GHG PROTOCOL SCOPES 1, 2 & 3
corporate standard calculation & audit manual
Complete technical specification for corporate greenhouse gas accounting under the Greenhouse Gas Protocol Corporate Standard, covering direct emissions, dual-reporting Scope 2, and all 15 value chain categories.
1. GHG Protocol Corporate Standard Overview
Established jointly by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), the GHG Protocol Corporate Standard is the universal benchmark for greenhouse gas accounting. It classifies corporate greenhouse gases into seven targeted gases: Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), Sulphur Hexafluoride (SF6), and Nitrogen Trifluoride (NF3).
Scope 1: Direct
Emissions from sources owned or controlled by the reporting organization (boilers, furnaces, vehicles, chemical reactions).
Scope 2: Energy Indirect
Emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the organization.
Scope 3: Value Chain
All other indirect emissions occurring across the upstream supply chain and downstream product use (15 categories).
2. Scope 1: Direct Greenhouse Gas Emissions
Scope 1 emissions arise from physical operational assets within the company's organizational boundary (defined by Operational Control, Financial Control, or Equity Share). Scope 1 encompasses four distinct source types:
Stationary Combustion
Fuel consumed in fixed industrial equipment such as boilers, furnaces, gas turbines, incinerators, and diesel backup generators.
Mobile Combustion
Combustion of fuels in owned or commercially leased vehicles, commercial fleets, corporate aircraft, and marine vessels.
Process Emissions
Physical or chemical transformations in industrial processes (e.g., calcination of limestone to clinker in cement manufacturing, CO2 release in ammonia synthesis).
Fugitive Emissions
Intentional or unintentional leakages of greenhouse gases, primarily refrigerant loss (HFCs/PFCs) from HVAC systems, chiller loops, natural gas pipeline joints, and wastewater aeration.
3. Scope 2: Location vs Market-Based Indirect Emissions
Under the GHG Protocol Scope 2 Guidance, enterprises must apply dual reporting:
Location-Based Method
Calculates emissions based on the average carbon intensity of regional electrical grids where energy consumption physically takes place. In India, ZeroCarbon integrates the Central Electricity Authority (CEA) Baseline Database v20.0 factor (0.716 kg CO2/kWh combined margin).
Market-Based Method
Calculates emissions reflecting contractual arrangements: Power Purchase Agreements (PPAs), Energy Attribute Certificates (EACs, I-RECs), green power tariffs, or residual grid mixes where no specific contract exists.
4. Scope 3: The 15 Value Chain Categories
Scope 3 accounts for 75% to 90% of total emissions for most corporate enterprises. The Corporate Value Chain (Scope 3) Accounting and Reporting Standard defines 15 distinct categories:
| Category Number | Category Name | Upstream / Downstream | Data Inputs |
|---|---|---|---|
| Category 1 | Purchased Goods and Services | Upstream | Spend-based EEIO, mass-based cradle-to-gate LCAs |
| Category 2 | Capital Goods | Upstream | Machinery, buildings, equipment purchases amortized/booked |
| Category 3 | Fuel- and Energy-Related Activities | Upstream | Well-to-tank (WTT) extraction, transmission and distribution losses |
| Category 4 | Upstream Transportation and Distribution | Upstream | Tonne-km by road, rail, air, ocean freight |
| Category 5 | Waste Generated in Operations | Upstream | Tonnage sent to landfill, incineration, recycling |
| Category 6 | Business Travel | Upstream | Passenger-km flights, rail journeys, hotel room nights |
| Category 7 | Employee Commuting & Telework | Upstream | Modal commute surveys, remote work power estimates |
| Category 8 | Upstream Leased Assets | Upstream | Assets operated by client not included in Scope 1/2 |
| Category 9 | Downstream Transportation and Distribution | Downstream | Customer delivery logistics paid by 3rd parties |
| Category 10 | Processing of Sold Products | Downstream | Intermediate goods processed by downstream manufacturers |
| Category 11 | Use of Sold Products | Downstream | Direct/indirect lifetime electricity or fuel use |
| Category 12 | End-of-Life Treatment of Sold Products | Downstream | Disposal and recycling impacts of products sold |
| Category 13 | Downstream Leased Assets | Downstream | Owned assets leased to external tenants |
| Category 14 | Franchises | Downstream | Operational emissions of franchisee locations |
| Category 15 | Investments (Financed Emissions) | Downstream | PCAF standard portfolio equity and debt allocations |
5. Calculation Math, GWP & Activity Formulas
Standard Formula:
Emissions (tCO2e) = Activity Data × Emission Factor × GWP / 1000
Where Activity Data represents physical consumption (litres of diesel, kWh of power, passenger-km), the Emission Factor is the coefficient per unit, and Global Warming Potential (GWP) normalizes non-CO2 gases against carbon dioxide over a 100-year timescale in line with IPCC AR6:
- Carbon Dioxide (CO2): GWP = 1.0
- Methane (CH4): GWP = 27.9 (fossil origin: 29.8)
- Nitrous Oxide (N2O): GWP = 273.0
- Refrigerant R-410A: GWP = 2,256.0
- Sulphur Hexafluoride (SF6): GWP = 25,200.0
6. Statutory Alignment (BRSR, CSRD, SEC)
Statutory frameworks worldwide mandate GHG Protocol alignment:
- India (SEBI BRSR Core): Scope 1 & 2 mandatory with reasonable assurance; Scope 3 upstream required for top filers.
- EU (CSRD ESRS E1): All three scopes mandatory with limited assurance moving to reasonable assurance under ISAE 3000.
- US (California SB 253): Scope 1 & 2 compliance begins 2026; Scope 3 required by 2027.
7. Enterprise Automation with ZeroCarbon
ZeroCarbon replaces static spreadsheets with continuous data streaming. Ingest raw meters and ERP entries to generate verified GHG inventories with cryptographic SHA-256 evidence lineages.