GHG Protocol Scope 3 Standard – 1 Best reading

Corporate Value Chain (Scope 3) Accounting and Reporting Standard / GHG Protocol Scope 3 Standard

Introduction GHG Protocol Scope 3 Standard

Emissions of the anthropogenic greenhouse gases (GHG) that drive climate change and its impacts around the world are growing. According to climate scientists, global carbon dioxide emissions must be cut by as much as 85 percent below 2000 levels by 2050 to limit global mean temperature increase to 2 degrees Celsius above pre-industrial levels 1. Temperature rise above this level will produce increasingly unpredictable and dangerous impacts for people and ecosystems.

As a result, the need to accelerate efforts to reduce anthropogenic GHG emissions is increasingly urgent. Existing government policies will not sufficiently solve the problem. Leadership and innovation from business is vital to making progress.

Corporate action in this arena also makes good business sense. By addressing GHG emissions, companies can identify opportunities to bolster their bottom line, reduce risk, and discover competitive advantages.

As impacts from climate change become more frequent and prominent, governments are expected to set new policies and provide additional market-based incentives to drive significant reductions in emissions.

These new policy and market drivers will direct economic growth on a low-carbon trajectory. Businesses need to start planning for this transition now as they make decisions that will lock in their investments for years to come.

An effective corporate climate change strategy requires a detailed understanding of a company’s GHG impact. A corporate GHG inventory is the tool to provide such an understanding. It allows companies to take into account their emissions-related risks and opportunities and focus company efforts on their greatest GHG impacts.

Until recently, companies have focused their attention on emissions from their own operations. But increasingly companies understand the need to also account for GHG emissions along their value chains and product portfolios to comprehensively manage GHG-related risks and opportunities.

Through the development of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, the GHG Protocol has responded to the demand for an internationally accepted method to enable GHG management of companies’ value chains.

Following the release of this standard, the GHG Protocol and its partners will proactively work with industry groups and governments to promote its widespread use – along with the entire suite of GHG Protocol standards and tools – to enable more effective GHG management worldwide.

1.1 The Greenhouse Gas Protocol

The Greenhouse Gas Protocol (GHG Protocol) is a multi-stakeholder partnership of businesses, non-governmental organizations (NGOs), governments, and others convened by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

Launched in 1998, the mission of the GHG Protocol is to develop internationally accepted greenhouse gas (GHG) accounting and reporting standards and tools, and to promote their adoption in order to achieve a low emissions economy worldwide.

The GHG Protocol has produced the following separate but complementary standards, protocols, and guidelines:

  • GHG Protocol Corporate Accounting and Reporting Standard (2004): A standardized methodology for companies to quantify and report their corporate GHG emissions. Also referred to as the Corporate Standard.
  • GHG Protocol Product Life Cycle Accounting and Reporting Standard (2011): A standardized methodology to quantify and report GHG emissions associated with individual products throughout their life cycle. Also referred to as the Product Standard.
  • GHG Protocol for Project Accounting (2005): A guide for quantifying reductions from GHG-mitigation projects. Also referred to as the Project Protocol.
  • GHG Protocol for the U.S. Public Sector (2010): A step-by-step approach to measuring and reporting emissions from public sector organizations, complementary to the Corporate Standard.
  • GHG Protocol Guidelines for Quantifying GHG Reductions from Grid-Connected Electricity Projects (2007): A guide for quantifying reductions in emissions that either generate or reduce the consumption of electricity transmitted over power grids, to be used in conjunction with the Project Protocol.
  • GHG Protocol Land Use, Land-Use Change, and Forestry Guidance for GHG Project Accounting (2006): A guide to quantify and report reductions from land use, land-use change, and forestry, to be used in conjunction with the Project Protocol.
  • Measuring to Manage: A Guide to Designing GHG Accounting and Reporting Programs (2007): A guide for program developers on designing and implementing effective GHG programs based on accepted standards and methodologies.

1.2 Purpose of this standard

The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (also referred to as the Scope 3 Standard) provides requirements and guidance for companies and other organizations to prepare and publicly report a GHG emissions inventory that includes indirect emissions resulting from value chain activities (i.e., scope 3 emissions).

