Greenhouse Gas Protocol

I. What is Greenhouse Gas Protocol

The Greenhouse Gas Protocol (GHG Protocol) is the most widely used international
accounting tool for government and business leaders to understand, quantify, and manage
greenhouse gas emissions.

The Greenhouse Gas Protocol (GHG Protocol) works with governments, industry
associations, NGOs, businesses, and other organizations around the world to build credible,
effective, and robust GHG accounting and reporting platforms that serve as a foundation to
address climate change. It establishes comprehensive, global, standardized frameworks for
measuring and managing emissions from private and public sector operations, value chains,
products, cities, and policies.

II. History of GHG

The GHG Protocol arose when World Resources Institute (WRI) and the World Business
Council for Sustainable Development (WBCSD), recognized that an international standard
for corporate GHG accounting and reporting would be necessary in light of evolving climate
change policy. Together with large corporate partners, WRI introduced a report called,
‘Safe Climate, Sound Business,’. The Safe Climate, Sound Business identified an action
agenda to address climate change, among which included the need for standardized
measurement of GHG emissions.

In late 1997, WRI senior managers met with WBCSD officials and an agreement was
reached to launch an NGO-business partnership to address standardized methods for
GHG accounting in 1998. WRI and WBCSD then convened a core steering group
comprised of members from environmental groups and from different industry to guide the
multi-stakeholder standards development process.

After almost four years after the inception of the GHG Protocol, the first edition of The
Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Corporate
Standard) was published in 2001. Since then the GHG Protocol has built upon the
Corporate Standard by developing a suite of calculation tools to assist companies in
calculating their greenhouse gas emissions and additional guidance documents such as
the GHG Protocol for Project Accounting.

Additionally, WRI and WBCSD have partnered with governments, businesses, and non-
government organizations in both developed and developing countries to promote the
broad adoption of the GHG Protocol as the foundation for sound climate change strategies.

III. Objectives of GHG Protocol

GHG Protocol Corporate Standard provides standards and guidance for companies and
other types of organizations preparing a GHG emissions inventory. It covers the accounting
and reporting of the six greenhouse gases covered by the Kyoto Protocol — carbon dioxide
 (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons
(PFCs), and sulphur hexafluoride (SF6).
The standard and guidance were designed with the following objectives :

• To help companies prepare a GHG inventory that represents a true and fair account of
their emissions, through the use of standardized approaches and principles
• To simplify and reduce the costs of compiling a GHG inventory
• To provide business with information that can be used to build an effective strategy to
manage and reduce GHG emissions
• To provide information that facilitates participation in voluntary and mandatory GHG
programs
• To increase consistency and transparency in GHG accounting and reporting among
various companies and GHG programs.

IV. Relationship to other GHG programs

It is important to distinguish between the GHG Protocol Initiative and other GHG programs.
The GHG Protocol Corporate Standard focuses only on the accounting and reporting of
emissions. It does not require emissions information to be reported to WRI or WBCSD. In
addition, while this standard is designed to develop a verifiable inventory, it does not
provide a standard for how the verification process should be conducted. The GHG
Protocol Corporate Standard has been designed to be program or policy neutral. However,
many existing GHG programs use it for their own accounting and reporting requirements
and it is compatible with most of them, including:

• Voluntary GHG reduction programs, e.g., the World Wildlife Fund (WWF) Climate Savers,
the U.S. Environmental Protection Agency (EPA) Climate Leaders, the Climate Neutral
Network, and the Business Leaders Initiative on Climate Change (BLICC)

• GHG registries, e.g., California Climate Action Registry (CCAR), World Economic Forum
Global GHG Registry

• National and regional industry initiatives, e.g., New Zealand Business Council for
Sustainable Development, Taiwan Business Council for Sustainable Development,
Association des entreprises pour la réduction des gaz à effet de serre (AERES)

• GHG trading programs,4 e.g., UK Emissions Trading Scheme (UK ETS), Chicago Climate
Exchange (CCX), and the European Union Greenhouse Gas Emissions Allowance Trading
Scheme (EU ETS)

• Sector-specific protocols developed by a number of industry associations, e.g.,

International Aluminum Institute, International Council of Forest and Paper Associations,
International Iron and Steel Institute, the WBCSD Cement Sustainability Initiative, and the
International Petroleum Industry Environmental Conservation Association (IPIECA). Since
GHG programs often have specific accounting and reporting requirements, companies
should always check with any relevant programs for any additional requirements before
developing their inventory.
V. Calculation Tools

Calculating emissions is a multi-step process. An accurate and useful inventory can only be
developed after careful attention to quality control issues and to the activity data required.
Only then should emissions be estimated.

