10 Reasons to Track a Corporate Carbon Footprint
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In this article, we’ll explain what a corporate carbon footprint is, why it’s important, how it is measured, and reasons why your company should track it too.
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What is the Greenhouse Gas Protocol (GHG Protocol)?
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If you can’t measure it, you can’t manage it. That’s especially true when it comes to greenhouse gas (GHG) emissions, and that’s where the Greenhouse Gas Protocol comes in.
“ Whether you're a global brand, a local council, or a sustainability team in a growing business, you can’t begin to cut emissions without a clear way to track them. The Greenhouse Gas Protocol provides exactly that – a standardized framework for measuring and managing emissions that’s now used around the world. ”
Co-created in the late 1990s by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), the protocol emerged just as climate action was gaining international momentum. Today, it’s the foundation of most carbon reporting systems, underpinning CDP disclosures, ESG strategies, and national climate plans alike.
From tracking emissions from company vehicles to mapping the carbon footprint of global supply chains, the GHG Protocol gives organizations a way to turn complex climate impacts into actionable data.
In this article, we’ll break down the Greenhouse Gas Protocol, explain the difference between Scope 1, 2, and 3 emissions, and show how it helps businesses take meaningful steps toward reducing their environmental impact.
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What is the Greenhouse Gas Protocol? A quick overview
“ The Greenhouse Gas Protocol – often called the GHG Protocol – is the leading global standard for measuring and managing emissions. Used by both public and private sector organizations, it provides a comprehensive global standardized framework for tracking carbon emissions and other greenhouse gases across operations, supply chains, and climate initiatives. ”
But it’s more than just a reporting tool.
At its core, the GHG Protocol helps organizations understand where their emissions are coming from and how to reduce them. By turning complex climate data into clear, comparable metrics, it makes it easier for businesses to take targeted, effective climate action.
Why does this matter? Because reducing GHG emissions is essential to slowing global warming and avoiding the most dangerous impacts of climate change. But without a reliable way to measure emissions, any reduction target is just guesswork.
That’s where the GHG Protocol plays a vital role. It not only enables organizations to build detailed carbon inventories, it also helps them pinpoint the most impactful areas to cut GHG emissions. And because the standards are internationally recognized, they ensure that efforts are transparent, credible, and comparable across sectors and borders.
In fact, according to the GHG Protocol, 97% of disclosing S&P 500 companies reported to CDP using the Greenhouse Gas Protocol – a testament to its role as the gold standard in corporate emissions reporting.
Why was the Greenhouse Gas Protocol created?
By the late 1990s, the world was waking up to the climate crisis, but there was a major problem: no one could agree on how to measure GHG emissions.
Businesses, governments, and organizations all understood that reducing greenhouse gases was essential. Yet without a standardized way to track emissions, progress was patchy at best. Companies couldn’t benchmark their performance, investors couldn’t compare climate claims, and policymakers lacked the data needed to shape effective climate policy.
That’s the gap the Greenhouse Gas Protocol set out to fill.
“ Established in 1998 by the WRI and the WBCSD, the GHG Protocol was designed to bring clarity and consistency to GHG emissions reporting. It introduced a science-based, standardized approach that could be applied across industries and borders, laying the foundation for credible, comparable carbon data. ”
The need for that consistency has only become more urgent. The World Meteorological Organization (WMO) has confirmed that 2024 was the hottest year on record, with a global average surface temperature of 1.55°C above pre-industrial levels. This means we’ve likely just experienced the first calendar year where the global mean temperature exceeded 1.5°C.
That 1.5°C threshold lies at the heart of the Paris Agreement, a global pact signed in 2015 to limit global temperature rise and avoid the most dangerous consequences of climate change. It represents more than a symbolic target – it’s a boundary that, if crossed for the long term, could lead to irreversible damage to ecosystems, economies, and human lives.
“ The GHG Protocol helps organizations take meaningful action to stay within that boundary. Developed through a collaborative process involving experts from business, government, and civil society, it provides a common language for identifying emissions sources, setting reduction targets, and tracking progress over time. Today, it remains the most widely used standard for greenhouse gas accounting and is widely regarded as the gold standard for greenhouse gas accounting and reporting. ”
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What is the purpose of the GHG Protocol?
