March 28, 2023
5 min read
The Greenhouse Gas (GHG) Protocol is the world’s most widely used accounting standard. It helps companies and organisations quantify and manage their greenhouse gas emissions. It was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) in 1998.
Times are changing! These standards have been around many years but it wouldn’t be surprising if it’s the first time you've heard about them. They form the foundation for the way we look at emissions across scope 1, 2 and 3 and they provide the methodologies we follow to convert activity data into emissions across each of those scopes.
There are a suite of standards and guidance notes. The Corporate Accounting and Reporting Standard was developed in 2004. The Corporate Value Chain (Scope 3) Standard was developed in 2011, Scope 3 Calculation Guidance in 2013, and Scope 2 Guidance in 2015.
Since then there have been huge developments in greenhouse gas accounting and reporting. From the Science Based Targets initiative (SBTi), the trend towards setting net-zero targets, changes in mandatory climate disclosure regulations and more. There were no net zero targets 5 or 10 years ago, so for many companies and certainly accountants, these voluntary standards have sat on the shelf.
Now they’ve been dusted off to keep up the pace. Last year WRI and WBCSD began a process to determine the need and scope for additional guidance or updates building on the existing set of corporate GHG accounting and reporting standards for scope 1, scope 2, and scope 3 emissions. While the Protocol currently doesn't mandate scope 3 reporting, changes in guidance around scope 3 are expected to form part of an update. This would align with the new sustainability reporting and disclosure standards coming in from January 2024.
The GHG Protocol has just received ~$9M from the Bezos Earth Fund to update the standards.
You can access the current standards here.
If you’re a Sumday certified advisor we encourage you to read through these standards in full as you progress through the Introduction to Carbon Accounting Course. This initial step will put all other standards and global discussions around mandatory reporting into context.