What is the Greenhouse Gas Inventory Protocol (GHG Protocol) 

The Greenhouse Gas Protocol (GHG Protocol) is currently the most widely adopted enterprise and organizational level greenhouse gas accounting and reporting standard in the world. It provides a comprehensive international framework for quantifying, managing, and reporting greenhouse gas emissions. The agreement was jointly developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). 

Methodology Evolution

 Since its release in 1998, the GHG Protocol has undergone several updates and expansions to adapt to changing climate policy needs and corporate practices. It has evolved from the initial enterprise standard into a set of guidelines and tools including enterprise standards, product lifecycle assessment, supply chain (Scope 3) accounting, and project accounting. 

Guidelines and Indicators

 The GHG Protocol standard is mainly divided into the following parts: 

• Corporate Standard: Provides guiding principles and best practices to help companies quantify and report their direct (Scope 1) and indirect (Scope 2) emissions.

•  Corporate Value Chain (Scope 3) Standard: Expands the corporate standard to include guidelines for accounting and reporting indirect emissions in an organization's value chain. 

• Product Life Cycle Standard: Provides methodology to help organizations assess greenhouse gas emissions throughout the cradle-to-grave life cycle of their products or services. 

• Policy and Action Standard: A guide designed to assess the impact of specific policies or actions on greenhouse gas emission reductions. 

The core principles of GHG Protocol include transparency, consistency, accuracy, integrity, and relevancy. 

1. Relevance: Decide which emission sources to include based on the needs of the intended users. 

2. Completeness: Covers all relevant emissions and removals. 

3. Consistency: To ensure meaningful comparisons, the same calculation method should be used for different years of inventory. 

4. Accuracy: Reduce bias and uncertainty, and do not overestimate or underestimate emissions. 

5. Transparency: Full disclosure allows users to make reasonable and trustworthy decisions. 

It not only provides a clear framework for businesses to calculate and report greenhouse gas emissions, but also provides a basis for governments, NGOs, and other institutions to evaluate and report on the effectiveness of emission reduction. As the issue of climate change becomes increasingly severe, the GHG Protocol, as the gold standard for greenhouse gas emissions inventory and reporting, has played a pivotal role in driving global emission reduction actions. By implementing the GHG Protocol, organizations can not only better understand and manage their contributions to climate change but also demonstrate leadership in global carbon reduction efforts. 

According to the GHG Protocol, greenhouse gas emissions are classified into three categories: Scope 1, Scope 2, and Scope 3. The following is an explanation of Scope 1 and Scope 2 (please refer to the table GHG Protocol Emission Scopes and Categories Overview): 

(1) Scope 1: 

Direct Emissions 

• Definition: Scope 1 emissions refer to greenhouse gas emissions that are directly released into the atmosphere from sources owned or controlled by the organization. These emission sources include, but are not limited to, the organization's production processes, the company's fleet, and fuel-burning heating equipment.

•  Calculation: Scope 1 emissions calculations require organizations to collect data on the direct combustion of fossil fuels (e.g., natural gas, diesel, gasoline, etc.), as well as process emissions from their operations (e.g., CO2 emissions directly generated during manufacturing). Emissions are then calculated based on fuel type and consumption using the emission factors provided by the GHG Protocol. 

(2) Scope 2: 

Indirect Energy Emissions

•  Definition: Scope 2 emissions refer to greenhouse gas emissions indirectly generated during the electricity, steam, heating and cooling processes purchased and consumed by an organization. Although these emissions are not directly generated by the organization, they are counted as indirect emissions of the organization because greenhouse gases are released during the production of energy. 

• Calculation method: Calculating Scope 2 emissions requires collecting data on the amount of electricity and other forms of energy consumed by the organization and applying the corresponding emission factors. Emission factors are typically based on the emission density generated by mixed electricity provided by energy suppliers, or grid emission factors in a particular country. 

Importance of Accounting for Scope 1 and 2 Emissions 

• Reduction Strategies: Accurate accounting of Scope 1 and Scope 2 emissions is the basis for formulating effective emission reduction strategies. Understanding the sources and scales of these emissions can help organizations identify opportunities for emission reduction, such as improving energy efficiency, shifting to renewable energy sources, and optimizing operational processes.

•  Reporting and Communication: Accurate emissions data supports organizations in providing transparent and credible information in sustainability reporting, helping to build trust with the public and stakeholders while meeting increasing environmental regulations and policy requirements. 

Accounting for Scope 1 and Scope 2 emissions is not only a critical part of assessing an organization's carbon footprint benchmark, but also the basis for achieving greenhouse gas emissions reductions and strengthening climate action commitments. 

