GHG Protocol Corporate Standard and Scope 3 Guidance

The GHG Protocol Corporate Standard and Scope 3 Guidance together provide a comprehensive framework for organizations to measure and manage their greenhouse gas emissions across their entire value chain.

Organizational BoundaryScope 1Direct EmissionsScope 2Purchased EnergyScope 3UpstreamScope 3DownstreamValue Chain

Corporate Standard Overview

The GHG Protocol Corporate Standard provides requirements and guidance for companies preparing a corporate-level GHG emissions inventory. It covers accounting and reporting principles, setting organizational boundaries, and establishing operational boundaries.

Key Principles

Relevance: Ensure the inventory appropriately reflects emissions and serves decision-making needs
Completeness: Account for and report all GHG emission sources and activities within chosen boundaries
Consistency: Use consistent methodologies to allow meaningful comparisons over time
Transparency: Address all relevant issues factually and coherently
Accuracy: Ensure calculations are systematically neither over nor under actual emissions

Organizational Boundaries

Companies must choose an approach for consolidating GHG emissions:

Equity Share: Account for GHG emissions based on share of equity in operations
Financial Control: Account for GHG emissions from operations over which the company has financial control
Operational Control: Account for GHG emissions from operations over which the company has operational control

Example: Organizational Boundary Setting

A company owns:

Manufacturing facility (100% ownership)
Joint venture facility (40% ownership)
Leased warehouse (operational control)

Under different approaches:

Equity Share: 100% of facility 1 emissions + 40% of facility 2 emissions
Operational Control: 100% of facility 1 and warehouse emissions

Scope 3 Guidance

The Scope 3 Standard provides requirements and guidance for accounting and reporting value chain emissions. It complements and builds upon the Corporate Standard.

Scope 3 Categories

Upstream Categories	Downstream Categories
Purchased goods and services Capital goods Fuel and energy-related activities Upstream transportation and distribution Waste generated in operations Business travel Employee commuting Upstream leased assets	Downstream transportation and distribution Processing of sold products Use of sold products End-of-life treatment of sold products Downstream leased assets Franchises Investments

Upstream

Calculation Requirements

For each Scope 3 category:

Identify relevant activities
Select calculation method:
- Supplier-specific method
- Average-data method
- Spend-based method
- Hybrid method
Collect activity data
Select emission factors
Calculate emissions

Example: Calculating Category 1 Emissions

For purchased goods using spend-based method:

Annual spend on steel: $1,000,000
Emission factor: 3 kg CO₂e/$
Calculation: $1,000,000 × 3 kg CO₂e/$ = 3,000,000 kg CO₂e

Implementation Guidance

Setting Boundaries

Define clear organizational and operational boundaries
Document boundary decisions and rationale
Maintain consistency across reporting periods
Consider industry guidance and sector supplements

Data Collection and Quality

Develop data collection procedures
Establish quality control processes
Document data sources and assumptions
Assess and improve data quality over time

Reporting Requirements

Required information includes:

Description of the company and inventory boundary
Information on emissions by scope
Base year emissions data and recalculation policy
Description of methodologies and emission factors
Information on optional information and exclusions

Best Practices:

Start with screening to identify significant categories
Focus on data quality for material emissions sources
Document assumptions and methodologies clearly
Engage suppliers and value chain partners
Review and update calculations regularly