Measuring GHG emissions is only the starting point. What the Greenhouse Gas Protocol really offers is a foundation for building effective climate strategies, driving accountability, and turning ambition into action at every level.
“ Its core purpose is to provide practical, science-based standards that help organizations turn GHG emissions data into meaningful decisions. That includes everything from setting ambitious climate targets to reporting progress transparently and engaging stakeholders with confidence. ”
As climate challenges evolve, so do the Protocol’s frameworks. New standards have been developed to address everything from product value chain emissions to city-wide mitigation planning. Whether you're a multinational corporation or a municipal government, the GHG Protocol offers tailored guidance to help you navigate your emissions landscape.
This flexibility is what makes it so powerful. It supports action across entire value chains, covering both direct and indirect emissions through the GHG Protocol scopes, enabling companies to understand where their emissions originate and where to focus their efforts. In doing so, it helps organisations focus not just on what they control, but on where they can make the biggest impact.
By enabling a data-driven, forward-looking approach to GHG emissions management, the GHG Protocol helps make climate action more effective, more accountable, and more aligned with global goals for greenhouse gas reductions.
How does the GHG Protocol work?
The Greenhouse Gas Protocol is best known for its system of categorizing GHG emissions into Scope 1, 2, and 3 - a framework now used around the world to help organizations structure their carbon reporting. But this is just one part of its broader contribution to climate action.
Beyond the scopes, the Protocol has developed a wide range of standards tailored to specific sectors, use cases, and emissions challenges. These include everything from product life cycle accounting to city-wide emissions tracking. And the standards aren’t static, they’re regularly updated to reflect the evolving landscape of climate science, policy, and industry needs.
For example, in 2019, the GHG Protocol partnered with the Partnership for Carbon Accounting Financials (PCAF) to create a standard for financial institutions. The goal? To help banks and investors account for the emissions linked to their portfolios, an essential step in aligning finance with climate goals.
The Protocol also supports users with tools, guidance documents, and training programmes to improve the accuracy and efficiency of emissions reporting.
“ Since the Paris Agreement was signed in 2015, the GHG Protocol has expanded its scope to include frameworks that help governments, cities, and public sector bodies track progress toward climate goals, not just companies. ”
Understanding the GHG Protocol Scopes: Scope 1, 2, and 3 emissions
To build an accurate greenhouse gas inventory, companies need a clear way to categorise their emissions, and that’s where the GHG Protocol scopes come in.
“ Scope 1, Scope 2, and Scope 3 emissions represent different sources of GHG emissions across an organization’s operations and value chain. This classification has become a global benchmark for carbon accounting and is now used in most emissions reporting frameworks. ”
Understanding these scopes is key to setting science-based targets, identifying reduction priorities, and tracking progress over time.
Scope 1: Direct emissions
These are GHG emissions that come directly from sources a company owns or controls. This includes fuel combustion in company vehicles, manufacturing equipment, or on-site heating systems. If your company is burning fuel or releasing gases on-site, that’s Scope 1.
Scope 2: Indirect emissions from energy use
Scope 2 refers to emissions that occur off-site but are tied to the energy a company purchases and consumes. Most commonly, this includes emissions from the generation of electricity, steam, heating, or cooling used in offices, factories, or data centres.
Scope 3: Indirect emissions across the value chain
Scope 3 emissions are the most wide-ranging and often the most significant. They include all other indirect emissions that occur as a result of a company’s activities, but from sources not owned or directly controlled by the company. This can include everything from the production of raw materials and transportation of goods to employee commuting, product use, and end-of-life disposal.
For many companies, Scope 3 emissions account for the vast majority of their carbon footprint – sometimes as much as 90%. That’s why tackling Scope 3 is critical for any organization aiming to make meaningful progress on climate goals.