According to the GHG Protocol standard, Scope 3 emissions are subdivided into 15 categories, which are indirect emissions generated by an organization outside of its direct operational scope, which are typically caused by an organization's supply chain activities. (also known as the value chain). The following is a detailed explanation and accounting method for these 15 categories: 

15 categories of Scope 3 

1.Category 1: 

Purchased Goods and Services

• Definition: Covers all indirect emissions from the production of goods and services purchased from suppliers. 

• Calculation method: Estimated through emission data provided by suppliers or industry average emission factors. 

2.Category 2: 

    Capital Goods (Capital Goods) 

• Definition: Emissions from fixed assets such as buildings, machinery, and equipment during their life cycle. 

• Calculation: It can be estimated based on the value of the capital goods purchased and the industry-specific emission factor. 

3.Category 3: 

     Fuel- and Energy-related Activities Not Included in Scope 1 or Scope 2

•  Definition: Refers to the emissions of energy purchased by a producer in the process of providing energy, and the energy purchased for production (excluding electricity, steam, heating and cooling) and indirect emissions. Calculation method: 

• Calculate the associated emissions based on energy consumption and emission factors. 

4.Category 4: 

   Upstream Transportation and Distribution 

• Definition: Involves the process of transporting raw materials and products from suppliers to organizations, covering emissions generated during the transportation of raw materials and goods to organizations. 

• Calculation Method: Calculated based on the distance and mode of transportation (e.g., air, sea, road) using specific emission factors. 

5.Category 5: 

  Waste Generated in Operations 

• Definition: Emissions related to the waste generated and disposed of in the course of an organization's operations. 

• Calculation Method: Estimates based on the type of waste and disposal methods (e.g., landfill, incineration, recycling). 

6.Category 6: 

  Business Travel 

• Definition:Greenhouse gas emissions from all travel activities carried out by employees for business purposes. 

• Calculation method: Based on the distance traveled and mode of transportation, calculated using industry emission factors. 

7.Category 7: 

    Employee Commuting 

• Definition: Emissions generated by employees' commuting activities from home to work. 

• Calculation: Survey employee commuting methods and distances, estimating using relevant emission factors. 

8.Category 8: 

  Leased Assets (Upstream) 

• Definition: Emissions generated during use of assets leased by an organization to others.

•  Calculation: Estimate emissions based on energy consumption and operational activities used by assets. 

9.Category 9:

   Downstream Transportation and Distribution 

• Definition: Emissions generated during the transportation and distribution of products after they are sold to end consumers. 

• Calculation method: Calculation based on the mode and distance of product transportation, applying appropriate emission factors. 

10.Category 10: 

   Processing of sold products 

• Definition: Emissions generated by further processing of products sold by the entity during the reporting year. 

• Calculation method: Emissions generated during the processing of products using the average data method or site-specific method. 

11.Category 11: 

  Use of Sold Products 

• Definition: Emissions generated by consumers or businesses using an organization's sold products. 

• Calculation method: Calculated based on energy consumption and emission factors during product use. 

12.Category 12:

   End-of-Life Treatment of Sold Products 

• Definition: Emissions generated during the disposal of products after consumer use, such as landfill or recycling. 

• Calculation method: Estimate the emissions generated during the product disposal process, which can include landfill, incineration, and other methods. 

13.Category 13:

    Leased Assets (Downstream) 

• Definition: Emissions generated during the use of assets leased by an organization from other parties. 

• Calculation Method: Calculate energy consumption and associated emissions during the use of leased assets. 

14.Category 14: 

   Franchises 

• Definition: emissions generated from business activities operated through a franchise agreement. 

• Calculation: Estimate emissions based on energy usage and operational data from the franchise business. 

15.Category 15:

•    Definition of Investments : refers to indirect emissions caused by an organization's impact on external projects or companies through its investment and financing activities.

•  Calculation method: Based on the scale of investment and financing activities and their share in specific industries or projects, the market share or equity share method is used to estimate emissions. 

The above is the detailed explanation and accounting method for the 15 categories of Scope 3 under the GHG Protocol standard. With a deep understanding of these categories and precise accounting, organizations can comprehensively assess indirect greenhouse gas emissions within their value chain, leading to more effective formulation and implementation of emission reduction strategies. 

Organizational carbon inventoryIf the organizational base year emissions are conducted in accordance with the GHG protocol standard standard? How should each step be performed? 

