The Greenhouse Gas Protocol (GHG Protocol) serves as a global standard for measuring and managing greenhouse gas emissions. It was established in 1990 to meet the demand for a consistent framework for greenhouse gas reporting, the GHG Protocol focuses on three major gases: carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O).
Today, the GHG Protocol collaborates with governments, industry associations, NGOs, corporations, and other organizations to provide widely adopted emission calculation guidelines. Nations and businesses committed to the Paris Agreement are obligated to reduce their greenhouse gas emissions. They do so by tracking, reporting, and mitigating emissions according to criteria like those outlined in the GHG Protocol. In this blog, we’ll explore the significance of the GHG Protocol and organization compliance.
Who Can Use the GHG Protocol?
1. Enterprises: Regardless of whether they are publicly traded or privately owned, companies of varying sizes and industries are encouraged to embrace the GHG Protocol for emissions management. Notably, in 2016, 92% of Fortune 500 companies directly or indirectly employed it, establishing it as the cornerstone of most global corporate GHG reporting programs.
2. Government Bodies: Government entities at the national, regional, and local levels can leverage the GHG Protocol for emissions monitoring and reporting. This plays a pivotal role in shaping emissions reduction policies and aligning with global climate targets.
3. Suppliers: Given the escalating significance of sustainability and ESG regulations, many larger businesses and organizations mandate that their suppliers and collaborators disclose their emissions, expanding the reach of the GHG Protocol throughout the supply chain.
4. Nonprofits: Non-governmental organizations, not-for-profits, and philanthropic institutions can deploy the GHG Protocol to evaluate their emissions and champion sustainable practices.
5. Investors: Investors and financial institutions can utilize the GHG Protocol to appraise the environmental performance and risk exposure of the companies in which they invest or extend loans.
6. Urban Centers: Metropolitan areas can employ the GHG Protocol to assess and govern emissions stemming from various sources within their confines, encompassing transportation, structures, and waste management.
7. Educational and Research Institutions: Universities and research bodies can utilize the GHG Protocol to investigate emissions trends, gauge policy effectiveness, and contribute to a more profound understanding of issues related to climate change.
GHG Protocol standards
1. Corporate Emission Tracking
The GHG Protocol Corporate Accounting and Reporting Standard offers a framework for businesses and diverse organizations, including NGOs, government entities, and universities, to assess their greenhouse gas emissions. It encompasses direct and indirect emissions (known as Scope 1, 2, and 3) and serves as the foundation for Plan A’s Corporate Carbon Footprint tool.
2. Emission Reduction Goals
The GHG Protocol Mitigation Goal Standard provides guidance to countries and cities in formulating national and subnational emission reduction objectives, along with a standardized approach for tracking and reporting progress at various levels.
3. Value Chain Analysis
The Corporate Value Chain (Scope 3) Standard aids companies and organizations in evaluating the emissions impact of their complete value chain, assisting in the identification of areas where carbon emissions can be reduced.
4. Urban Emissions Assessment
The Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC) provides cities and local communities with a robust structure for monitoring and disclosing city-wide greenhouse gas emissions.
5. Product Lifecycle Assessment
The Product Standard allows companies and organizations to grasp the full emissions impact throughout a product’s lifecycle, enabling a focus on the most impactful opportunities for reducing greenhouse gases. This step is often vital when transitioning to sustainable products.
6. Project Emission Calculation
The GHG Protocol for Project Accounting is a comprehensive, policy-neutral tool adopted by diverse climate change stakeholders for quantifying the greenhouse gas benefits of climate change mitigation projects.
7. Policy and Action Impact
The GHG Protocol Policy and Action Standard is particularly suited for countries and cities, offering a uniform methodology to estimate the greenhouse gas effects of policies and actions.
What are scopes 1, 2 and 3 in the Greenhouse Gas Protocol?
The Greenhouse Gas Protocol incorporates six greenhouse gases – carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) when calculating a company’s emissions. These emissions are then categorized into three scopes: scope 1, 2, and 3. Scope 1 and 2 are obligatory for reporting, while Scope 3 is voluntary and often presents the most complex challenges. Nevertheless, companies that successfully report on all three scopes can secure a sustainable competitive edge and ensure compliance with forthcoming regulations like the Corporate Sustainability Reporting Directive (CSRD).
Scope 1
Scope 1 emissions encompass direct emissions originating from resources under the company’s control and ownership. In essence, they are emissions released directly into the atmosphere as a result of the company’s activities. Examples of Scope 1 emissions include emissions from company-owned fossil-fuel power plants,on-site combustion, and emissions produced by company fleets.
Scope 2
Scope 2 emissions involve indirect emissions stemming from the generation of purchased energy from utility providers. These emissions encompass all greenhouse gases released into the atmosphere as a consequence of consuming purchased electricity, cooling, heat and steam.
Scope 3
Also known as value chain emissions, Scope 3 emissions comprise all the indirect emissions occurring within the reporting company’s upstream and downstream supply chain. As outlined by the GHG Protocol, Scope 3 emissions are further categorized into 15 distinct categories, which include aspects like waste disposal, business travel, and purchased goods and services.
Five Essential Principles of GHG Protocol Compliance for Businesses
Every business must adhere to five fundamental principles of the GHG Protocol to ensure accurate and meaningful greenhouse gas emissions reporting. These principles serve as the cornerstone of responsible emissions management.
1. Relevance
Organizations are obligated to align their GHG inventory accounting methods and reports with the decision-making requirements of both internal and external stakeholders. The information presented must be readily comprehensible to the intended users.
2. Consistency
Upholding the GHG Protocol necessitates the consistent application of methodologies, data, and assumptions to facilitate meaningful comparisons of GHG inventories over time. Any alterations in data, inventory boundaries, methods, or other relevant elements must be meticulously documented.
3. Completeness
Businesses must meticulously account for and report on all sources and activities contributing to GHG emissions within defined boundaries. Additionally, any noteworthy exclusions of GHG emissions or removals require disclosure and justification.
5. Transparency
Organizations are expected to address pertinent issues transparently, based on a clear audit trail. This entails disclosing underlying assumptions, referencing data sources, and elucidating accounting and calculation methodologies for enhanced transparency.
6. Accuracy
Systematic precision is pivotal in GHG emissions quantification. Businesses must ensure their reported emissions align closely with actual emissions, minimizing uncertainties. The information presented must provide stakeholders with the confidence to make informed decisions regarding the reliability of the data.
The Paris Agreement and Greenhouse Gas (GHG) Protocols.
Both the Paris Agreement and GHG Protocols share the common goal of mitigating climate change by reducing greenhouse gas emissions. They aim to limit global warming to well below 2 degrees Celsius above pre-industrial levels and pursue efforts to limit it to 1.5 degrees Celsius. While the Paris Agreement sets the overarching framework and goals for countries, GHG Protocols provide the tools and standards for measuring and reporting emissions accurately, helping to achieve the targets set under the agreement.
Conclusion
Embracing GHG Protocol-compliant carbon reduction technology not only ensures regulatory compliance but also bolsters climate risk management and trims carbon-related expenses. By harnessing the capabilities of climate technology, 0xcarbon guarantees vital alignment with the GHG Protocol. Our solutions empower businesses to make precise emissions comparisons across all scopes and facilities, establish industry benchmarks, and promptly address emissions hotspots.
What about 0xcarbon?
0xcarbon, a rapidly growing climate technology provider, equips industries, farmers, and climate-focused organizations with the tools and data required to make sustainable decisions, ultimately advancing toward net-zero objectives.
Contact our team of experts today and seize control of your decarbonization journey.
