment to the GHG Protocol Corporate Standard (the “Scope 2 Guidance”), issued in 2015.
Corporate Value Chain (Scope 3) Accounting and Reporting Standard: Supplement to the GHG Protocol Corporate Accounting and Reporting Standard (the “Scope 3 Standard”), issued in 2011.
Technical Guidance for Calculating Scope 3 Emissions (Version 1.0): Supplement to the Corporate Value Chain (Scope 3) Accounting & Reporting Standard (the “Scope 3 Technical Guidance”), issued in 2013.
Accounting and Reporting Standard Amendment: Required Greenhouse Gases in Inventories (the “Required GHGs Amendment”), issued in 2013.
The GHG Protocol for Project Accounting (the “Project Protocol”), issued in 2005.
Product Life Cycle Accounting and Reporting Standard (the “Product Standard”), issued in 2011.

The Corporate Standard provides a framework for companies and other types of organizations preparing a GHG emission inventory. For example, it establishes a base year of GHG emissions with which to compare current reported inventory and activity. Specifically, it addresses the accounting for and reporting of the seven GHGs currently covered by the United Nations Framework Convention on Climate Change (UNFCCC)/Kyoto Protocol: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).1 Its stated objectives are as follows:

“To help companies prepare a GHG inventory that represents a true and fair account of their emissions, through the use of standardized approaches and principles.”
“To simplify and reduce the costs of compiling a GHG inventory.”
“To provide business with information that can be used to build an effective strategy to manage and reduce GHG emissions.”
“To provide information that facilitates participation in voluntary and mandatory GHG programs” (i.e., reporting regimes).
“To increase consistency and transparency in GHG accounting and reporting among various companies and GHG programs.”

As the Corporate Standard notes, a common standard can help business and nonbusiness entities alike. For businesses, a common standard provides a universal reporting framework for preparing GHG inventory statements that can be used both internally and externally. For other entities, as stated in the Corporate Standard, a common standard “improves the consistency, transparency, and understandability of reported information, making it easier to track and compare progress over time.”

The Scope 2 Guidance notes that it “acts as an amendment to the Corporate Standard, providing updated requirements and best practices [as of the issuance date of the Scope 2 Guidance] on scope 2 accounting and reporting.” In addition, the Scope 2 Guidance states that it “introduces accounting and reporting requirements related to scope 2 that replace and add to those in the Corporate Standard.” It emphasizes that “[t]o prepare an inventory in conformance with the Corporate Standard, companies shall follow all [of the additional] requirements” in the Scope 2 Guidance.

As its full title indicates, the Scope 3 Standard is a supplement to the Corporate Standard. The Scope 3 Standard explains that it “complements and builds upon the Corporate Standard to promote additional completeness and consistency in the way companies account for and report on indirect emissions from value chain activities.” Supplementing the Scope 3 Standard is the Scope 3 Technical Guidance, which discusses how to calculate emissions for each of the Scope 3 categories.

Construction Ahead

As of this Roadmap’s issuance in January 2024, the WRI and WBCSD are seeking input from stakeholders as part of an initiative to update the standards and guidance in the GHG Protocol.