The primary goal of this standard is to provide a standardized step-by-step approach to help companies understand their full value chain emissions impact in order to focus company efforts on the greatest GHG reduction opportunities, leading to more sustainable decisions about companies’ activities and the products they buy, sell, and produce.

The standard was developed with the following objectives in mind:

  • To help companies prepare a true and fair scope 3 GHG inventory in a cost-effective manner, through the use of standardized approaches and principles
  • To help companies develop effective strategies for managing and reducing their scope 3 emissions through an understanding of value chain emissions and associated risks and opportunities
  • To support consistent and transparent public reporting of corporate value chain emissions according to a standardized set of reporting requirements

Ultimately, this is more than a technical accounting standard. It is intended to be tailored to business realities and to serve multiple business objectives. Companies may find most value in implementing the standard using a phased approach, with a focus on improving the quality of the GHG inventory over time.

1.3 Relationship to the GHG Protocol Corporate Standard

The GHG Protocol Scope 3 Standard is a supplement to the GHG Protocol Corporate Accounting and Reporting Standard, Revised Edition (2004) and should be used in conjunction with it. The Corporate Standard – first launched in 2001 and revised in 2004 – has been widely adopted by businesses, NGOs, and governments around the world as the international standard for developing and reporting a company-wide GHG inventory.

The Scope 3 Standard complements and builds upon the Corporate Standard to promote additional completeness and consistency in the way companies account for and report on indirect emissions from value chain activities.

The Corporate Standard classifies a company’s direct and indirect GHG emissions into three “scopes,” and requires that companies account for and report all scope 1 emissions (i.e., direct emissions from owned or controlled sources) and all scope 2 emissions (i.e., indirect emissions from the generation of purchased energy consumed by the reporting company).

The Corporate Standard gives companies flexibility in whether and how to account for scope 3 emissions (i.e., all other indirect emissions that occur in a company’s value chain). Figure 1.1 provides an overview of the three GHG Protocol scopes and categories of scope 3 emissions.

GHG Protocol Scope 3 Standard

Since the Corporate Standard was revised in 2004, business capabilities and needs in the field of GHG accounting and reporting have grown significantly. Corporate leaders are becoming more adept at calculating scope 1 and scope 2 emissions, as required by the Corporate Standard.

As GHG accounting expertise has grown, so has the realization that significant emissions – and associated risks and opportunities – result from value chain activities not captured by scope 1 and scope 2 inventories.

Scope 3 emissions can represent the largest source of emissions for companies and present the most significant opportunities to influence GHG reductions and achieve a variety of GHG-related business objectives (see Business Goals).

Developing a full corporate GHG emissions inventory – incorporating scope 1, scope 2, and scope 3 emissions – enables companies to understand their full emissions impact across the value chain and focus efforts where they can have the greatest impact.

Companies reporting their corporate GHG emissions have two reporting options (see the table below).

GHG Protocol Scope 3 Standard

Under the Corporate Standard, companies are required to report all scope 1 and scope 2 emissions, while reporting scope 3 emissions is optional. The Scope 3 Standard is designed to create further consistency in scope 3 inventories through additional requirements and guidance for scope 3 accounting and reporting.

Companies should make and apply decisions consistently across both standards. For example, the selection of a consolidation approach (equity share, operational control or financial control) should be applied consistently across scope 1, scope 2, and scope 3. For more information, see section 5.2 Organizational bounderies and scope 3 emissions.

1.4 Who should use this standard?

This standard is intended for companies of all sizes and in all economic sectors. It can also be applied to other types of organizations and institutions, both public and private, such as government agencies, non-profit organizations, assurers and verifiers, and universities.

Policymakers and designers of GHG reporting or reduction programs can use relevant parts of this standard to develop accounting and reporting requirements. Throughout this standard, the term “company” is used as shorthand to refer to the entity developing a scope 3 inventory.

1.5 Scope of the standard

This standard is designed to account for the emissions generated from corporate value chain activities during the reporting period (usually a period of one year), and covers the six main greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6).

This standard does not address the quantification of avoided emissions or GHG reductions from actions taken to compensate for or offset emissions. These types of reductions are addressed by the GHG Protocol for Project Accounting.

