What is the GHG Protocol?

The Greenhouse Gas (GHG) Protocol is the world’s most widely used framework for measuring and managing greenhouse gas emissions. Developed in partnership by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it was first launched in 2001 and has since become the global standard for corporate carbon accounting.

At its core, the GHG Protocol provides a common language for climate impact. Just as financial accounting standards allow businesses to consistently track and report financial performance, the GHG Protocol offers rules and guidance for quantifying emissions. This ensures that results are transparent, comparable, and credible across industries, regions, and reporting programs.

The framework covers the six greenhouse gases recognized by the Kyoto Protocol—carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF₆). To make sense of where emissions come from, the Protocol introduced the now universally adopted concept of Scopes 1, 2, and 3.

Scope 1: Direct Emissions

Scope 1 includes all greenhouse gas emissions that come directly from sources a company owns or controls. These are the most straightforward to measure because they happen inside the organization’s own boundaries.

Typical examples include:

• Fuel burned in company-owned vehicles.
• On-site combustion in boilers, furnaces, or turbines.
• Process emissions from chemical production or manufacturing equipment.

Shortly: If your company controls the source of the emissions, they fall into Scope 1.

Scope 2: Indirect Energy Emissions

Scope 2 covers indirect emissions from the generation of purchased energy that the company consumes. Even though the emissions happen at the power plant (not on company premises), they are attributed to the company that uses the energy.

This typically includes:

• Purchased electricity.
• Purchased heat, steam, or cooling.

Scope 3: Value Chain Emissions

Scope 3 is the broadest category, capturing all other indirect emissions that occur outside a company’s direct operations, but because of its activities both upstream and downstream in the company’s value-chain.

• Upstream: purchased goods and services, capital goods, transportation, waste, business travel, employee commuting.
• Downstream: product use, end-of-life treatment, downstream transport, investments, and franchises.

To bring structure to this complexity, the GHG Protocol defines 15 Scope 3 categories. These are also the categories used in the VSME report:

• Purchased goods and services
• Capital goods
• Fuel- and energy-related activities (not included in Scope 1 or 2)
• Upstream transportation and distribution
• Waste generated in operations
• Business travel
• Employee commuting
• Upstream leased assets
• Downstream transportation and distribution
• Processing of sold products
• Use of sold products
• End-of-life treatment of sold products
• Downstream leased assets
• Franchises
• Investments

These categories ensure a consistent way of reporting and help companies identify where their most significant value chain impacts occur. For some organizations, only a few categories may be material, while for others, especially manufacturers and retailers, Scope 3 can cover the vast majority of total emissions.

Because Scope 3 extends across the supply chain and product lifecycle, it requires collaboration with suppliers, customers, and partners to measure and reduce.

With Aila’s CO₂ calculator, carbon accounting is easy and transparent

We launched Aila’s CO₂ calculator to make corporate carbon accounting easier and to complement Aila’s VSME reporting tool. With Aila’s calculator and its ready-to-use emission factors, calculating emissions according to the GHG Protocol is both easy and transparent.

You can start using Aila's CO₂ calculator today!