CSRD and the Greenhouse Gas (GHG) protocol

The CSRD ESRS E1 on climate change highly relates to the GHG Protocol, so a further understanding of the GHG protocol helps to understand the ESRS E1.
The GHG Protocol is an international accounting tool for quantifying, managing and reporting greenhouse gas (GHG) emissions. It is a set of standards for organizations in the private as well as the public sector. It is applied by thousands of companies worldwide.
The standard is defined in three documents:

  • the GHG Protocol Corporate Standard revised
  • the GHG Protocol Scope 2 Guidance
  • the GHG Protocol Corporate Value Chain (Scope 3) Standard

Scope 1 emissions are direct emissions from a production facility and offices, plus transport by company owned passenger cars and trucks
Scope 2 emissions are indirect emissions from purchased electricity
Scope 3 emissions is from a list of purchased materials, products, and transport, as given in Table 8.2.

The GHG Protocol organization (WRI and WBCSD) also developed a guidance for LCA, the Product Life  Cycle Accounting Reporting Standard, based on PAS 2050 and the LCA Handbook of the JRC (a comprehensive guidance based on the ISO 14040 and 14044).  Basically it is all the same, but GHG Protocol has the language of business people and financial accountants. However, this LCA guide is not widely used.
From the GHG Protocol:
quote “The Corporate Value Chain (Scope 3) Standard accounts for emissions at the corporate level, while the Product Standard accounts for emissions at the individual product level. The Corporate Value Chain (Scope 3) Standard helps companies 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. Together with the GHG Protocol Corporate Standard, the three standards provide a comprehensive approach to value chain GHG measurement and management” unquote


Approximately 60% of the Fortune 500 companies use the GHG Protocol (derived from the CDP listing), so it is well accepted. But let’s be realistic: despite this high percentage of companies, the impact on reducing greenhouse gas emissions on global level is still extremely small. One of the reasons is that most of the companies apply only the “low hanging fruit” of Guarantees of Origin (GOs) or Renewable Energy Certificates (RECs), or other carbon offsets, to reduce their administrative emissions in the accounting system. Such tricks are just window dressing. For a detailed explanation, see the webpage on GOs and RECs.