Use of this standard is intended to enable comparisons of a company’s GHG emissions over time. It is not designed to support comparisons between companies based on their scope 3 emissions. Differences in reported emissions may be a result of differences in inventory methodology or differences in company size or structure.

Additional measures are necessary to enable valid comparisons across companies. Such measures include consistency in methodology and data used to calculate the inventory, and reporting of additional information such as intensity ratios or performance metrics. Additional consistency can be provided through GHG reporting programs or sector specific guidance (see section 1.9).

1.6 How was this standard developed?

The GHG Protocol follows a broad and inclusive multi-stakeholder process to develop greenhouse gas accounting and reporting standards with participation from businesses, government agencies, NGOs, and academic institutions from around the world.

In 2008, WRI and WBCSD launched a three-year process to develop the GHG Protocol Scope 3 Standard. A 25-member Steering Committee of experts provided strategic direction throughout the process. The first draft of the Scope 3 Standard was developed in 2009 by Technical Working Groups consisting of 96 members (representing diverse industries, government agencies, academic institutions, and non-profit organizations worldwide).

In 2010, 34 companies from a variety of industry sectors road-tested the first draft and provided feedback on its practicality and usability, which informed a second draft. Members of a Stakeholder Advisory Group (consisting of more than 1,600 participants) provided feedback on each draft of the standard.

1.7 Relationship to the GHG Protocol Product Standard

The GHG Protocol Scope 3 Standard and GHG Protocol Product Standard both take a value chain or life cycle approach to GHG accounting and were developed simultaneously. The Scope 3 Standard accounts for value chain emissions at the corporate level, while the Product Standard accounts for life cycle emissions at the individual product level.

Together with the Corporate Standard, the three standards provide a comprehensive approach to value chain GHG measurement and management.

The reporting company’s business goals should drive the use of a particular GHG Protocol accounting standard. The Scope 3 Standard enables a company to identify the greatest GHG reduction opportunities across the entire corporate value chain, while the Product Standard enables a company to target individual products with the greatest potential for reductions.

The Scope 3 Standard helps a company identify GHG reduction opportunities, track performance, and engage suppliers at a corporate level, while the Product Standard helps a company meet the same objectives at a product level.

Common data is used to develop scope 3 inventories and product inventories, including data collected from suppliers and other companies in the value chain. Since there can be overlap in data collection, companies may find added business value and efficiencies in developing scope 3 and product inventories in parallel.

While each standard can be implemented independently, both standards are mutually supportive. Integrated use might include:

  • Applying the Scope 3 Standard, using the results to identify products with the most significant emissions, then using the Product Standard to identify mitigation opportunities in the selected products’ life cycles
  • Using product-level GHG data based on the Product Standard as a source of data to calculate scope 3 emissions associated with selected product types
  • Applying either the Scope 3 Standard or the Product Standard and using the results to inform GHGreduction strategies that reduce both product and  corporate level (scope 3) emissions

The sum of the life cycle emissions of each of a company’s products, combined with additional scope 3 categories (e.g., employee commuting, business travel, and investments), should approximate the company’s total corporate GHG emissions (i.e., scope 1 + scope 2 + scope 3). In practice, companies are not expected or required to calculate life cycle inventories for individual products when calculating scope 3 emissions.

Figure 1.2 illustrates the relationship between the Corporate Standard, Product Standard, and Scope 3 Standard. In this simplified example, a company manufactures one product (Product A). The example shows how scopes of emissions at the corporate level correspond to life cycle stages2 at the product level.

GHG Protocol Scope 3 Standard

1.8 GHG calculation tools and guidance

To help companies implement the Scope 3 Standard, the GHG Protocol website provides a variety of useful GHG calculation tools and guidance, including:

  • Guidance for Calculating Scope 3 Emissions, a companion document to the Scope 3 Standard that provides detailed guidance for calculating scope 3 emissions, including calculation methods, data sources, and examples of calculating scope 3 emissions
  • A list of available data sources for calculating scope 3 emissions, including over 80 emission factor databases covering a variety of sectors and geographic regions
  • Several cross-sector and sector-specific calculation tools, which provide step-by-step guidance, together with electronic worksheets to help companies calculate GHG emissions from specific sources or sectors

All GHG calculation tools and guidance are available at

1.9 Sector guidance

The development of sector-specific implementation guidance and tools can drive more consistent corporate GHG measurement, reporting, and performance tracking practices for a particular sector. Helpful sector-level information could include guidance on interpreting the standard for a specific sector, guidance and tools for calculating emissions from sector-specific activities, recommended performance metrics, specific guidance for identifying the largest sector emissions sources, and suggested data sources and emissions factors.