Here’s how the three scopes break down:
| Scope | Definition | Examples |
|---|---|---|
| Scope 1 | Direct GHG emissions from owned or controlled sources | Fuel used in company vehicles, emissions from on-site boilers or furnaces, process emissions from manufacturing |
| Scope 2 | Indirect GHG emissions from purchased energy | Emissions from the generation of purchased electricity, heating, cooling, or steam used in company buildings |
| Scope 3 | All other indirect GHG emissions across the value chain | Purchased goods and services, business travel, waste disposal, transportation and distribution, product use, and end-of-life |
“ This scope-based system allows organizations to clearly define the boundaries of their emissions reporting. It also helps ensure greater consistency and comparability across industries, making it easier to benchmark progress and identify where reductions will have the greatest impact. ”
What are the different GHG Protocol Standards?
The Greenhouse Gas Protocol isn’t a single document, it’s a collection of evolving standards designed to meet the diverse needs of organizations measuring and managing their emissions.
While the Scope 1, 2, and 3 framework offers a high-level view of emissions sources, these standards provide the technical guidance needed to apply that framework in practice. They support everything from corporate carbon reporting and product-level assessments to national climate policies and city-wide decarbonization plans.
Each standard responds to a specific challenge, whether it’s calculating the impact of a climate policy, understanding the carbon footprint of a supply chain, or designing a lower-emissions product.
Let’s explore the key standards and how they’re used:
Corporate Accounting and Reporting Standard
The Corporate Standard serves as the foundation for GHG emissions measurement at the organizational level. It outlines how to build a reliable GHG inventory, including how to define organizational and operational boundaries, categorise GHG emissions sources, and ensure data quality over time.
Though primarily designed for companies, it’s also used by government agencies, non-profits, and academic institutions to ensure consistency and transparency in carbon reporting, especially in high-emissions sectors like manufacturing, transportation, and those reliant on fossil fuels.
“ According to the Carbon Majors Report, 71% of global emissions since 1988 can be traced back to just 100 companies – underscoring the critical role of corporate accountability in tackling climate change. ”
Corporate Value Chain (Scope 3) Standard
Scope 3 emissions (those linked to a company’s supply chain and product use) are often the largest and most difficult to measure.
The Corporate Value Chain Scope, also known as the Scope 3 Standard, helps organizations account for these indirect emissions across 15 defined categories, from purchased goods and employee commuting to product disposal and end-of-life impacts. It enables companies to identify emissions hotspots and make informed decisions about reduction strategies.
This standard is increasingly important as frameworks like CDP and TCFD push for more transparent Scope 3 reporting.
Product Life Cycle Standard
Designed for businesses that want to understand the full climate impact of their products, the Product Standard provides a methodology for calculating GHG emissions from raw material extraction to end-of-life disposal.
By embedding carbon analysis into product design and development, companies can reduce both emissions and costs while responding to growing consumer demand for sustainable products.
Project Protocol
When organizations implement climate change mitigation projects, such as renewable energy installations, energy efficiency upgrades, or reforestation, they need a way to quantify those reductions credibly.
The Project Protocol provides a robust approach to assessing the GHG impact of individual projects, allowing for comparison against a baseline or “business as usual” scenario. It’s used by both public and private sector actors to demonstrate climate impact with confidence.
Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC)
With cities responsible for over 75% of global emissions, local action is vital to addressing climate change. The GPC helps cities, states, and regions measure GHG emissions across sectors like buildings, transport, waste, and industry.
By enabling consistent and comparable data, it supports urban climate planning, helps track progress, and encourages collaboration across local governments.
Mitigation Goal Standard
Many governments have set long-term emissions reduction goals, including Nationally Determined Contributions (NDCs) under the Paris Agreement. The Mitigation Goal Standard helps track progress toward these targets.
It provides a structured approach for evaluating whether policies and actions are delivering the expected results, and supports transparent reporting to national and international stakeholders.
Policy and Action Standard
When evaluating new climate policies or programmes, decision-makers need to understand their likely emissions impact. The GHG Protocol policy standard provides a consistent methodology to estimate and compare the effectiveness of different interventions, such as renewable energy subsidies, building codes, or carbon pricing.
It helps policymakers weigh options, improve planning, and communicate expected outcomes to the public and investors.