(1) The GHG Protocol standard mainly meets the needs of enterprises

1. for voluntary greenhouse gas inventory and reporting

• aiming to establish unified regulations at the enterprise level, 

• help enterprises quantify and disclose greenhouse gas emissions ,

•  provide a basis for enterprises to formulate emission reduction strategies 

2.NGOs and civil society groups

•  have more flexible inventory needs,

• and there is no compulsory certification requirement to provide NGOs with a common inventory methodology 

3.The harmonization of greenhouse gas management needs by multinational corporations and supply chain partners 

• serves as a common language within and outside the business

• facilitating communication among different stakeholders 

(2) The ISO 14064-1 standard mainly satisfies: 

1.the compliance of government agencies and enterprises 

• The need for greenhouse gas inventory has the legal status of an international standard 

• and is mandatory in many countries 

2.The requirements standards for organizations seeking third-party certification 

• clearly define the requirements and processes for certification

• enhancing the credibility of inventory results 

3.greenhouse gas inventory needs at the project level or in emerging industries 

• In addition to the organizational level, it also covers the project level inventory requirements 

• that can be applied to inventory practices in emerging industries 

Therefore, GHG Protocol is more suitable for the needs of enterprises that voluntarily participate and coordinate management; ISO 14064-1, on the other hand, is more suitable for compliance inventory, compulsory certification, and project-level inventory needs. The two play different roles in different scenarios. 

The GHG Protocol standard is mandated by the Science Based Targets initiative (SBTI). 

SBTI is an initiative initiated by several international organizations to promote companies to set science-based greenhouse gas emission reduction targets to achieve the goal of controlling climate change. Companies participating in the SBTI need to conduct Scope 1, 2, and 3 greenhouse gas emission inventories in accordance with the GHG Protocol, identify emission hotspots, and formulate emission reduction targets that meet the 1.5 and 2°C warming control targets accordingly. Therefore, the GHG Protocol standard not only meets the needs of companies for voluntary greenhouse gas inventory and reporting, but also becomes a key inventory methodology required by the SBTI initiative. By adopting the GHG Protocol, companies can better respond to SBTIs, linking emission reduction targets to global goal of controlling warming, and providing a scientific basis for corporate climate action. 

Why does the Science Based Targets initiative (SBTi) mandate participating companies to conduct greenhouse gas inventories in accordance with the GHG Protocol standard? 

(1) Origin and Objectives of SBTi 

SBTi is a climate action initiative for businesses jointly launched by the Carbon Disclosure Project (CDP), the World Resources Institute (WRI), the World Wide Fund for Nature (WWF) and the United Nations Global Compact in 2015. It aims to push companies to set greenhouse gas reduction targets based on the latest climate science to achieve the Paris Agreement's goal of limiting global average temperature rise to 2°C and working towards limiting warming to 1.5°C. The SBTi believes that companies, as important sources of greenhouse gas emissions, should bear corresponding responsibilities and actions. By setting science-based emission reduction targets, companies can align their development plans with global climate goals and contribute to achieving the "zero carbon" vision. So far, more than 3,000 companies have pledged to participate in the SBTi and set emission reduction targets. 

(2) Why is the adoption of GHG Protocol mandatory? 

The reason why SBTi mandates that participating companies must conduct greenhouse gas inventories in accordance with the GHG Protocol is mainly based on the following considerations:

 1. Unified, transparent, and comparable The GHG Protocol provides unified specifications and methodologies for enterprise-level greenhouse gas inventories. It clearly defines key concepts such as scope, boundaries, emission sources, and quantitative methods, making the company's inventory results comparable. This helps the SBTi fairly assess the emission reduction potential and actions of different companies.

 2. Comprehensiveness and Integrity The GHG Protocol requires companies to quantify Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased electricity and heat), and Scope 3 (other indirect emissions) of greenhouse gas emissions. This comprehensiveness ensures that companies can grasp their carbon footprint in a panoramic manner, laying the foundation for setting effective emission reduction targets. 

3. Trusted Technical Support As an initiative jointly launched by the World Resources Institute and the World Business Council for Sustainable Development, GHG Protocol has been recognized and supported by numerous governments, businesses, and non-profit organizations. Its methodology has been tested and refined by long-term practice and is recognized as an authoritative standard for greenhouse gas inventory at the enterprise level. 

4. Integration with Existing Enterprise Systems Many large enterprises have adopted the GHG Protocol standard in their carbon management systems. Requiring companies participating in the SBTi to conduct inventory according to the same standards can avoid duplication of work and reduce additional costs and burdens. 

5. Prepare for long-term target management In addition to setting near-term emission reduction targets, the SBTi also encourages companies to set long-term "net-zero" targets. The GHG Protocol standard establishes a continuous greenhouse gas inventory and reporting system for enterprises, laying the foundation for the management and tracking of long-term goals. 

(3) Inventory process requirements

 For companies participating in SBTi, the main processes for conducting greenhouse gas inventories in accordance with the GHG Protocol include: 

1.Defining organizational boundaries and operational boundaries According to the specifications of the GHG Protocol, clearly determine the organizational boundaries (equity control, financial control, or operational control) and operational boundaries (including which greenhouse gas emission sources) of the enterprise are clearly determined. 

