Chapter 6 — GHG Protocol Scope 3 Standard

6.7 Reporting

Scope 3 Standard, Chapter 11, “Reporting,” Pages 119–121 (Pages 121–123 in E-Reader Version)

A credible GHG emissions report presents information based on the principles of relevance, accuracy, completeness, consistency, and transparency. It should be based on the best data available and be transparent about its limitations. . . .

11.3 Reporting Guidance

By following the GHG Protocol Scope 3 Standard reporting requirements, companies adopt a comprehensive standard with the necessary detail and transparency for credible public reporting. The appropriate level of reporting of optional information categories can be determined by the objectives and intended audience for the report. For national or voluntary GHG programs, or for internal management purposes, reporting requirements may vary.

For public reporting, it is important to differentiate between a summary of a public report that is, for example, published on the internet or in sustainability/corporate social responsibility reporting and a full public report that contains all the necessary data as specified by this standard. Not every circulated report must contain all information as specified by this standard, but a link or reference needs to be made to a publicly available full report where all information is available to be in conformance with the Scope 3 Standard.

Companies should strive to create a report that is as relevant, transparent, accurate, consistent and complete as possible. Including a discussion of the reporting company’s strategy and goals for GHG accounting, any particular challenges or tradeoffs encountered, the context of decisions on boundaries and other accounting parameters, and an analysis of emissions trends will provide a more complete picture of the company’s inventory efforts.

A company’s determination of the information to be included in a reliable emission report is based on the principles of relevance, accuracy, completeness, consistency, and transparency. To give users of the report a more comprehensive understanding of the company’s overall emission efforts, the Scope 3 Standard recommends including in the report a discussion of the company’s strategy and emission goals, any specific challenges or tradeoffs encountered by the company, background of decisions on boundaries and other reporting parameters, and an analysis of emission trends. If any information that would ordinarily be required is excluded from the report because the company has determined that including such information would not meet the above principles, the company needs to be transparent about the exclusion and provide a justification for it in the report.

For optional information, the appropriate level of reporting will vary depending on the report’s intended audience and specific purposes.

In addition, it is important to note that the Scope 3 Standard permits a company to make available (e.g., on the Internet) a summary of its full emission report. Although the summary does not have to include all of the information that the Scope 3 Standard requires, it must include a link or reference to the full emission report that includes all information required under the standard.

6.7.1 Required Reporting

Scope 3 Standard, Chapter 11, “Reporting,” Page 119 (Page 121 in E-Reader Version)

11.1 Required Information

Companies shall publicly report the following information:

A scope 1 and scope 2 emissions report in conformance with the GHG Protocol Corporate Standard
Total scope 3 emissions reported separately by scope 3 category
For each scope 3 category, total emissions of GHGs (CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3)[23] reported in metric tons of CO2 equivalent, excluding biogenic CO2 emissions and independent of any GHG trades, such as purchases, sales, or transfers of offsets or allowances
A list of scope 3 categories and activities included in the inventory
A list of scope 3 categories or activities excluded from the inventory with justification of their exclusion
Once a base year has been established: the year chosen as the scope 3 base year; the rationale for choosing the base year; the base year emissions recalculation policy; scope 3 emissions by category in the base year, consistent with the base year emissions recalculation policy; and appropriate context for any significant emissions changes that triggered base year emissions recalculations
For each scope 3 category, any biogenic CO2 emissions reported separately
For each scope 3 category, a description of the types and sources of data, including activity data, emission factors and GWP values, used to calculate emissions, and a description of the data quality of reported emissions data
For each scope 3 category, a description of the methodologies, allocation methods, and assumptions used to calculate scope 3 emissions
For each scope 3 category, the percentage of emissions calculated using data obtained from suppliers or other value chain partners.

The Scope 3 Standard does not require companies to report their Scope 3 emissions separately by individual gas. Rather it requires them to report aggregated emissions in units of metric tons of CO2 equivalent only. The total emissions must exclude (1) biogenic CO2 emissions and (2) any GHG trades (e.g., purchases, sales, or transfers of offsets or allowances).

Since Scope 3 disclosures require significant estimation, the Scope 3 Standard requires robust disclosure of the calculation methods, allocation methods, and assumptions used to calculate Scope 3 emissions. For example, for Scope 3, Category 11 (use of sold products), the Scope 3 Standard notes that it is important for companies to “report information on average use profiles, assumed product lifetimes and other underlying assumptions” that are used to calculate the emissions. Similar information would be reported for all other Scope 3 categories, as applicable. In addition, it is recommended that companies specify the time boundary for each Scope 3 category (see Sections 6.2.3 and 6.7.2 for more information). Further the Scope 3 Standard requires companies to disclose, for each Scope 3 category, the percentage of emissions calculated on the basis of data obtained from suppliers or other value chain partners so that users of the companies’ emission reports can assess the quality of the reported information.

