The GHG Protocol Explained: Why It's the Global Standard for Carbon Measurement

The Greenhouse Gas (GHG) Protocol is the most widely used international accounting standard for greenhouse gas emissions. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it provides the methodology that underpins BRSR reporting, CCTS compliance, and virtually every major corporate climate framework — from CDP to TCFD to SBTi. Understanding the GHG Protocol is not optional for any Indian company serious about ESG.

The Corporate Standard: The Foundation of Corporate Carbon Accounting

The GHG Protocol Corporate Accounting and Reporting Standard is the primary framework for measuring and reporting a company's emissions. It establishes the three-scope framework (Scope 1, 2, and 3) that is now universal in corporate sustainability reporting. It defines how to set organisational boundaries, choose measurement methodologies, select emission factors, and handle biogenic emissions. The Corporate Standard has been used by over 90% of Fortune 500 companies and is explicitly referenced in India's BRSR framework as the acceptable methodology for Scope 1 and Scope 2 disclosure.

Scope 2 Guidance: Market-Based vs Location-Based

One of the most important distinctions in GHG Protocol Scope 2 accounting is between location-based and market-based methods. The location-based method uses the average emission factor for the electricity grid in the geographic location where consumption occurs — for India, this is the CEA's national or state-level grid emission factor. The market-based method uses the emission factor from the specific electricity contract or certificate the company has purchased — for example, if a company buys renewable energy through an I-REC, its market-based Scope 2 emissions for that electricity would be zero. Companies that invest in renewable energy or purchase I-RECs should report both figures, as this demonstrates the impact of their procurement decisions.

The Scope 3 Standard and Value Chain Emissions

The GHG Protocol Scope 3 Standard categorises value chain emissions into 15 categories across upstream (supplier) and downstream (customer) activities. For most companies, Scope 3 emissions dwarf Scope 1 and 2 combined. Calculating Scope 3 requires a different methodology to Scope 1 and 2 — because you cannot directly meter emissions outside your own operations, you rely on supplier data, spend-based estimates, or industry average emission factors. Indian companies under BRSR pressure are increasingly required to assess and disclose their most material Scope 3 categories, particularly purchased goods and services (Category 1) and use of sold products (Category 11).