2.Collect relevant activity data Collect activity data related to greenhouse gas emissions, such as fuel and electricity usage, process emissions data, fugitive emissions data, etc., as the basis for emissions calculation. 

3.Choose the right emission factor According to the GHG Protocol's guidelines, select the appropriate emission factor for your business operations to convert activity data into greenhouse gas emissions. 

4.Application of Calculation Tools and Methods Utilize the calculation tools and methods provided by the GHG Protocol to quantify total greenhouse gas emissions in Scope 1, 2, and 3, respectively. 

5.Preparation of Greenhouse Gas Inventory Reports In accordance with the reporting requirements of the GHG Protocol, compile annual greenhouse gas inventory reports, disclosing key information such as inventory boundaries, emission sources, emission data, and uncertainty assessments. 

6.While obtaining third-party verification is not mandatory, the SBTi encourages companies to invite third-party verification bodies to verify inventory report data in accordance with the GHG Protocol's verification standards and procedures to enhance credibility. 

In general, the reason why SBTi mandates participating companies to adopt the GHG Protocol for inventory is that it provides a unified, transparent, complete, trustworthy, and international standard method for corporate greenhouse gas inventory. By following the GHG Protocol, companies can accurately quantify their carbon footprint, laying the foundation for setting science-based emission reduction targets and aligning with global climate goals. While there is some workload in the process, it will help businesses in their carbon management and "net-zero" transition in the long run. 

Participating in the Science Based Targets initiative (SBTi) is an important step in corporate sustainability and climate change action. The following is a brief overview of the process, including the introduction of the system, the application process for obtaining the mark and certification, the review process, and the annual report, and explaining its relevance to the Greenhouse Gas Protocol (GHG Protocol) standard inventory. 

The Science Based Targets initiative (SBTi) is an important step in corporate sustainability and climate change action. The following is a brief overview of the process, including the introduction of the system, the application process for obtaining the mark and certification, the review process, and the annual report, and explaining its relevance to the Greenhouse Gas Protocol (GHG Protocol) standard inventory. The SBTi provides guidance and solutions for companies to set science-based emissions reduction targets, aiming to help them combat climate change by reducing greenhouse gas (GHG) emissions. For SMEs, the SBTi provides a streamlined path to participation, making it easier to set, implement, and report on emission reduction targets. 

Obtaining the SBTi logo and verifying the application process :

1.Preparation stage: SMEs first need to conduct an inventory of greenhouse gas emissions according to the GHG Protocol standards, including direct emissions (Scope 1) and indirect emissions (Scope 2 and Scope 3). 

2.Submit Reduction Targets: Businesses formally express their willingness to participate in the initiative and their short- and long-term (net-zero) targets by filling out the SBTi's online form.

3. Set goals: Based on the characteristics of your own business and the results of your emission inventory, set scientific emission reduction targets that meet the 1.5°C global warming limit target. 

4.Application for verification: Submit the set emission reduction target and related calculations and data to the SBTi to apply for official verification of the target. 

Review Process 

1.Initial Assessment: The SBTi conducts an initial assessment of the submitted materials, confirming their completeness and compliance. 

2.Professional Review: After an initial assessment, SBTi's experts will conduct an in-depth review of the objectives, potentially requesting additional information or revisions from the business. 

3.Verification Approval: Once the target passes professional review, the business receives formal approval from the SBTi and can receive a logo demonstrating its commitment. 

Annual Report 

1.Progress Tracking: Businesses are required to regularly track and calculate their greenhouse gas emissions in accordance with GHG Protocol standards. 

2.Report Submission: Each year, companies are required to submit a progress report to the SBTi, detailing their progress and implementation of emission reduction targets. 

Relevance of SBTi and GHG Protocol 

The accounting and verification process of the SBTi is conducted in strict accordance with the standards of the GHG Protocol, ensuring that the emission reduction targets set by companies are both ambitious and scientifically feasible. The GHG Protocol provides a general framework and methodology for corporate greenhouse gas inventory, helping companies accurately calculate and report their greenhouse gas emissions. In this way, the SBTi ensures that participating companies' emissions reduction targets are aligned with global efforts to mitigate climate change and promotes companies to support global net-zero emissions targets through tangible actions. 

The accounting and verification process of SBTi is strictly in accordance with the standards of the GHG Protocol, please explain in detail how to inventory emissions in accordance with the GHG protocol standard when implementing SBT science-based reduction targets. 

When setting science-based emission reduction targets (SBTs), companies need to conduct greenhouse gas emission inventory in accordance with Greenhouse Gas Protocol (GHG Protocol) standards to ensure that the set emission reduction targets are both scientific and feasible. Here are the steps to conduct a greenhouse gas emissions inventory in accordance with the GHG Protocol standard: 

1.Determining organizational boundaries 

First, determine the organizational boundaries of the enterprise, including operational control and equity share. This will determine which sources of greenhouse gas emissions the company needs to calculate. 