Sectors should develop guidance through an inclusive multi-stakeholder process to ensure broad acceptance and facilitate increased consistency and credibility.

Guidance 2 Business Goals

Developing a scope 3 inventory strengthens companies’ understanding of their value chain GHG emissions as a step towards effectively managing emissions-related risks and opportunities and reducing value chain GHG emissions.

Business goals of a scope 3 inventory

Before accounting for scope 3 emissions, companies should consider which business goal or goals they intend to achieve. See table 2.1 for a list of goals frequently cited by businesses as reasons for developing a scope 3 inventory.

GHG Protocol Scope 3 Standard

Identify and understand risks and opportunities associated with value chain emissions

GHG emissions from corporate activities are increasingly becoming a mainstream management issue for businesses. Potential liabilities from GHG exposure arise from unstable resource and energy costs, future resource scarcity, environmental regulations, changing consumer preferences, scrutiny from investors and shareholders, as well as reputational risk from other stakeholders. (See table 2.2 for examples of risks related to scope 3 GHG emissions.)

GHG Protocol Scope 3 Standard

GHG Protocol Scope 3 Standard

By developing a scope 3 inventory, companies can understand the overall emissions profile of their upstream and downstream activities. This information provides companies with an understanding of where potential emissions and associated risks and opportunities lie in the value chain, as well as the relative risks and opportunities of scope 3 emissions compared to companies’ direct emissions.

For some companies, developing a scope 3 inventory may improve planning for potential future carbon regulations. For example, energy or emissions taxes or regulations in a company’s supply chain may significantly increase the cost of goods or components purchased by a company.

Understanding scope 3 emissions helps companies plan for potential regulations and can guide corporate procurement decisions and product design.

Additionally, companies may find that there is a reputational risk if they do not understand the impacts of their broader corporate value chain activities. By undertaking a scope 3 inventory and understanding where their emissions are, companies can credibly communicate to their stakeholders the potential impacts of these emissions and the actions planned or taken to reduce the associated risks.

Companies can also use the results of the scope 3 inventory to identify new market opportunities for producing and selling goods and services with lower GHG emissions. As more companies in the value chain measure and manage GHG emissions, demand will grow for new products that reduce emissions throughout the value chain. See table 2.2 above for examples of opportunities related to scope 3 emissions.

Identify GHG reduction opportunities, set reduction targets, and track performance

The scope 3 inventory provides a quantitative tool for companies to identify and prioritize emissions-reduction opportunities along their value chain. Scope 3 inventories provide detailed information on the relative size and scale of emission-generating activities within and across the various scope 3 categories.

This information may be used to identify the largest emission sources (i.e., “hot spots”) in the value chain and focus efforts on the most effective emission-reduction opportunities, resulting in cost savings for companies.

For example, a company whose largest source of value chain emissions is contracted logistics may choose to optimize these operations through changes to product packaging to increase the volume per shipment, or by increasing the number of low-carbon logistics providers.

Additionally, companies may utilize this information to change their procurement practices or improve product design or product efficiency, resulting in reduced energy use.

Conducting a GHG inventory according to a consistent framework is also a prerequisite for setting credible public GHG reduction targets. External stakeholders, including customers, investors, shareholders, and others, are increasingly interested in companies’ documented emissions reductions.

Therefore, identifying reduction opportunities, setting goals, and reporting on progress to stakeholders may help differentiate a company in an increasingly environmentally-conscious marketplace.

Engage value chain partners in GHG management

Developing a scope 3 inventory encourages the quantification and reporting of emissions from various partners across the value chain. For many companies, a primary goal of developing a scope 3 inventory is to encourage supplier GHG measurement and reduction, and to report on supplier performance.

