GHG Protocol

By 2026, large DACH corporates face a hard deadline: CSRD/ESRS E1 reports are due, auditors are coming, and Scope 3 expectations are rising faster than internal capacity can keep up. The GHG accounting protocol—formally the Greenhouse Gas Protocol—is the global standard for measuring and managing corporate emissions. Developed by the World Resources Institute and the World Business Council for Sustainable Development, it's used by over 92% of Fortune 500 companies responding to CDP and underpins nearly every credible climate disclosure framework, from SBTi targets to ESRS E1 requirements.

This isn't an explainer on "what is the standard?"—it's a practical field manual on how to actually operationalise the GHG Protocol across 30+ entities, under CSRD scrutiny, with limited headcount. You'll leave with a concrete, implementation-ready blueprint you can start rolling out this quarter: from setting boundaries and building data flows to mastering Scope 3, preparing for assurance, and connecting your inventory to high-integrity carbon credits for truly residual emissions.

1. GHG Accounting Protocol 101: Simple Definition and Why It Matters for CSRD

The Greenhouse Gas Protocol (GHG Protocol) is the global standard for measuring and managing corporate greenhouse gas emissions. Co-developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it provides the accounting framework that underpins climate disclosure systems worldwide.

If you're leading sustainability in a large DACH corporate, you already know this isn't optional. In 2023, 97% of disclosing S&P 500 companies reported their emissions to CDP using the GHG Protocol. Over 23,000 companies globally disclosed through CDP that year, representing $67 trillion in market capitalisation. The GHG Protocol has become the de facto corporate ghg accounting protocol, and for good reason: it gives you a consistent, comparable, and auditable way to account for emissions across Scopes 1, 2, and 3.

Here's why it matters now more than ever for DACH corporates. Under CSRD and ESRS E1, large companies must publish sustainability statements for financial years ending in 2024, with reports due in 2025. ESRS E1 explicitly references GHG Protocol scopes and methodologies. Your GHG inventory isn't just a nice-to-have ESG metric anymore. It's the backbone of your CSRD climate disclosure, your SBTi targets, and increasingly, your board and investor conversations. Getting the ghg accounting protocol right means you have a solid foundation for everything else: setting credible targets, tracking progress, and ultimately addressing residual emissions with high-quality carbon credits.

2. From Standard to System: Boundaries, Roles, and Governance Across Your Group

Implementing the GHG Protocol means turning abstract concepts into concrete processes that work across 30, 50, or 100+ entities. The first step is defining your organisational boundary: which operations do you account for, and how?

The GHG Protocol offers two consolidation approaches. Under the equity share approach, you account for emissions according to your percentage ownership of each operation, reflecting your economic interest. Under the control approach, you account for 100% of emissions from operations you control, either financially (authority over financial and operating policies) or operationally (authority to introduce and implement operating policies). Choose the approach that aligns with your financial consolidation and apply it consistently across all entities, joint ventures, and minority holdings.

Once you've defined your organisational boundary, map your operational boundaries: which emissions sources fall into Scope 1 (direct emissions from owned or controlled sources like boilers, vehicles, and process emissions), Scope 2 (purchased electricity, steam, heat, or cooling), and Scope 3 (all other indirect emissions in your value chain, from purchased goods to use of sold products). This mapping must be consistent across all entities so auditors and stakeholders see a unified, coherent picture.

Now comes governance. A robust GHG accounting system needs a lean but clear governance model. In practice, this means a central sustainability team leading the process, with clear RACI (Responsible, Accountable, Consulted, Informed) across finance, procurement, operations, and IT. Assign 'GHG owners' at entity level who are responsible for data submissions and sign-off. Document roles, responsibilities, and escalation paths so that when auditors arrive, they can immediately see who does what and where accountability sits.

This governance structure should be formalised in a steering committee or cross-functional working group that meets quarterly to review data quality, manage base year recalculations, and ensure alignment with evolving CSRD and ESRS E1 requirements.