2. Determining operational boundaries

 Operational boundaries involve determining the scope of direct emissions (Scope 1), indirect emissions (Scope 2, such as purchased electricity) and other indirect emissions (Scope 3, such as supply chain emissions). For SBTs, special attention is paid to Scope 3 emissions, as they tend to account for the majority of a company's total emissions. 

3. Collect Data and Choose Calculation Method 

Collect necessary emissions data according to GHG Protocol guidelines. This may include fuel consumption, electricity usage, business travel data, and more. Businesses should choose calculation methods that suit their business activities, such as direct measurements, emission factors, or economic data. 

4. Calculating Emissions 

Calculate Scope 1, 2 and 3 emissions using the calculation tools and emission factors provided by the GHG Protocol. For Scope 3 emissions, specific Scope 3 calculation guidelines and tools may be required to account for multiple sources of emissions in the supply chain. 

5. Set emission reduction targets: 

Set science-based emission reduction targets based on inventory results. These targets should be aligned with global greenhouse gas reduction efforts, such as limiting the path to global warming to within 1.5°C. 

6. Develop an action plan : 

Develop strategies and action plans to achieve the set goals. This may include measures such as improving energy efficiency, shifting to renewable energy sources, optimizing supply chain management, and more. 

7. Monitoring and Reporting 

Regularly monitor and report on greenhouse gas emissions to assess progress and adjust emission reduction strategies as needed. Using the reporting framework provided by the GHG Protocol can help businesses systematically report on their greenhouse gas emissions and reduction efforts. 

8. Verification and Communication : 

Conduct independent verification of greenhouse gas emissions reports to ensure their accuracy and completeness. Then, companies can communicate their emission reduction commitments and progress to stakeholders, enhancing transparency and trust. 

GHG Protocol is the same as ISO 14064-1 and is compared 

1. Summarize the similarities and differences between GHG Protocol and ISO 14064-1 

Summarize the similarities and differences between the GHG Protocol and ISO 14064-1 

Purpose Consistency:

1. Both the GHG Protocol (Greenhouse Gas Protocol) and ISO 14064-1 aim to provide a standardized method for quantifying, managing, and reporting greenhouse gas emissions. These two standards help organizations identify and report their direct and indirect emissions, promoting transparency and sustainability. 

2..Accounting and Reporting Principles: They both emphasize accuracy, consistency, completeness, transparency, and relevance in reporting, ensuring the credibility and effectiveness of information. 

Differentiated 

1.Scope and Flexibility: 

• The GHG Protocol provides a more comprehensive and flexible framework suitable not only for enterprise-level greenhouse gas inventory but also for product and supply chain greenhouse gas emission accounting. It is suitable for organizations of all sizes and can be adapted to the specific needs of the organization. 

• ISO 14064-1 is more formal and directive, primarily aimed at organizations that require third-party audits. It provides rigorous guidance for organizations that need to verify and report emissions in the carbon trading market.

2. International Recognition and Applicability:

•  GHG Protocol has become the most widely used greenhouse gas accounting tool globally due to its flexibility and ease of use. 

• ISO 14064-1, as an international standard, is highly recognized and is particularly suitable for large enterprises and government agencies that need to meet international compliance. 

3.Detailed Guidance and Tools: 

• GHG Protocol provides a range of specific tools and online resources to help organizations implement their frameworks, such as Scope 3 calculation tools, product lifecycle and supply chain assessment tools.

•  ISO 14064-1 focuses on providing organizations with a detailed set of standards for establishing, implementing, and maintaining greenhouse gas inventories, as well as preparing reports for verification and auditing. 

4.Third-Party Verification Requirements: 

• GHG Protocol does not specifically require third-party verification, and organizations can choose whether to conduct verification at their own discretion. 

ISO 14064-1 somewhat emphasizes the importance of third-party verification to increase the credibility of reporting.  

2. How to determine the "GHG Protocol or ISO 14064-1" when applying 

How to Decide How to Apply GHG Protocol vs. ISO 14064-1 

While both share the same core purpose and are committed to promoting accurate reporting and management of greenhouse gas emissions by organizations, there are significant differences in implementation details, scope of application, flexibility, and form. When choosing which standard to use, organizations should consider their specific needs and the differences between the two to choose the solution that best suits their own enterprise  : 

1. Similarities 

International and Recognition: GHG Protocol and ISO 14064-1 are both internationally recognized standards designed to guide and regulate organizations in the accounting and reporting of greenhouse gases. These two sets of standards are widely used globally to help businesses and organizations quantify, manage, and report on their carbon emissions. Accounting and Reporting Frameworks: Both provide systematic methods for quantifying direct and indirect greenhouse gas emissions. Includes detailed explanations and accounting guidance for Scope 1 (direct emissions), Scope 2 (indirect energy emissions), and Scope 3 (other indirect emissions). Tools to Combat Climate Change: Both GHG Protocol and ISO 14064-1 aim to support transparency and accountability in addressing climate change, promoting environmental sustainability by ensuring the quality and reliability of emissions data. 