For example, a company may engage with their major suppliers to obtain emissions information on the products it purchases from them, as well as information on suppliers’ GHG management plans.

Successful engagement with suppliers often requires a company to work closely with its supply chain partners to build a common understanding of emissions-related information and the opportunities and benefits of achieving GHG reductions.

Reporting on the progress of a company’s engagement with its supply chain can be useful information for stakeholders external and internal to the reporting company.

Companies may also wish to engage with their customers by providing information on product use and disposal. For example, a company may want to work with stakeholders such as retailers, marketers or advertisers to convey information to customers on less energy intensive products, how to use a product more efficiently, or to encourage recycling.

A scope 3 inventory enables companies to identify their downstream hot spots so that they can credibly engage with customers to reduce their value chain emissions.

By developing a scope 3 inventory, companies can identify where the largest energy, material and resource use is within the supply chain. This knowledge can inform cost savings through reducing material, energy and resource use, improving overall efficiency of companies’ supply chains, reducing regulatory risks, and strengthening supplier and customer relationships.

National Grid: Business objectives for scope 3 accounting
National Grid is an international electricity and gas company and one of the largest investor-owned energy companies in the world. At the heart of National Grid’s corporate vision is “safeguarding our environment for future generations.” One of National Grid’s strategic objectives is to ensure that National Grid is a sustainable low carbon business.

National Grid recognized that in order to deliver a fully effective greenhouse gas reduction plan, all emissions need to be taken into account. Therefore, National Grid developed a strategy for quantifying and reducing its scope 3 emissions, with several specific objectives in mind:

  • Understanding the risks and opportunities associated with emissions across the entire value chain
  • Considering the environmental impact in investment and other business decisions through internalization of carbon costs and assessment of benefits
  • Becoming agents for change by working with customers and supply chain partners to drive GHG reductions and providing transparency and accountability within the value chain
  • Working with governments and regulators to encourage allowable investments through carbon-trading mechanisms and clear legislation

To help achieve these objectives, National Grid used the GHG Protocol Scope 3 Standard to inventory its scope 3 emissions. After developing the full scope 3 inventory, a clear picture appeared with emissions from the use of sold products emerging as by far the biggest source of scope 3 emissions.

This valuable insight helped National Grid understand the full impact of its business operations and provided more focused direction for future strategies and targets.

Enhance stakeholder information and corporate reputation through public reporting

As concerns over climate change grow, NGOs, investors, governments and other stakeholders are increasingly calling for greater disclosure of corporate activities and GHG information.

They are interested in the actions companies are taking and in how companies are positioned relative to their competitors. For many companies, responding to this stakeholder interest by disclosing information on corporate emissions and reduction activities is a business objective of developing a scope 3 inventory.

Companies can improve stakeholder relationships through proactive disclosure and demonstration of environmental stewardship. Examples include demonstrating fiduciary responsibility to shareholders, informing regulators, building trust in the community, improving relationships with customers and suppliers, and increasing employee morale.

Companies have a variety of avenues for communicating with stakeholders. Companies can disclose information through stand-alone corporate sustainability reports, mandatory government registries, industry groups, or through stakeholder-led reporting programs.

Mandatory and voluntary reporting programs often offer companies assistance in setting GHG targets, provide industry-specific benchmarking information, and provide information on corporate activities to a specific stakeholder audience.

An example of a global voluntary reporting program is the Carbon Disclosure Project, which requests corporate GHG performance information on behalf of a community of investors. Companies may also find that public reporting through a voluntary GHG reporting program can strengthen their standing with customers and differentiate them from their competitors.

Guidance 3 Summary of Steps and Requirements

This chapter provides a summary of the steps involved in scope 3 accounting and reporting, as well as a list of the requirements that must be followed for a scope 3 inventory to be in conformance with this standard.

3.1 Scope 3 accounting and reporting steps

This standard is organized according to the steps a company should follow when developing a scope 3 inventory. Figure 3.1 provides an overview of the steps in scope 3 accounting and reporting.

GHG Protocol Scope 3 Standard

Each step is described in detail in the following chapters.

