The GHG Protocol is the internationally recognised emissions reporting standard for business carbon accounting.
Scope 1, 2, and 3 emissions
Scope 1: direct emissions from owned or controlled sources.
Scope 2: indirect emissions from the generation of purchased energy.
Scope 3: all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.
The GHG Protocol Standards
There are two separate standards addressing different aspects of an organisation:
- The GHG Protocol Corporate Value Chain (Scope 3) Standard accounts for corporate level emissions and pinpoints emission reduction opportunities, track performance, and engage suppliers at a corporate level.
- GHG Protocol Product Standard accounts for individual product emissions. These refers to ‘cradle to grave’ emissions, i.e. all emissions from the production including raw materials, to use, transportation, storage, and disposal of the product.
Both account for a value chain or life cycle approach to emissions accounting. The above alongside the GHG Protocol Corporate Standard provide a comprehensive approach to GHG measurement and management.
Accounting for value chain and product emissions is vital, as it takes into account all operations of the business. Value chain emissions can typically represent the largest portion of a company’s overall emissions, therefore it is vital to pinpoint these in order to improve.
Value chain and product emissions inventories are beneficial as they allow organisations to:
- Help pinpoint risks and opportunities
- Monitor emissions, and set targets for reduction opportunities
- Improve transparency and reputation via reporting publicly
- Allow suppliers and other nodes along the value chain to engage
- Identify product life cycle hotspots
- Implement cost effective solutions for emission reduction
The GHG Protocol standards only address GHG emissions and not environmental impacts per se – however these cover a range of different aspects that can be mirrored with environmental impacts generally. The Corporate Value Chain (Scope 3) Standard also allows a company for year on year/ historical comparison.
Addressing total Scope 1,2 and 3 emissions will allow an organisation to manage their key impacts across the value chain. Although use of the new standard is voluntary, it is a great way for businesses to think strategically about their emissions and impacts, and base their strategy on facts. The standard is recognised globally, as climate change is a global problem and businesses operate on global levels across their value chains.
If you’d like to know more about GHG accounting, contact us.