Summary of key GHG Protocol standards:
| Standard | Purpose | Scope / Focus | Who uses it | Key features |
|---|---|---|---|---|
| Corporate Standard | Develops a complete GHG inventory | Scope 1 & 2 | Companies, NGOs, and public institutions | Defines boundaries, classifies emissions, sets base year, and tracks performance |
| Scope 3 Standard | Measures emissions across supply chains and product lifecycles | Scope 3 | Corporations and large organizations | Covers 15 categories; focuses on indirect emissions across value chains |
| Product Standard | Assesses emissions of individual products | Product lifecycle | Manufacturers, retailers, and design teams | Informs product development and emissions reduction strategies |
| Project Protocol | Calculates emissions reductions from specific initiatives | Project-level | Corporations, local authorities, developers | Applies to renewable energy, reforestation, efficiency upgrades, and more |
| GPC for Cities | Tracks emissions at the city or regional scale | Community-level | Cities, states, and national governments | Supports local climate planning and benchmarking |
| Mitigation Goal Standard | Evaluates progress against climate targets | National/regional goals | National and sub-national governments | Designed to align with the Paris Agreement and NDCs |
| Policy and Action Standard | Estimates the GHG impact of policy decisions | Government action | Policymakers and regulators | Helps compare options and improve accountability |
Why is the GHG Protocol useful to companies?
“ Climate targets are becoming a business necessity. Investors want transparency, customers expect climate action, and regulators are introducing tougher disclosure rules. ”
For companies looking to future-proof their operations and thrive in a low-carbon economy, the GHG Protocol offers a practical and credible foundation. It offers a clear, consistent framework for measuring and reporting GHG emissions, helping businesses move from ambition to action with data they can trust.
Here’s how the GHG Protocol helps businesses stay ahead:
Clarity on where emissions come from – and how to reduce them
The GHG Protocol helps organizations understand exactly where their greenhouse gas emissions originate, across Scopes 1, 2, and 3. This enables more focused reduction efforts, whether it’s improving operational efficiency, switching to renewable energy, or redesigning supply chains.
Builds trust with investors, customers, and stakeholders
Transparent reporting backed by a globally recognized standard helps companies demonstrate accountability and credibility. In a world where 88% of institutional investors consider ESG factors in their decisions, trust matters more than ever.
Aligns with ESG frameworks and global standards
The GHG Protocol is embedded in many leading sustainability initiatives, including:
- Science Based Targets initiative (SBTi) – which requires Scope 1–3 reporting for most companies
- Global Reporting Initiative (GRI) and SASB – which rely on GHG Protocol principles for emissions data
- Regulations such as the EU’s Sustainable Finance Disclosure Regulation (SFDR) and the UK’s Sustainability Disclosure Requirements (SDR)
“ Many ESG frameworks, like CDP and the Science Based Targets initiative, are built on GHG Protocol principles, but companies can also use the GHG Protocol directly to build emissions inventories and set science-based targets. ”
Using the Protocol ensures alignment with current ESG expectations and helps companies stay ahead of regulatory change.
Prepares companies for compliance and climate risk disclosure
As governments introduce stricter reporting rules, including requirements for climate-related financial disclosures, companies need a consistent, auditable method for emissions reporting. The GHG Protocol provides exactly that.
Drives product innovation and market opportunities
By measuring the full emissions impact of their products and services, companies can make more informed design, sourcing, and production decisions, often reducing both emissions and costs in the process. This kind of product-level insight also helps brands meet growing consumer demand for sustainability.
“ 75% of Gen Z consumers say environmental impact influences their purchasing choices – a clear signal that low-carbon products are fast becoming a competitive differentiator. ”
How can companies implement GHG Protocol Standards?
The GHG Protocol is a tool companies can use to drive real greenhouse gas emissions reductions. But knowing where to start and how to apply the standards in practice can be a challenge.
Here’s a practical roadmap to help companies embed the GHG Protocol into their climate strategy:
1. Choose the right standard for your business
Start by identifying which GHG Protocol standard (or combination of standards) best fits your company’s goals, size, and emissions profile.
| If your company needs to... | Use this standard |
|---|---|
| Build a foundational emissions inventory | Corporate Standard |
| Measure and manage supply chain emissions | Value Chain (Scope 3) Standard |
| Understand the full carbon footprint of a product | Product Standard |
| Quantify emissions reductions from a specific project | Project Protocol |
| Track progress against long-term climate targets | Mitigation Goal Standard |
Example: Unilever uses the Value Chain Standard to evaluate emissions across its supply chain, identifying hotspots like raw material sourcing and logistics.
