EU carbon rules / Regulations / Greenhouse Gas Protocol: Corporate Standard (revised edition)
Organisational and operational boundaries of corporate GHG inventories (Scope 1/2/3)
This regulation applies to:
This entry is a voluntary standards document (the revised Greenhouse Gas Protocol Corporate Standard), not EU legislation.
The following provisions define its scope:
Introduction — applicability of the Corporate Standard
This standard is written primarily from the perspective of a business developing a GHG inventory. However, it applies equally to other types of organizations with operations that give rise to GHG emissions, e.g., NGOs, government agencies, and universities.
Chapter 3 — Setting Organizational Boundaries
In setting organizational boundaries, a company selects an approach for consolidating GHG emissions and then consistently applies the selected approach to define those businesses and operations that constitute the company for the purpose of accounting and reporting GHG emissions.
Reporting in accordance with the GHG Protocol Corporate Standard
The GHG Protocol Initiative encourages the use of the GHG Protocol Corporate Standard by all companies regardless of their experience in preparing a GHG inventory.
| Duty | Trigger | Evidence | Timing |
|---|---|---|---|
| Determine organisational boundaries and choose a consolidation approach Define the operational scope covered by the inventory using the equity share or control approach. | Preparing a corporate GHG inventory | Boundary document, consolidation approach description | In the first year and on boundary changes |
| Define and account for Scope 1 / 2 / 3 emissions Distinguish direct emissions, indirect emissions from purchased electricity and other value chain indirect emissions. | Establishing and maintaining a GHG inventory | Emissions source inventory, scope classification and emission factors | Ongoing |
| Follow the transparency principle and retain an audit trail Record processes, assumptions and limitations so that a third party can reproduce the results from the same source data. | Reporting GHG data | Assumptions and limitations statement, audit trail documentation | Ongoing |
Chapter 3 — setting organizational boundaries: equity share and control
For corporate reporting, two distinct approaches can be used to consolidate GHG emissions: the equity share and the control approaches. Companies shall account for and report their consolidated GHG data according to either the equity share or control approach. Under the equity share approach, a company accounts for GHG emissions from operations according to its share of equity in the operation. Under the control approach, a company accounts for 100 percent of the GHG emissions from operations over which it has control, choosing between the operational control or financial control criteria. — Reference: GHG Protocol Corporate Standard, chapter 3.
Chapter 4 — operational boundaries: Scope 1, Scope 2 and Scope 3
Direct GHG emissions are emissions from sources that are owned or controlled by the company; these are reported as Scope 1. Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions, which are a consequence of the activities of the company but occur from sources not owned or controlled by the company, such as extraction and production of purchased materials and use of sold products. — Reference: GHG Protocol Corporate Standard, chapter 4.
Chapter 1 — the principle of transparency
Transparency relates to the degree to which information on the processes, procedures, assumptions and limitations of the GHG inventory is disclosed in a clear, factual, neutral and understandable manner based on clear documentation and archives (i.e. an audit trail). The information should be sufficient to enable a third party to derive the same results if provided with the same source data; specific exclusions or inclusions need to be clearly identified and justified. — Reference: GHG Protocol Corporate Standard, chapter 1.