3.2 Terminology: shall, should, and may

This standard uses precise language to indicate which provisions of the standard are requirements, which are recommendations, and which are permissible or allowable options that companies may choose to follow.

The term “shall” is used throughout this standard to indicate what is required in order for a GHG inventory to be in conformance with the GHG Protocol Scope 3 Standard. The term “should” is used to indicate a recommendation, but not a requirement.

The term “may” is used to indicate an option that is permissible or allowable. The term “required” is used in the guidance to refer to requirements in the standard. “Needs,” “can,” and “cannot” may be used to provide guidance on implementing a requirement or to indicate when an action is or is not possible.

3.3 Requirements 3 Summary of requirements

This standard presents accounting and reporting requirements to help companies prepare a GHG inventory that represents a true and fair account of their scope 3 emissions. Standardized approaches and principles are designed to increase the consistency and transparency of scope 3 inventories.

Table 3.1 provides a list of all the requirements included in this standard. Each requirement is further explained in the following chapters. Requirements are also presented in a box at the beginning of each chapter that contains requirements (chapter 4, chapter 6, chapter 9, and chapter 11).

Table [3.1] List of requirements in this standard



Accounting and

Reporting Principles

Chapter 4

  • GHG accounting and reporting of a scope 3 inventory shall be based on the following principles: relevance, completeness, consistency, transparency, and accuracy.

Setting the Scope 3


Chapter 6

  • Companies shall account for all scope 3 emissions and disclose and justify any exclusions.
  • Companies shall account for emissions from each scope 3 category according to the minimum boundaries listed in table 5.4.
  • Companies shall account for scope 3 emissions of CO2, CH4, N2O, HFCs, PFCs, and SF6, if they are emitted in the value chain.
  • Biogenic CO2 emissions that occur in the value chain shall not be included in the scopes, but shall be included and separately reported in the public report

Setting a GHG

Target and Tracking

Emissions over Time

Chapter 9

When companies choose to track performance or set a reduction target, companies shall:

  • Choose a scope 3 base year and specify their reasons for choosing that particular year;
  • Develop a base year emissions recalculation policy that articulates the basis for any recalculations; and
  • Recalculate base year emissions when significant changes in the company structure or inventory methodology occur.


Chapter 11

Companies shall publicly report the following information:

  • A scope 1 and scope 2 emissions report in conformance with the GHG Protocol Corporate Standard
  • Total scope 3 emissions reported separately by scope 3 category
  • For each scope 3 category, total GHG emissions reported in metric tons of CO2 equivalent, excluding biogenic CO2 emissions and independent of any GHG trades, such as purchases, sales, or transfers of offsets or allowances
  • A list of scope 3 categories and activities included in the inventory
  • A list of scope 3 categories or activities excluded from the inventory with justification of their exclusion
  • Once a base year has been established: the year chosen as the scope 3 base year; the rationale for choosing the base year; the base year emissions recalculation policy; scope 3 emissions by category in the base year, consistent with the base year emissions recalculation policy; and appropriate context for any significant emissions changes that triggered base year emissions recalculations
  • For each scope 3 category, any biogenic CO2 emissions reported separately
  • For each scope 3 category, a description of the types and sources of data, including activity data, emission factors and global warming potential (GWP) values, used to calculate emissions, and a description of the data quality of reported emissions data
  • For each scope 3 category, a description of the methodologies, allocation methods, and assumptions used to calculate scope 3 emissions
  • For each scope 3 category, the percentage of emissions calculated using data obtained from suppliers or other value chain partners

Guidance 4 Accounting and Reporting Principles

As with financial accounting and reporting, generally accepted GHG accounting principles are intended to underpin and guide GHG accounting and reporting to ensure the reported inventory represents a faithful, true, and fair account of a company’s GHG emissions.

The five principles described below are adapted from the GHG Protocol Corporate Standard and are intended to guide the accounting and reporting of a company’s scope 3 inventory.

Requirements in this chapter

GHG accounting and reporting of a scope 3 inventory shall be based on the following principles: relevance, completeness, consistency, transparency, and accuracy.

