What is the GHG Protocol?

Oskar Dahl Hansen

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Learn about the most common method for calculating CO2e emissions and an important foundation for your climate action.

If you've ever tried to calculate your company's carbon footprint, you may have heard of the GHG Protocol and scope 1, 2 & 3. It is the most common method for calculating CO2e emissions and is an important foundation for your climate action as a business.

The GHG Protocol is a collaboration between a number of organizations that ensures a streamlined methodology for calculating CO2e emissions across companies, governments and products.

What is scope 1, 2 and 3?

The core of the standard is the three scopes. According to the GHG Protocol, a company's CO2e emissions can all be categorized into scope 1, 2 or 3.

Scopes 1 and 2 are mandatory when using the standard, while scope 3 is the most difficult to measure and is voluntary - however, it is also where the vast majority of CO2e emissions are located. Therefore, it is commonly believed that you can't use scope 1 and 2 alone to say anything about a company's carbon footprint.

Scope 1, 2 and 3 explained

Scope 1

Emissions directly from the company

Scope 1 refers to direct greenhouse gas emissions from sources owned or controlled by the company. This includes emissions from the following sources:

  • Stationary combustion sources: Combustion of fossil fuels in company-owned or controlled boilers, furnaces, turbines, etc.
  • Mobile combustion sources: Combustion of fossil fuels in company-owned or controlled vehicles such as cars, trucks, airplanes, etc.
  • Process-related emissions: Emissions from physical or chemical processes, such as the production of cement, steel, aluminum and chemicals.
  • Fugitive emissions: Accidental releases of greenhouse gases from equipment, such as leaks from refrigeration systems, air conditioning systems, ventilation systems and gas pipelines.

Simply put, scope 1 emissions are all the direct emissions that originate from sources over which the company has full control.

Scope 2

Emissions one step away from the business

Scope 2 refers to indirect greenhouse gas emissions from the purchased electricity, steam, heating and cooling that the company consumes. These emissions occur at the energy producer, but they are included in the company's total emissions because they are a result of the company's energy consumption.

Key points about scope 2 emissions:

  • Purchased electricity: Includes all emissions from the production of electricity that the company buys and uses. This is typically the largest part of Scope 2 emissions.
  • Purchased steam, heating and cooling: Includes emissions from the production of steam, heating and cooling that the company purchases and uses in its facilities.

Scope 3

All the other emissions

Scope 3 includes all other indirect greenhouse gas emissions that occur in the company's value chain, both upstream and downstream. These emissions are a result of the company's activities, but arise from sources that the company neither owns nor controls directly.

Scope 3 is by far the most difficult category to calculate. However, it is also often the most important, as many companies will find a large part of their CO2 emissions in scope 3.

Scope 3 can be divided into 15 categories covering the entire value chain:

Upstream emissions (before the product reaches the company):

  • Purchased goods and services: Emissions from the production of goods and services purchased by the company.
  • Capital goods: Emissions from the production of fixed assets such as buildings, machinery and equipment.
  • Fuel and energy related activities (not included in scope 1 or 2): Emissions from the production of fuel and energy purchased by the company.
  • Transportation and distribution (upstream): Emissions from transportation and distribution of purchased goods and raw materials.
  • Waste from operations: Emissions from the disposal and treatment of waste produced by the company.
  • Business travel: Emissions from transportation of employees for business purposes.
  • Employee commuting: Emissions from employees commuting to and from work.
  • Leased assets (upstream): Emissions from the operation of assets that the company leases.

Downstream emissions (after the product leaves the company):

  • Transportation and distribution (downstream): Emissions from transportation and distribution of the company's products.
  • Processing of products sold: Emissions from processing products sold to customers.
  • Use of products sold: Emissions from the use of the company's products sold.
  • End-of-life treatment of products: Emissions from end-of-life treatment of products at the end of their lifetime.
  • Leased assets (downstream): Emissions from the operation of assets that the company has leased out.
  • Franchise businesses: Emissions from the operation of franchise businesses.
  • Investments: Emissions from investments made by the company.

Get concrete CO2 reduction tips for each category in scope 1, 2 and 3.

Example of a climate report divided into scope 1, 2 and 3

Below you can try a demo of the Climaider tool. In the demo, you can see what a GHG Protocol compliant climate report looks like and how it can be used to meet your company's climate accounting and reporting needs.

Get started with your climate accounting

We've helped companies with everything from carbon accounting and ESG reporting to reduction strategy and carbon offsetting. If you'd like a no-obligation chat about how we can help meet your needs, book a meeting here.

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GHG Protocol