2. Differences 

Development Background and Application Focus: 

• GHG Protocol: Jointly developed by the World Resources Institute and the World Business Council for Sustainable Development, it focuses more on voluntary actions at the corporate level. It is an open, informal standard designed to provide businesses with flexibility to adapt to different regulatory environments and corporate needs.

•  ISO 14064-1: As part of an international standards organization, it is more formal and systematic in design, often used in situations requiring third-party verification, such as meeting specific regulatory requirements or providing official documentation for carbon trading and carbon offset projects. 

Methodology and Level of Detail:

•  GHG Protocol: Provides a comprehensive set of guidance covering various emissions scenarios, from enterprise to project-level, including detailed supply chain emissions (Scope 3) accounting methodologies. 

• ISO 14064-1: Emphasizes precision and consistency in compliance, providing detailed technical requirements and guidance for greenhouse gas reporting and emission reduction project verification, suitable for third-party audits and verification. 

 Structural framework: 

• GHG Protocol: Divided into three areas (Scope 1~3): Scope 1 covers direct emissions, Scope 2 covers indirect energy emissions, and Scope 3 includes value chain emissions; External indirect emissions are grouped into Scope 3 (enterprise value chain) and subdivided into 15 categories, which provides a detailed perspective to analyze and manage carbon emissions across the supply chain. 

• ISO 14064-1: Divided into direct and indirect emissions (Category 1~6). Categories 3~6 are other indirect emissions, and the company's external indirect emissions are classified into categories 3 to 6, reflecting a more traditional perspective that focuses on specific indirect emissions categories rather than the entire value chain. 

User Group and Implementation Complexity: 

• GHG Protocol: Preferred by businesses, especially those seeking flexible applications and integrated reporting needs. It encourages companies to choose the most suitable accounting method based on their own situation. 

• ISO 14064-1: Commonly adopted by government agencies and large enterprises requiring strict environmental compliance, especially those involved in international transactions and public reporting. 

Formality and Verification Requirements: 

• GHG Protocol: While it supports high-quality emissions accounting, it generally does not require mandatory third-party verification. 

• ISO 14064-1: Third-party verification is often required or encouraged to ensure the accuracy and completeness of reports in line with international standards. 

While GHG Protocol and ISO 14064-1 share common goals and frameworks, they differ significantly in terms of formality, flexibility, and target user groups in implementation. Which set of standards to choose, companies need to consider their specific needs, industry standards, and regulatory requirements. Regardless of the choice, the correct implementation of these standards will help organizations better manage their environmental impact, improving resilience and accountability towards climate change.  

How the GHG Protocol and corporate carbon reduction should achieve net-zero goals 

1. Current and Challenges of Corporate Objectives to Achieve the 1.5 Degree Target 

(1)Analysis of International Trends: 

• With the promotion of the Paris Agreement, many companies around the world have committed to aligning their operations with the 1.5 degree target. These companies have formulated specific emission reduction plans and are actively taking measures to reduce greenhouse gas emissions. 

• Technological Advancements: Advancements in new energy technologies, energy-saving technologies, and carbon capture technologies support companies in achieving emission reduction goals. Examples include the use of solar and wind energy, the popularity of electric vehicles, and the application of carbon capture and storage technology (CCS). 

• Policy Support: Governments have established strict environmental regulations and incentives to encourage companies to adopt carbon reduction measures. For example, carbon taxes, carbon trading markets, and renewable energy subsidies. 

(2)Actual challenges faced by companies Internal high-level support:

•  Gaining recognition and support from senior management is key to achieving emission reduction goals. Enterprises need the active participation and support of senior leaders to ensure sufficient human and financial resource investment. 

• Scope 3 emissions: Scope 3 emissions account for a high proportion, involving indirect emissions from the upstream and downstream of the supply chain, with complex accounting and a lack of standardized methodologies. Many companies face difficulties in collecting and managing Scope 3 emissions data. 

• Technology and Innovation: While technological advancements offer new avenues for emission reduction, many technologies are still in their early stages, and future developments are uncertain. Enterprises need to invest a lot of resources in technological innovation and application. 

• Financial Pressure: Implementing emission reduction measures requires significant financial investment, especially for small and medium-sized enterprises, which is a significant challenge. Enterprises need to find effective sources of funding and financing channels. 

