The GHG Methodology

The methodology “Greenhous Gas Protocol” is adopted by 86% of the companies listed in the “Fortune 500” list.


The Greenhouse Gas Protocol is a methodology developed in 2001 by WRI (World Resources Institute), a U.S.–based environmental NGO together with WBCSD (World Business Council for Sustainable Development) a Geneva-based coalition of 170 international companies. Today it is the most widely used international accounting tool for governments and business leaders to understand, quantify and manage Greenhouse emissions.


GHG accounting and reporting shall be based on the following 5 principles:

  1. 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).
  2. COMPLETENESS (Account for and report on all GHG emission sources and activities within the chosen inventory boundary. Disclose and justify any specific exclusions.
  3. CONSISTENCY (Use consistent methodologies to allow for meaningful comparison of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series).
  4. TRANSPARENCY (Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate reference to the accounting and calculation methodologies and data sources used).
  5. ACCURACY (Ensure that the quantification of GHG emissions is systematically neither over nor under the 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 assurance as to the integrity of the reported information).


The GHG Protocol accounts for direct emissions, i.e., emissions form sources that are owned or controlled by the company and indirect emissions which are a consequence of the activities of the company but occur at sources owned or controlled by another company.

In order to delineate direct and indirect emissions three scopes were defined to account for GHG emissions:


Scope 1: Direct GHG emissions

Direct GHG emissions occur from sources owned or controlled by the reporting company. These include emissions from combustion in boilers, furnaces, vehicles, as well as fugitive gases and emissions from chemical production in process equipment.


Scope 2: Electricity indirect GHG emissions

Scope 2 accounts for indirect GHG emissions from generation of purchased electricity consumed by the reporting company. Scope 2 emissions occur physically at the facility where electricity is generated.


Scope 3: Other indirect GHG emissions

Scope 3 emissions are a consequence of the activities of the reporting company but occur from sources not owned or controlled by it and represent an optional reporting category. Basically Scope 3 allows for the treatment of all other indirect emissions and can be divided in upstream (e.g., from purchased goods and services, upstream transportation and distribution, business travel, employee commuting, etc.) and downstream emissions (e.g. downstream transportation and distribution, processing of sold products, end-of-life treatment of sold products, etc.).