2. Build a tailored emissions inventory
Once the right standard is selected, the next step is to create a robust GHG inventory, the foundation for any climate strategy.
This involves:
- Defining organizational and operational boundaries (eg. subsidiaries, joint ventures, leased assets)
- Mapping and categorizing emissions sources across Scopes 1, 2, and 3
- Establishing an inventory management plan to track actual emissions with consistent data collection, quality control, and documentation
Example: Microsoft applies the Corporate Standard to measure Scope 1 and 2 emissions from its offices and data centres, using this data as a baseline for reduction initiatives.
3. Set science-aligned targets to reduce greenhouse gas emissions
With baseline data in place, companies can use their emissions inventory to set short and long-term reduction targets. These targets should align with recognized frameworks like the Science Based Targets initiative (SBTi), which encourages credible and ambitious climate goals.
The GHG Protocol’s structure ensures that targets are based on consistent, transparent emissions data, building internal confidence and external trust.
4. Act on the insights: reduce what you can
Once greenhouse gas emissions hotspots are clear, companies can move from measurement to mitigation. Strategies might include:
- Improving energy efficiency in buildings or production facilities
- Switching to renewable electricity and low-carbon fuels
- Redesigning products or packaging to lower life cycle emissions
- Engaging suppliers to reduce upstream emissions
- Exploring circular models or low-impact materials
Example: IKEA integrates the Product Standard to measure the value chain emissions of its furniture, leading to initiatives such as sustainable material sourcing and circular economy practices.
5. Monitor progress and communicate clearly
Tracking progress and reporting results is essential to staying accountable, both internally and externally.
Companies should:
- Continuously update their GHG inventory to reflect operational changes
- Publish emissions data through sustainability reports and ESG disclosures
- Align reporting with frameworks like CDP, GRI, or TCFD
- Consider third-party verification to build credibility
Regular, transparent updates show stakeholders that climate commitments are more than words; they’re backed by action.
“ The Greenhouse Gas Protocol has been instrumental in establishing GHG accounting standards to aid corporate accounting and reporting, thereby enabling organisations to accurately track and mitigate emissions. ”
The GHG Protocol in the US
In the US, the GHG Protocol is widely used by companies across sectors to meet both voluntary and regulatory reporting needs, and it’s becoming even more relevant as climate rules evolve.
At the federal level, large emitters are required to report through the EPA’s Greenhouse Gas Reporting Program (GHGRP). While the GHGRP has its own specific methodology, many companies use the GHG Protocol alongside it to create a more complete and comparable picture of their emissions, especially when reporting to external stakeholders or participating in ESG frameworks.
That alignment is especially useful now, as the Securities and Exchange Commission (SEC) moves closer to finalising rules that would require public companies to disclose Scope 1 and 2 emissions – and possibly Scope 3 – in their financial filings. The GHG Protocol provides the structure and guidance companies need to get ready.
Many businesses also follow the GHG Protocol to meet voluntary standards like those set by the Science Based Targets initiative (SBTi) or to report through CDP. These initiatives are grounded in GHG Protocol principles, so companies using it directly are well-placed to meet expectations around transparency, accountability, and climate action.
“ In short, the GHG Protocol is already playing a central role in helping US companies prepare for climate-related financial disclosures, and it’s only going to become more important as regulation tightens and investor scrutiny grows. ”
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How can Greenly help your company reduce greenhouse gas emissions?
Navigating the complexities of GHG accounting and emissions management can be challenging, but that's where Greenly comes in. Our carbon management services are designed to help your company measure, analyse, and reduce emissions effectively, aligning with global frameworks like the Greenhouse Gas Protocol.
Here's how we can support your sustainability journey:
- Emissions Tracking: Our platform allows you to monitor Scope 1, 2, and 3 emissions, helping you identify hotspots and target reduction strategies with precision.
- Lifecycle Assessments (LCAs): Gain detailed insights into the environmental impact of your products and services, empowering you to make data-driven decisions for improvement.