3. Building a Pragmatic Data Architecture for Scopes 1, 2 and Priority Scope 3

Your GHG accounting protocol lives or dies on data architecture. The goal is to connect activity data sources (meters, fuel invoices, ERP cost centres, procurement systems, travel and logistics tools) to your inventory in a way that is repeatable, auditable, and scalable.

Start with Scope 1. Identify all direct emission sources: stationary combustion (heating fuels, boilers), mobile combustion (company vehicles, leased fleet), fugitive emissions (refrigerants, air conditioning), and process emissions (chemical reactions, industrial processes). Map these to existing data sources: facility management systems for fuel consumption, fleet management systems for vehicle fuel, and procurement records for refrigerant purchases. Establish monthly or quarterly data collection cycles and reconcile totals to financial records where possible.

For Scope 2, you need two numbers: location-based (using average grid emission factors for the regions where you consume electricity) and market-based (reflecting contractual instruments like renewable energy certificates or power purchase agreements). Collect electricity, steam, and cooling consumption data from utility invoices or sub-metering systems, and document all renewable energy contracts and certificates. This dual reporting is mandatory under CSRD and increasingly scrutinised by auditors.

Scope 3 is where most large corporates face the steepest climb. Focus first on a few high-impact categories: purchased goods and services, capital goods, upstream transportation and distribution, business travel, and employee commuting are typically the largest for service and industrial companies. Use spend data from your ERP and procurement systems as a starting point, applying industry-average emission factors. This gives you a rough materiality assessment so you can prioritise where to invest in better data.

Set up a central emission factor library with clear rules for factor hierarchy: supplier-specific data first, then region- or technology-specific factors, then generic industry averages. Version-control this library and document changes so you can explain year-on-year variations to auditors and stakeholders. Align your data collection calendar with financial close (ideally within 60-90 days of year-end) to keep pace with financial reporting and avoid the five- to six-month GHG reporting cycles still common in some sectors.

4. Mastering Scope 3: Screening, Better Data, and Supplier Engagement That Actually Scales

Scope 3 is where the rubber meets the road. A 2024 survey found that 74% of companies feel prepared to disclose Scope 1 emissions, but only 15% feel ready to report Scope 3. If that sounds familiar, you're not alone.

4.1 Scope 3 screening and prioritisation

Start with a materiality screening. Use spend data from procurement and finance systems to model estimated emissions for all 15 Scope 3 categories using industry benchmarks and spend-based emission factors. Rank the categories by estimated emissions and by your ability to influence them. For most large corporates, purchased goods and services, capital goods, and use of sold products will dominate. This screening gives you a defensible rationale for where to focus limited resources.

4.2 Moving from spend-based to better data

Spend-based estimates are a useful starting point, but they're rough. Build a 3- to 5-year roadmap to move high-priority categories up the data quality hierarchy. For purchased goods and services, shift from spend-based factors to activity-based data (tonnes of material, kWh of energy) and then to supplier-specific data where you have leverage. For capital goods, work with suppliers to obtain product-level life-cycle assessments. For downstream use of sold products, refine usage assumptions with actual customer data and product telemetry where available.

4.3 Supplier engagement playbook for DACH multinationals

Supplier engagement is not optional if you want credible Scope 3 data. Look at Deutsche Telekom: recognised as a CDP Supplier Engagement Leader five times, the company engages its top suppliers annually to disclose emissions, targets, and action plans. Scope 3 accounts for more than two-thirds of its total footprint, and in 2023 it set up a task force to prioritise key suppliers by CO₂ relevance.

Here's a practical approach for your organisation. Define criteria to prioritise suppliers: emissions relevance (largest purchased categories or highest-carbon materials) and influence (long-term contracts, strategic partners, high volumes). Standardise your data request using CDP's supply chain programme or a custom questionnaire aligned to the GHG Protocol. Set annual cycles so suppliers know when to expect requests and can build their own reporting processes. Track KPIs like supplier response rate, coverage of emissions by spend, and improvement in data quality year-on-year. Report these metrics to leadership so supplier engagement is treated as a strategic programme, not an ad hoc initiative.