2.Analysis of feasible carbon reduction goals and paths for enterprises 

(1)Achievable Goals and Paths (1) 

• Carbon Reduction Targets: Companies should commit to achieving carbon neutrality by 2040 and participate in the emission reduction targets set by the Science Based Targets initiative (SBTi) to improve the energy efficiency of their products and promote the green transformation of their supply chains. 

• Practical Approach: Emissions reduction can be achieved in various ways, including using renewable energy, improving energy efficiency, promoting green supply chains, and product design improvements. Specific initiatives include installing solar panels in facilities worldwide, procuring renewable energy sources such as wind and hydropower, and improving product design to improve energy efficiency. 

(2)Feasible goals and paths (2) Carbon reduction targets:

•  Net zero carbon emissions can be set by 2050, and The Climate Pledge has been launched, promising to achieve the goals of the Paris Agreement 10 years ahead of schedule. 

• Practical Approach: Specific emission reduction measures include the use of electric transportation vehicles, the construction of renewable energy facilities, the improvement of logistics efficiency, and the promotion of supply chain decarbonization. For example, Amazon has installed solar panels in its warehouses and distribution centers and plans to use 100% renewable energy by 2030. 

3. Detailed interpretation of the GHG Protocol accounting methodology 

(1)accounting category 

• Scope 1: Emissions directly controlled by the enterprise, including fuel combustion, chemical reactions, and transportation. Scope 1 emissions are emissions directly generated during a company's operations, usually measured and reported directly through the company's internal data system. 

• Scope 2: Indirect emissions from electricity, steam, heating and cooling purchased by businesses. Scope 2 emissions mainly come from the energy purchased and used by enterprises, and enterprises need to work with energy suppliers to obtain accurate emission data.

•  Scope 3: Other indirect emissions, including emissions from the upstream and downstream of the enterprise value chain. Scope 3 emissions involve multiple aspects such as supply chain, product use and disposal, and data collection and accounting are relatively complex. 

(2)accounting methodology 

• Principles and Standards: GHG Protocol conducts data collection and accounting based on a series of principles, including completeness, accuracy, consistency, transparency, and relevance. These principles ensure data quality and confidence in accounting results. 

• Tools and Techniques: Businesses can utilize LCA (Life Cycle Analysis) tools, EEIO (Environmental Extended Input-Output Model), and other technologies to assist in accounting. These tools and technologies can help companies measure their greenhouse gas emissions more accurately and develop effective emission reduction strategies. 

4.Evaluation of the advantages and disadvantages of choosing a practical approach 

(1)Compliance with SBTi/GHG Protocol Requirements

•  Focus on Supply Chain Reduction: HP focuses on transparency and accuracy of supply chain data, aligning with GHG Protocol standards. Collaborate with suppliers to collect and account for emissions data upstream and downstream of the supply chain, ensuring data integrity and consistency.

•  Focus on Logistics and Transportation: Amazon has taken proactive measures in the field of logistics and transportation, but faces challenges in supply chain data collection. The data collection system needs to be further improved to meet the requirements of the GHG Protocol. 

(2)Advantages and disadvantages 

• Analysis of supply chain reduction advantages: high data management and transparency, specific and actionable emission reduction measures. It has achieved remarkable results in supply chain management and product design, and achieved considerable emission reduction effects through technological innovation and green energy use. 

• Advantages of logistics and transportation reduction: Technological innovation and scale effects are significant, especially in the logistics and transportation sectors. However, supply chain data collection and management need to be strengthened to ensure the accuracy and consistency of emission reduction data. 

(3)enhancement suggestion 

• Supply Chain: Strengthen collaboration with suppliers to further improve Scope 3 data quality. This can be achieved through regular supplier training and partnership management to ensure transparency and accuracy of supply chain data. 

• Logistics and Transportation: Improve supply chain data collection systems to enhance the execution of emission reduction measures. Consider establishing a more comprehensive data management system and strengthening collaboration with suppliers to ensure data integrity and accuracy. 

5.Learn from the practical experience of international companies to improve the inventory and emission reduction of GHG Protocol Scope 3 

(1)Scope 3 Inventory Challenges 

• Data Collection Difficulties: Scope 3 involves multi-layered supply chains and future scenarios, with data fragmented and difficult to obtain. Companies need to work closely with suppliers and other stakeholders to ensure data accuracy and completeness. 

• Complex Accounting Methods: Scope 3 accounting involves multiple calculation methods and emission factors, requiring companies to comprehensively consider various factors to ensure data accuracy and consistency.

(2) Apply Strategies 

• Enhance Collaboration: Strengthen collaboration with suppliers and other stakeholders to establish transparent data sharing mechanisms. This helps improve data availability and accuracy, promoting a green transition in the supply chain. 

