The plain-English explainer

The GHG Protocol and the greenhouse gas inventory

The GHG Protocol is the world standard for corporate carbon accounting. It defines the three scopes, the rules for setting boundaries, and how to build a greenhouse gas inventory. CSRD leans on it directly: ESRS E1-6 requires emissions measured in line with the GHG Protocol. GHG Protocol

TL;DR

  • What: the global carbon-accounting framework from WRI and WBCSD.
  • Key standards: Corporate Standard, Scope 3 Standard, Scope 2 Guidance.
  • Boundaries: pick one approach, equity share, financial control or operational control, and apply it consistently.
  • Inventory: boundaries, base year, activity data, emission factors, calculate, document.
  • CSRD link: ESRS E1-6 requires the GHG Protocol (or ISO 14064-1).
Start your inventoryRead the scopes guide

What the GHG Protocol is

The Greenhouse Gas Protocol is the most widely used carbon-accounting framework in the world, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). It provides the standardised methodology for measuring and reporting corporate greenhouse-gas emissions, and it is the common foundation under CSRD, ISSB and the Science Based Targets initiative. GHG Protocol Corporate Standard

The key standards

The GHG Protocol is a family of standards. The ones that matter most for corporate reporting are:

  • Corporate Accounting and Reporting Standard (the Corporate Standard): defines Scope 1 and 2 and the rules for an organisational inventory.
  • Corporate Value Chain (Scope 3) Standard: the 15 Scope 3 categories.
  • Scope 2 Guidance: the location-based and market-based methods.
  • Plus the Project, Product Life-Cycle and sector-specific standards.

The three scopes, in brief

The GHG Protocol splits emissions into three scopes so they are counted once: Scope 1 is direct emissions from owned or controlled sources; Scope 2 is indirect emissions from purchased energy; and Scope 3 is all other value-chain emissions, usually the largest share. For the full breakdown, including the 15 Scope 3 categories and the two Scope 2 methods, see our Scope 1, 2 and 3 guide. GHG Protocol Scope 2 Guidance

Organisational boundaries: control vs equity

Before you count anything, you decide which operations are yours. The GHG Protocol gives three consolidation approaches; you pick one and apply it consistently across all scopes. The choice matters most for leased assets and joint ventures. EPA, organisational boundaries

Equity share

Account for emissions in proportion to your percentage ownership or economic interest in an operation.

Financial control

Account for 100 percent of operations you financially control, where you can direct financial and operating policies to gain economic benefit.

Operational control

Account for 100 percent of operations where you have authority to introduce and implement operating policies. The most common approach in practice.

The GHG Protocol is mid-revision

The GHG Protocol is being revised. The Phase 1 progress update of December 2025 signals a direction that keeps optionality while potentially eliminating the equity-share approach and retaining operational control as a standalone option. Treat current guidance as the standard until the revision is finalised. We track it in The CSRD Brief. GHG Protocol Phase 1 update

Building a greenhouse gas inventory

A greenhouse gas inventory is a structured account of all the emissions a company is responsible for in a reporting period, the foundational deliverable behind every climate target, CSRD E1-6 disclosure and SBTi submission. Building one follows the GHG Protocol Corporate Standard in seven steps. GHG Protocol Corporate Standard

  1. 1

    Set organisational boundaries

    Choose a consolidation approach (operational control, financial control or equity share) and apply it consistently to decide which subsidiaries, joint ventures, facilities and vehicles are in.

  2. 2

    Set operational boundaries

    Classify emission sources into Scope 1, 2 and 3, and decide which Scope 3 categories are relevant and material.

  3. 3

    Choose a base year

    Pick a representative year (or multi-year average) with good data as the benchmark for tracking progress, and define a base-year recalculation policy to handle structural changes.

  4. 4

    Collect activity data

    Gather the underlying quantities: litres of fuel, kWh of electricity, business-travel km, tonnes purchased, waste tonnage, spend data. Traceability matters for assurance.

  5. 5

    Select emission factors

    Apply credible factors (DEFRA, IEA, EPA, IPCC, EXIOBASE for spend-based Scope 3) to convert activity data into tonnes of CO2 equivalent. Document factor sources and versions.

  6. 6

    Calculate

    Emissions = activity data times emission factor, summed by scope and category. Convert all gases to CO2 equivalent using global warming potential values.