5. Data Quality, Controls, and Audit Readiness Under CSRD/ESRS E1

Under CSRD, large DACH companies will face external assurance over their sustainability statements, starting with limited assurance and moving toward reasonable assurance. That means your GHG inventory must meet audit-grade standards from day one.

5.1 Emission factors, data quality scoring, and uncertainty

Implement a data quality framework aligned with the GHG Protocol's Chapter 7 on inventory quality management. Rate your data along dimensions like accuracy, completeness, consistency, and timeliness. For example, metered electricity consumption from invoices is high accuracy; spend-based estimates for purchased goods are lower. Flag high-uncertainty areas and set improvement targets for the next reporting cycle.

Use a clear emission factor hierarchy: supplier-specific primary data beats region- and technology-specific secondary data, which beats generic industry averages. Document your choices and maintain version control so you can trace any factor back to its source and explain why you used it. When you update factors or methodologies, follow the GHG Protocol's guidance on base year recalculation to maintain comparability over time.

5.2 Controls, documentation, and preparing for assurance

Auditors will test your emissions inventory under ISAE 3000 (or the new ISSA 5000 framework, which replaces ISAE 3410 from December 2026). They will trace reported tonnes back to source documents, reconcile activity data to financial records, and assess the design and operating effectiveness of your controls.

Put in place basic but robust controls: segregation of duties (different people collect, review, and approve data), documented approvals for key assumptions and estimates, change logs for emission factors and methodologies, and regular reconciliations of activity data to financial systems. Store evidence in a central repository: invoices, meter readings, supplier contracts, LCA studies, and methodological memos. This evidence pack should be ready to hand to auditors without scrambling at year-end.

ESRS E1 requires disclosure of gross Scopes 1, 2, and 3, intensity metrics, base year, targets, and transition plans. Your GHG inventory feeds all of this. Design your reporting templates now to produce the numbers ESRS E1 asks for, so you're not retrofitting data structures later.

6. Future-Proofing Your GHG Accounting Protocol and Linking to High-Integrity Carbon Credits

The GHG Protocol is a living standard. Recent and ongoing work includes new guidance on land sector and removals, refined Scope 2 rules, and evolving treatment of carbon credits and compensation claims. Your system needs to flex with these changes without requiring a full rebuild every two years.

Design a flexible data model that can accommodate new emission categories and refined methodologies. For example, if new guidance clarifies how to account for biogenic carbon or carbon removals, your data architecture should have placeholders or modules you can activate without overhauling the entire inventory. Keep your documentation and governance processes modular, too, so you can update specific sections (e.g., factor libraries, consolidation rules) without rewriting everything.

Now, let's talk about carbon credits. The mitigation hierarchy is non-negotiable: reduce emissions first, deeply and structurally, before you compensate anything. A robust GHG Protocol inventory is the foundation for this hierarchy because it tells you exactly what you've reduced, what remains, and what is truly residual and hard-to-abate.

When you reach residual emissions (the final 5-10% that current technology or economics make impractical to eliminate), you can address them with high-integrity carbon credits. But this only works if your inventory is solid, your reductions are real, and your credits meet rigorous standards. Use science-based screening (such as Senken's Sustainability Integrity Index, which evaluates over 600 data points across additionality, permanence, co-benefits, and compliance) to ensure credits deliver genuine impact. Document your credit purchases, retirement, and claims language transparently so they withstand CSRD and Green Claims scrutiny.

EU regulatory signals are clear: greenwashing is a liability. The Empowering Consumers Directive and Green Claims Directive require explicit, verifiable evidence for environmental claims. Companies that use low-quality credits or make vague 'carbon neutral' claims without clear disclosure face reputational damage and regulatory penalties. By anchoring your compensation strategy in a credible, protocol-aligned GHG inventory and rigorous credit due diligence, you protect your organisation from these risks.

In practical terms, this means treating carbon credits outside the core inventory as a separate, clearly labelled compensation activity for residual emissions. Report the credits separately in your CSRD sustainability statement, explain what they compensate for, and show how they fit within your overall mitigation hierarchy and transition plan. This transparency is what regulators, auditors, and investors now expect.