6.7.2 Optional Reporting

Scope 3 Standard, Chapter 11, “Reporting,” Page 120 (Page 122 in E-Reader Version)

11.2 Optional Information

A public GHG emissions report should include, when applicable, the following additional information:

Emissions data further subdivided where this adds relevance and transparency (e.g., by business unit, facility, country, source type, activity type, etc.)
Emissions data further disaggregated within scope 3 categories where this adds relevance and transparency (e.g., reporting by different types of purchased materials within category 1, or different types of sold products within category 11)
Emissions from scope 3 activities not included in the list of scope 3 categories (e.g., transportation of attendees to conferences/events), reported separately (e.g., in an “other” scope 3 category)
Emissions of GHGs reported in metric tons of each individual gas
Emissions of any GHGs other than CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3,[24] whose 100-year GWP values have been identified by the IPCC to the extent they are emitted in the company’s value chain (e.g., CFCs, HCFCs, NOX, etc.) and a list of any additional GHGs included in the inventory
Historic scope 3 emissions that have previously occurred, reported separately from future scope 3 emissions expected to occur as a result of the reporting company’s activities in the reporting year (e.g., from Waste generated in operations, Use of sold products, End-of-life treatment of sold products)
Qualitative information about emission sources not quantified
Information on any GHG sequestration or removals, reported separately from scope 1, scope 2 and scope 3 emissions
Information on project-based GHG reductions calculated using the project method (e.g., using the GHG Protocol for Project Accounting), reported separately from scope 1, scope 2, and scope 3 emissions
Information on avoided emissions (e.g., from the use of sold products), reported separately from scope 1, scope 2, and scope 3 emissions
Quantitative assessments of data quality
Information on inventory uncertainty (e.g., information on the causes and magnitude of uncertainties in emission estimates) and an outline of policies in place to improve inventory quality
The type of assurance performed (first or third party), the relevant competencies of the assurance provider(s), and the opinion issued by the assurance provider
Relevant performance indicators and intensity ratios
Information on the company’s GHG management and reduction activities, including scope 3 reduction targets, supplier engagement strategies, product GHG reduction initiatives, etc.
Information on supplier/partner engagement and performance
Information on product performance
A description of performance measured against internal and external benchmarks
Information on purchases of GHG reduction instruments, such as emissions allowances and offsets, from outside the inventory boundary
Information on reductions at sources inside the inventory boundary that have been sold/transferred as offsets to a third party
Information on any contractual provisions addressing GHG-related risks or obligations
Information on the causes of emissions changes that did not trigger a scope 3 base year emissions recalculation
GHG emissions data for all years between the scope 3 base year and the reporting year (including details of and reasons for recalculations, if appropriate)
Additional explanations to provide context to the data.

The Scope 3 Standard allows public emission reports to include certain information in addition to what is required, such as:

Information on supplier/partner engagement and performance — Given the interconnectedness of supply chains, companies often engage with suppliers or business partners to reduce Scope 3 emissions. Additional information on supplier/partner engagement activities that may be relevant to users of a company’s public emission report includes the following:
- Engagement metrics, such as the number and percentage of value chain partners:
  - From which the company has requested primary GHG emission data.
  - That provided primary GHG emission data.
  - That publicly disclosed GHG emissions.
  - That established a publicly available GHG reduction target or goal.
- Performance metrics, such as metrics on performance over time. When providing these metrics, a company might include disclosures about its Scope 3 allocation of significant suppliers’ Scope 1 and Scope 2 emissions, the method a supplier used to quantify and allocate emission data, and the percentage of total supplier spend reflected in the metrics (e.g., a disclosure that suppliers representing 75 percent of the company’s total supplier spend have reduced their GHG emissions by 20 percent).
Information on product performance (Scope 3, Category 11) — Use of sold products may represent a significant portion of Scope 3 emissions for certain industries (e.g., automobile manufacturing). In these cases, users of public emission reports may find the following additional information helpful:
- Product performance and intensity measures, such as the average GHG emission intensity, average energy efficiency, and average emissions per measure of use (e.g., hour used, mile driven).
- Annual emissions from the use of sold products. As discussed in Section 6.2.3, in the year a product is sold, a company recognizes Scope 3 emissions related to usage for the entirety of the product’s estimated life. Accordingly, a company may wish to supplementally disclose the estimated emissions from previously sold products that occurred in the current year.
- Average life of products sold.
- Methods and assumptions inherent in any of the above measures or metrics.
- The proportion, such as a percentage, of the company’s products that complies with relevant standards, regulations, or certifications (e.g., energy efficiency standards).
- A description of changes in Category 11 emissions over time.
- Justification for the exclusion of any products from this analysis.
- Other relevant information.
Separate reporting of Scope 3 emissions on the basis of when the emissions occurred or will occur — As discussed in Section 6.2.3, emissions from waste generated, investments made, and products sold have long-term impacts that may occur in future years as a result of certain activities performed in the reporting year. Therefore, the Scope 3 Standard cautions against interpreting Scope 3 emissions in Category 5 (waste generated in operations), Category 11 (use of sold products), and Category 12 (end-of-life treatment of sold products) as “emissions [that] have already occurred” and instead recommends interpreting them as “reported emissions [that] are expected to occur as a result of activities that occurred in the reporting year.” See Table 6-2 for the additional categories of Scope 3 emissions that are expected to occur as a result of activities performed in the reporting year. Accordingly, users of companies’ public emission reports may benefit from separate disclosure of Scope 3 emissions that have already occurred and Scope 3 emissions recognized in the current year that are expected to occur in the future (e.g., from the use of sold products over the products’ lifetime).
Information on inventory uncertainty — The Scope 3 Standard recommends describing the degree of uncertainty of reported qualitative and quantitative data to guarantee transparency and avoid the misunderstanding of emission data. In scenarios in which data uncertainty is high, companies are further encouraged to describe efforts taken to address the uncertainty. See Appendix B of the Scope 3 Standard for more information about uncertainty in Scope 3 emissions.

Footnotes

See footnote 1.