  7. 7

    Quality-check, document, report

    Keep a methodology log and audit trail; report Scope 2 both location-based and market-based. A weak inventory is the most common reason ESRS E1 fails assurance.

ESRS E1-6 explicitly requires GHG emissions to be measured in line with the GHG Protocol (or ISO 14064-1), so the GHG Protocol is effectively the calculation engine behind CSRD climate disclosure. Your inventory directly populates ESRS E1: E1-5 (energy), E1-6 (Scopes 1, 2 and 3), and it underpins E1-4 targets and the E1-1 transition plan. The same inventory also feeds ISSB IFRS S2 and the SBTi. ESRS E1, Delegated Reg. (EU) 2023/2772

Ready to put numbers to it? Use the emissions calculator, or read how the scopes break down in our Scope 1, 2 and 3 guide.

By the numbers

The GHG Protocol in figures

3

Scopes defined by the GHG Protocol: direct, purchased energy, value chain.

3

Consolidation approaches: equity share, financial, operational control.

7

Steps to build a GHG inventory, from boundaries to reporting.

ESRS E1-6

The CSRD disclosure that requires GHG Protocol alignment.

FAQ

People also ask

What is the GHG Protocol?

The Greenhouse Gas (GHG) Protocol is the world most widely used carbon-accounting framework. It provides the standardised methodology for measuring and reporting corporate greenhouse-gas emissions, defining the three scopes and the rules for building an organisational inventory. It underpins CSRD ESRS E1, ISSB IFRS S2 and the Science Based Targets initiative.

Who created the GHG Protocol?

The GHG Protocol was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). It has been maintained and expanded by these bodies since the early 2000s and is now the de facto global standard for corporate carbon accounting.

What is the GHG Protocol Corporate Standard?

The Corporate Accounting and Reporting Standard, known as the Corporate Standard, defines Scope 1 and Scope 2 and the rules for an organisational inventory: setting boundaries, choosing a base year, and accounting consistently. It is complemented by the Corporate Value Chain (Scope 3) Standard and the Scope 2 Guidance.

What is the difference between operational control, financial control and equity share?

These are the three consolidation approaches for organisational boundaries. Equity share accounts for emissions in proportion to your ownership interest. Financial control accounts for 100 percent of operations you financially control. Operational control accounts for 100 percent of operations where you can set operating policies, and is the most common in practice. You pick one and apply it consistently.

What is a greenhouse gas inventory?

A GHG inventory is a structured account of all the greenhouse-gas emissions a company is responsible for in a reporting period. Built using the GHG Protocol Corporate Standard, it sets organisational and operational boundaries, chooses a base year, collects activity data, applies emission factors, and reports emissions by scope. It is the foundation behind every climate target and CSRD E1-6 disclosure.

Does CSRD require the GHG Protocol?

Effectively yes. ESRS E1-6 requires GHG emissions to be measured in line with the GHG Protocol (or ISO 14064-1). So the GHG Protocol is the calculation engine behind CSRD climate disclosure, just as it is behind ISSB IFRS S2 and the SBTi.

What is a base year?

A base year is the representative reference year (or multi-year average) against which you track emissions progress and set targets. You also define a base-year recalculation policy so that structural changes such as acquisitions, divestitures or methodology updates are restated, keeping trends comparable over time.

This is guidance, not legal advice

This page explains the GHG Protocol and GHG inventories in plain English; it is not legal or technical accounting advice. For decisions specific to your business, confirm with the official sources we link or a qualified adviser.

Sources

  1. [1]GHG Protocol Corporate Accounting and Reporting Standardretrieved 8 Jun 2026
  2. [2]GHG Protocol Corporate Value Chain (Scope 3) Standardretrieved 8 Jun 2026
  3. [3]GHG Protocol Scope 2 Guidanceretrieved 8 Jun 2026
  4. [4]US EPA: Determine organizational boundariesretrieved 8 Jun 2026
  5. [5]GHG Protocol: Corporate Standard Phase 1 progress update (Dec 2025)retrieved 8 Jun 2026
  6. [6]Delegated Regulation (EU) 2023/2772 (ESRS Set 1, incl. ESRS E1)retrieved 8 Jun 2026

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