Greenhouse Gas Protocol explained
Climate change is one of the biggest challenges of our times, and it is happening right now. Temperatures are rising, drought and wildfires are occurring more frequently and global sea levels are rising. Climate change is triggered by rising temperature, caused by greenhouse gas (GHG) emissions. The Greenhouse Gas Protocol was established in 1998 to create standards for organisations on how to account for these emissions. In this article, we will explain what standards are included and how you should interpret them
PUBLISHED: 28 July 2022
WRITTEN BY: Gijs de Mol
Table of contents
What is the Greenhouse Gas (GHG) Protocol?
The GHG Protocol is an organisation formed through a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). They are best known for their classifications of emissions into scope 1, 2 and 3, which we will discuss later. The objective of the GHG Protocol, is to provide standards and frameworks for organisations to report and account for their GHG emissions. These are sum of various gases that have a negative impact on climate change, such as carbon dioxide, methane and nitrous oxide. The collection of standards will help companies to thoroughly understand their climate impacts, which will help companies to create robust climate strategies, allowing them to make environmental claims to stakeholders.
Why would you use the GHG Protocol?
The GHG Protocol supplies the world’s most widely used standards for greenhouse gas accounting. In fact, 9 out of 10 Fortune 500 companies used the GHG Protocol directly or indirectly. Different standards have been established in order to meet the requirements of every company, regardless of their mission or goal. In the next sections we will elaborate in more detail on the standards that were specifically drawn up for companies and organisations.
This standard is designed to support companies in compiling a GHG inventory that gives a true picture of their emissions through the use of standardised approaches and principles. It will help companies to gain more insight into where most carbon emissions are emitted. Moreover, by using the standard, you will increase the consistency and transparency of your GHG accounting and reporting, which is good for credibility.
Corporate Value Chain (Scope 3) Standard
Until recently, companies left the life cycle emissions of products – the value chain (scope 3) – completely out of the equation. They only focused on their own operations and electricity consumption. However, this is starting to change, as awareness of the importance of scope 3 is increasing. This guide helps you to divide scope 3 into 15 large chunks, both upstream and downstream. This has increased the quality of the carbon accounting and reporting of the scope 3 emissions significantly.
This standard can be used to understand the full life cycle emissions of a product and focus efforts on the greatest GHG reduction opportunities. It is structured according to the life cycle phases of Life Cycle Assessment (LCA), namely raw materials, manufacturing, transportation, storage, use and disposal. Therefore, this standard is essentially a derivative version of LCA that solely focuses on GHG emissions.
What are the GHG Protocol scopes?
Scope 1: direct emissions
Scope 2: indirect emissions - owned
Scope 3: indirect emissions - not owned
Now it becomes interesting, because scope 3 emissions represent the holy grail of emissions. According to the Global Supply Chain Report 2020 from the CDP (Carbon Disclosure Project), organisations’ supply chain emissions account for more than 90% of their GHG emissions, when taking into account their overall climate impacts. The emissions are divided into upstream and downstream emissions.
Upstream emissions are generated by the purchase of goods and services, capital goods, fuel and energy-related activities, inbound transport and distribution, waste generated by business activities, business trips, employee commuting and leased assets.
Downstream emissions are generated by the outbound transportation and distribution, processing of sold products, use of sold products, end of life treatment of sold products, leased assets, franchised and investments.
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