The entry into force of the CSRD (Corporate Sustainability Reporting Directive) has put forward numerous acronyms and standards that are now required of CSR departments, one of them at the top of climate compliance: the GHG Protocol.

If you thought that a simple approximate Excel file would suffice to assess the carbon impact of your business, regulatory reality now requires much more rigor. CSRD requires accurate, auditable and standardized carbon accounting. This is exactly where the GHG Protocol comes in.

In this article, we will decipher together what the GHG Protocol is, how its famous “Scopes” work, and above all, how to implement it step by step to be 100% compliant with the CSRD.

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Understanding the foundations of the GHG Protocol

Before delving into the framework, it is essential to understand where this standard comes from and why it has established itself as the gold standard on a global scale.

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What are the origins of the GHG Protocol?

The history of the GHG Protocol (GreenHouse Gas Protocol) is closely linked to global climate awareness. It was adopted in September 2001 under the impetus of two major organizations: the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

At the time, its ambition was to fill a glaring regulatory gap in the implementation of global climate policy. Indeed, while the Kyoto Protocol had identified the greenhouse gases to be reduced, companies lacked a common framework for measuring their emissions. From its first edition,the GHG Protocol has therefore integrated the accounting and reporting of the six main greenhouse gases (GHGs) covered by the Kyoto Protocol., including carbon dioxide (CO2) and methane (CH4).

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What are the main objectives of this methodology?

The central objective of the GHG Protocol is to strengthen the comparability, transparency and credibility of carbon assessment globally.

Concretely, the methodology was designed to achieve several specific goals:

• Establishing international standards: It provides a universally accepted framework for calculating and reporting GHG emissions.
• Guaranteeing a reliable inventory: It helps businesses prepare a true and accurate inventory of their GHG emissions.
• Managing the climate strategy: It produces information to build an effective strategy to manage and reduce GHG emissions.
• Improving data quality: It is based on key principles aimed at ensuring the relevance, completeness, accuracy and transparency of balance sheets.

By adopting this framework, a company ensures that it communicates transparently with its stakeholders (investors, customers, regulators) and structures its climate strategy over time.

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Application of the GHG Protocol: From theory to practice

Understanding the philosophy of the text is good, but applying it in the field requires mastering its internal mechanics. The GHG Protocol is based on a very specific architecture.

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How do the 3 GHG Protocol scopes work?

One of the central concepts of the GHG Protocol is the classification of GHG emissions into three perimeters, called “scopes”. This structuring makes it possible to have an exhaustive vision of the climate impacts of an activity and to identify priority action levers.

• Scope 1 (Direct emissions) : It corresponds to the GHG emissions directly emitted by the activities and installations controlled by the company. This includes, for example, the combustion of fuel in company vehicles or emissions from on-site boilers.
• Scope 2 (Indirect Emissions Related to Energy) : It includes indirect emissions resulting from the production of energy purchased and consumed by the organization, such as electricity, steam, or heating and cooling networks. Importantly, the GHG Protocol has defined several reporting methodologies to follow: “location-based” (based on the energy mix of the local network) and “market-based” (based on the company's power purchase contracts).
• Scope 3 (Other indirect emissions) : It is the largest and most complex perimeter. It includes all other indirect emissions generated throughout the company's value chain, both up and down the line. It is divided into 15 distinct categories that you can find in the illustration below.

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Note that for most companies, scope 3 represents the vast majority of their total emissions.

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How to implement this methodology step by step?

Achieving a carbon footprint in accordance with the GHG Protocol cannot be improvised. It requires method and rigor. Here are the main steps to do this effectively:

• Framework and governance: Before calculating anything, it is necessary to define the limits of the inventory and identify the internal resources available in order to know if the approach requires support and specialized software.
• Data collection: It is the most time-consuming step. The aim is to gather activity data (energy bills, purchase volumes, kilometers travelled) internally, but also by asking your suppliers to estimate the emissions associated with the goods and services purchased.
• Calculation and interpretation: Once the data is collected, emission factors are applied to them to obtain tons of CO2 equivalent. The emission factors come from recognized databases, such as: Impreinte® Base (ADEME), ecoinvent® base, Base negabyte, INIES base.
• Definition of objectives: The results obtained make it possible to set reduction objectives aligned with international climate trajectories and to build a targeted action plan.

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Link with the CSRD: A strict regulatory obligation

While the GHG Protocol has long been adopted on a voluntary basis, the arrival of CSRD is radically changing the situation. Carbon accounting is becoming a legal compliance exercise subject to audit.

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Why is the GHG Protocol essential in the context of CSRD?

The CSRD Directive aims to ensure that companies publish sustainability information that is reliable, comparable and relevant. To do this, it relies on the ESRS standards (European Sustainability Reporting Standards) developed by EFRAG.

The standard specifically dedicated to climate, the ESRS E1, has directly adopted and integrated the GHG Protocol as a technical framework. In other words, the CSRD requires you to publish your GHG emissions reports according to the GHG Protocol methodology. Alignment with this protocol ensures overall consistency, making the statements of European companies comparable and reliable for investors.

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What are the specific obligations associated with the ESRS E1 standard?

The ESRS E1 standard is often considered to be the most demanding of the new European standard. It imposes total transparency on the company's climate strategy.

Here are the major requirements dictated by this standard:

• Extensive reporting of the 3 scopes: The CSRD is the first European regulation to make Scope 3 reporting completely mandatory, which represents a major challenge in terms of data collection.
• Objectives aligned with science: The company is strongly encouraged to demonstrate that its GHG emissions reduction goals are compatible with limiting global warming to 1.5°C, in accordance with the Paris Agreement.
• Transparency on energy: ESRS E1 requires the publication of total energy consumption (in MWh), with a strict separation between renewable and non-renewable sources (oil, gas, coal, nuclear).

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How to adapt your carbon footprint to the GHG Protocol methodology?

If you have already completed a Bilan Carbone® Or a BEGES (methodologies that are specifically French), rest assured: you have an excellent working base. However, to align yourself with the GHG Protocol, some accounting adjustments are necessary.

The main differences are due to technical details. For example, while French standards smooth out the carbon weight of your fixed assets (such as the purchase of machines or buildings) via a depreciation system over several years, the GHG Protocol does not practice this amortization. All emissions must be recorded in the year of acquisition. In addition, the emissions related to the movements of your customers and visitors, which are mandatory as part of a traditional Carbon Assessment, become simple options under the lens of the GHG Protocol.

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Conclusion

In conclusion, the GHG Protocol is no longer a simple framework reserved for pioneer CSR departments. With the advent of CSRD and the ESRS E1, mastering its 3 scopes according to the GHG Protocol methodology is becoming a strategic and legal emergency for your company.

Don't let technical complexity get in the way of compliance. Book an exchange with one of our Kiosk experts to carry out a diagnosis of your situation!

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Sources

1. GHG Protocol : https://ghgprotocol.org/

2. Carbon Assessment in France : https://mission-transition-ecologique.beta.gouv.fr/projets-entreprise/bilan-ges

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