GHG Protocol: Definition

The Greenhouse Gas (GHG) Protocol is the global standard for measuring and reporting greenhouse gas emissions. It was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), and most corporate carbon footprints, CDP responses and climate disclosures are built on it.

The standards that matter for most companies

• Corporate Standard: sets how to draw your organisational boundary (equity share, financial control or operational control) and defines Scope 1 (direct) and Scope 2 (purchased energy) emissions.
• Scope 2 Guidance: requires both a location-based figure (grid average) and a market-based figure (reflecting contracts such as renewable energy certificates).
• Corporate Value Chain (Scope 3) Standard: splits indirect value-chain emissions into 15 categories, from purchased goods to the use of sold products.

Why it matters in Australia

AASB S2 requires Scope 1, 2 and 3 emissions to be measured in line with the GHG Protocol Corporate Standard, while allowing Australian entities to use methods under the NGER scheme where they apply. Getting the boundary choice right, and documenting it, is one of the first things an assurance provider will review.

It is changing

The GHG Protocol is revising its standards, with the Scope 2 rules for market-based accounting the most debated change. Keep your methodology notes current so a future restatement is straightforward.