GHG accounting and reporting of a scope 3 inventory shall be based on the following principles:

  • Relevance: Ensure the GHG inventory appropriately reflects the GHG emissions of the company and serves the decision-making needs of users – both internal and external to the company.
  • Completeness: Account for and report on all GHG emission sources and activities within the inventory boundary. Disclose and justify any specific exclusions.
  • Consistency: Use consistent methodologies to allow for meaningful performance tracking of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.
  • Transparency: Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.
  • Accuracy: Ensure that the quantification of GHG emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable confidence as to the integrity of the reported information.

Guidance for applying the accounting and reporting principles

The primary function of these five principles is to guide the implementation of the GHG Protocol Scope 3 Standard and the assurance of the scope 3 inventory, particularly when application of the standard in specific situations is ambiguous.

In practice, companies may encounter trade-offs between principles when completing a scope 3 inventory. For example, a company may find that achieving the most complete scope 3 inventory requires using less accurate data, compromising overall accuracy. Conversely, achieving the most accurate scope 3 inventory may require excluding activities with low accuracy, compromising overall completeness.

Companies should balance trade-offs between principles depending on their individual business goals (see chapter 2 for more information). For example, tracking performance toward a specific scope 3 reduction target may require more accurate data. Over time, as the accuracy and completeness of scope 3 GHG data increases, the trade-off between these accounting principles will likely diminish.


A relevant GHG report contains the information that users – both internal and external to the company – need for their decision making. Companies should use the principle of relevance when determining whether to exclude any activities from the inventory boundary (see description of “Completeness” below).

Companies should also use the principle of relevance as a guide when selecting data sources. Companies should collect data of sufficient quality to ensure that the inventory is relevant (i.e., that it appropriately reflects the GHG emissions of the company and serves the decision-making needs of users).

Selection of data sources depends on a company’s individual business goals. More information on relevance and data collection is provided in chapter 7.


Companies should ensure that the scope 3 inventory appropriately reflects the GHG emissions of the company, and serves the decision-making needs of users, both internal and external to the company. In some situations, companies may be unable to estimate emissions due to a lack of data or other limiting factors.

Companies should not exclude any activities from the scope 3 inventory that would compromise the relevance of the reported inventory. In the case of any exclusions, it is important that all exclusions be documented and justified.

Assurance providers can determine the potential impact and relevance of the exclusion on the overall inventory report. More information on completeness is provided in chapter 6 setting Scope 3 Boundary.


Users of GHG information typically track emissions information over time in order to identify trends and assess the performance of the reporting company. The consistent application of accounting approaches, inventory boundary, and calculation methodologies is essential to producing comparable GHG emissions data over time.

If there are changes to the inventory boundary (e.g., inclusion of previously excluded activities), methods, data, or other factors affecting emission estimates, they need to be transparently documented and justified, and may warrant recalculation of base year emissions. More information on consistency when tracking performance over time is provided in chapter 9.


Transparency relates to the degree to which information on the processes, procedures, assumptions and limitations of the GHG inventory are disclosed in a clear, factual, neutral, and understandable manner based on clear documentation (i.e., an audit trail).

Information should be recorded, compiled, and analyzed in a way that enables internal reviewers and external assurance providers to attest to its credibility. Specific exclusions need to be clearly identified and justified, assumptions disclosed, and appropriate references provided for the methodologies applied and the data sources used.

The information should be sufficient to enable a party external to the inventory process to derive the same results if provided with the same source data. A transparent report will provide a clear understanding of the relevant issues and a meaningful assessment of emissions performance of the company’s scope 3 activities. More information on reporting is provided in chapter 11 Reporting.


Data should be sufficiently accurate to enable intended users to make decisions with reasonable confidence that the reported information is credible. It is important that any estimated data be as accurate as possible to guide the decision-making needs of the company and ensure that the GHG inventory is relevant.

GHG measurements, estimates, or calculations should be systemically neither over nor under the actual emissions value, as far as can be judged. Companies should reduce uncertainties in the quantification process as far as practicable and ensure the data are sufficiently accurate to serve decision-making needs.

Reporting on measures taken to ensure accuracy and improve accuracy over time can help promote credibility and enhance transparency. More information on accuracy when collecting data is provided in chapter 7.

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