Below is a complete listing of all tools developed by GHG Protocol. Our tools enable
companies to develop comprehensive and reliable inventories of their GHG emissions.
Each tool reflects best-practice methods that have been extensively tested by industry
experts. Many tools are accompanied by a PDF guidance document, which provides step-
by-step guidance on the use of a tool and should be consulted first. Most companies will
need to apply more than one tool to cover their emissions.

There are different resources for navigating GHG Protocol tools:

1.Cross-sector tools: Applicable to many industries and businesses regardless of sector.

2. Country-specific tools: Customized for particular developing countries.

3. Sector-specific tools: Principally designed for the specific sector or industry listed, though
they may be applicable to other situations.

4. Tools for countries and cities: These tools help countries and cities track progress toward
their climate goals.

VI. Policy and Action Standard

Greenhouse gas (GHG) emissions are driving climate change and its impacts around the
world. According to climate scientists, global greenhouse gas emissions must be cut by as
much as 72 percent below 2010 levels by 2050 to have a likely chance of limiting the
increase in global mean temperature to 2 degrees Celsius above preindustrial levels (IPCC
2014). Every degree increase in temperature will produce increasingly unpredictable and
dangerous impacts for people and ecosystems. As a result, there is an urgent need to
accelerate efforts to reduce GHG emissions.

The GHG Protocol Policy and Action Standard provides a standardized approach for
estimating and reporting the change in GHG emissions and removals resulting from
policies and actions.

The standard was developed with the following objectives:

• To help users assess the GHG effects of specific policies and actions in an accurate,
consistent, transparent, complete, and relevant way
• To help policymakers and other decision makers develop effective strategies for
managing and reducing GHG emissions through a better understanding of the emissions
impacts of policies and actions
• To support consistent and transparent public reporting of emissions impacts and policy
effectiveness
 • To create more international consistency and transparency in the way the GHG effects of
policies and actions are estimated

VII. Importance of GHG

In recent years, global warming and climate change have become international issues for
both industrialized and developing countries. They will undoubtedly continue to be
important politically and economically for generations to come. Increasingly, companies will
need to understand and manage their GHG risks in order to maintain their license to
operate, to ensure long-term success in a competitive business environment, and to
comply with national or regional policies aimed at reducing corporate GHG emissions

The business value of a GHG inventory Global warming and climate change have come to
the fore as a key sustainable development issue. Many governments are taking steps to
reduce GHG emissions through national policies that include the introduction of emissions
trading programs, voluntary programs, carbon or energy taxes, and regulations and
standards on energy efficiency and emissions. As a result, companies must be able to
understand and manage their GHG risks if they are to ensure long-term success in a
competitive business environment, and to be prepared for future national or regional
climate policies.

Conducting an inventory of greenhouse gas emissions is an important first step a company

can take towards developing an effective response to climate change. A greenhouse gas
inventory provides valuable information on the risks and opportunities of operating in a
carbon constrained economy. At a strategic level, greenhouse gas emissions may be
relevant to a company's “license to operate”, competitive environment, “carbon risk”, and
issues of corporate social responsibility. At an operational level, greenhouse gas emissions
information may be relevant to decisions on what products to make, what materials and
technologies to use, and from where to source energy.

The Greenhouse Gas Protocol, a broad collaboration of businesses, NGO's, governments

and others, was convened by the World Business Council for Sustainable Development
(WBCSD) and World Resources Institute (WRI). It represents a voluntary international
standard for accounting and reporting greenhouse gas emissions that will enable
businesses to report information from global operations in a way that presents a clear
picture of GHG risks and reduction opportunities, while facilitating understanding and
comparison with similar reports.