- Supply Chain Sustainability: We provide tailored guidance to help you engage with suppliers and transition to more sustainable practices across your value chain.
- Science-Based Target Setting: Our team supports you in setting achievable science-based targets that align with your company's goals and international standards like the SBTi.
- Decarbonization Pathways: Create actionable roadmaps to reduce emissions, optimise operations, and enhance efficiency.
- Regulatory Compliance: Stay ahead of evolving regulations with our tools and insights that simplify compliance with ESG frameworks like GRI, SASB, and others.
- Tailored Action Plans: Our industry-specific recommendations help you focus on practical, impactful steps to achieve your sustainability targets.
- User-Friendly Reporting Tools: Simplify emissions reporting for stakeholders and regulators with Greenly's intuitive dashboards and reports.
Whether you're just starting your carbon management journey or looking to refine your strategy, Greenly's expertise and solutions can help your company make meaningful progress toward a more sustainable future. Get in touch with Greenly today to find out more.
Sources:
- Greenly, Carbon Emissions: What You Need to Know
https://greenly.earth/en-gb/blog/ecology-news/carbon-emissions-what-you-need-to-know - World Business Council for Sustainable Development (WBCSD), Homepage
https://www.wbcsd.org/ - Greenly, Climate Change in 2022: Where Do We Stand?
https://greenly.earth/en-gb/blog/ecology-news/climate-change-in-2022-where-do-we-stand - GHG Protocol, About Us
https://ghgprotocol.org/about-us - World Meteorological Organization, WMO Confirms 2024 as Warmest Year on Record
https://wmo.int/news/media-centre/wmo-confirms-2024-warmest-year-record-about-155degc-above-pre-industrial-level - Greenly, Paris Agreement: All You Need to Know
https://greenly.earth/en-gb/blog/ecology-news/paris-agreement-all-you-need-to-know - Greenly, Greenhouse Gas Emissions: Scopes 1, 2 and 3
https://greenly.earth/en-gb/blog/company-guide/greenhouse-gas-emissions-scopes-1-2-and-3 - Greenly, What Are Scope 1 Emissions?
https://greenly.earth/en-gb/blog/company-guide/what-are-scope-1-emissions - Greenly, What Are Scope 2 Emissions?
https://greenly.earth/en-gb/blog/company-guide/what-are-scope-2-emissions - Greenly, What Are Scope 3 Emissions?
https://greenly.earth/en-gb/blog/company-guide/what-are-scope-3-emissions - Global Climate Initiatives, Scope 3 Becomes Mandatory in France (2022 Decree)
https://globalclimateinitiatives.com/en/carbon-inventory/publication-du-decret-1er-juillet-2022-relatif-aux-bilans-demissions-de-gaz-a-effet-de-serre-enfin-le-scope-3-devient-obligatoire - The Guardian, 100 Fossil Fuel Companies Responsible for 71% of Global Emissions
https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change - UN Environment Programme, Cities and Climate Change
https://www.unep.org/explore-topics/resource-efficiency/what-we-do/cities-and-climate-change - EY, Investors Shun Long-Term ESG Rewards in Quest for Short-Term Gains
https://www.ey.com/en_gl/newsroom/2024/12/investors-shun-long-term-esg-rewards-in-quest-for-short-term-gains#:~:text=Almost%20nine%20in%20ten%20of,it%20comes%20to%20decision%20making - World Economic Forum, How Generation Z is Driving Sustainability Through Lifestyle and Buying Decisions
https://www.weforum.org/stories/2022/03/generation-z-sustainability-lifestyle-buying-decisions - Unilever, Climate Transition Action Plan (2021)
https://www.unilever.com/files/035a7831-6a3c-4974-9f34-e9921b0bbe79/archive-unilever-climate-transition-action-plan--published-2021.pdf - Greenly, What is the Science-Based Targets Initiative (SBTi)?
https://greenly.earth/en-gb/blog/company-guide/what-is-the-science-based-targets-initiative-sbti - IKEA, Climate Report FY23
https://www.ikea.com/global/en/images/IKEA_CLIMATE_Report_FY_23_20240125_a5a1535f4e.pdf
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