• Technology Applications: Utilize advanced technologies and tools, such as the Internet of Things and big data analytics, to improve data collection and management efficiency. These technologies can help companies measure their greenhouse gas emissions more accurately and develop effective emission reduction strategies.

•  Continuous Improvement: Continuously improve accounting methods and data management systems based on practical experience to ensure the achievement of emission reduction goals. Enterprises can ensure the accuracy and consistency of accounting results through regular data audits and evaluations 

6.Analysis of the reasons why enterprises have been using secondary data for a long time 

• Data Availability: In the supply chain, many suppliers cannot provide detailed primary data, especially in the early stages. Secondary data is often derived from industry averages, national statistics, and third-party databases, making it more accessible and less costly. 

• Cost Considerations: Using primary data requires significant resources for data collection and analysis, making it particularly difficult for small and medium-sized enterprises. Although secondary data is less accurate, it is less expensive to use, making it a cost-effective option for businesses with limited resources.

•  Data Quality: Although secondary data may not be as accurate as primary data, it has been verified by multiple parties and has high credibility. By using secondary data in the early stages, businesses can gradually transition to using more primary data after gradually establishing a comprehensive data collection system. 

• Time efficiency: The collection and processing of primary data take a long time, while secondary data can be acquired and applied more quickly, which is particularly important for businesses that need to respond quickly to market and policy changes. 

7.Implementation steps for GHG Protocol Scope 3 

• Understanding Scope and Data Requirements: Companies need to fully understand the requirements of GHG Protocol Scope 3 and clarify the accounting methods and data requirements of each category. This includes understanding the emission sources, accounting logic, and data collection standards of each category.

•  Data Collection and Management: Establish a comprehensive data collection and management system to ensure data accuracy and consistency. Enterprises can utilize information systems and database management tools to automate data collection and analysis. 

• Data Analysis and Reporting: Utilize advanced analytical tools and technologies to conduct data analysis and publish reports regularly. Companies need to ensure transparency and completeness of reports, adjusting emission reduction strategies based on report results. 

• Continuous Improvement and Optimization: Based on practical experience and data analysis results, continuously optimize accounting methods and data management systems to ensure the achievement of emission reduction targets. Enterprises can conduct regular internal audits and third-party verification to improve data accuracy and credibility 

8.Accounting methods and challenges of GHG Protocol 

(1)Accounting Method 

• Supplier-specific method: Collects product-level greenhouse gas inventory data from suppliers. This method can provide highly accurate data but requires active cooperation and transparency from suppliers. 

• Hybrid method: Uses a combination of supplier-specific activity data and auxiliary data to fill data gaps. This method ensures data accuracy while reducing the difficulty of data collection. 

• Average-data method: Estimates emissions from goods and services by collecting physical quantity data. This method is suitable for situations where data acquisition is difficult but has relatively low accuracy. 

• Spend-based method: Estimates emissions by collecting data on the economic value of goods and services. This method is straightforward but also faces challenges in data accuracy. 

(2)Challenges 

•  Data Collection: Scope 3 involves multi-layered supply chains and future scenarios, with data fragmented and difficult to obtain. Companies need to work closely with suppliers and other stakeholders to ensure data accuracy and completeness. 

• Complex Accounting Methods: Scope 3 accounting involves multiple calculation methods and emission factors, and companies need to consider multiple factors to ensure data accuracy and consistency. 

• Continuous Improvement Needs: Companies need to continuously improve accounting methods and data management systems based on practical experience to ensure the achievement of emission reduction goals. This requires continuous resource investment and management innovation. 

9.Implementation case: SC Johnson and international medical institutions 

(1)SC Johnson's practice 

• Emission Reduction Targets: SC Johnson is committed to achieving carbon neutrality by 2030 and has developed detailed emission reduction plans.

•  Accounting Methodology: Comprehensive accounting for Scope 1, 2, and 3 using the GHG Protocol to reduce emissions through technological innovation and process improvements. 

(2)international medical institutions 

• Emission Reduction Targets: Several international medical institutions have set ambitious emission reduction targets and participated in SBTi and GHG Protocol certifications. 

• Accounting Methods: Utilize LCA tools and EEIO models for emissions accounting to ensure data accuracy and consistency. 

(3)Improvement

1. •  Advantages: These companies have achieved remarkable results in data management and emission reduction measures, providing valuable experience and reference for other companies. 

   • Room for Improvement: The data collection system needs to be further strengthened, especially the transparency and accuracy of Scope 3 data. 

10.future development direction 

(1)Technological Innovation: With the continuous advancement of technology, more companies will be able to utilize advanced data analysis tools and technologies to improve the efficiency and accuracy of data collection and management. 

(2)Standardization Process: International organizations and standards bodies will continue to promote the formulation and improvement of emission reduction standards, providing more operational guidance and support to enterprises.

(3)Cross-border Cooperation: Companies need to strengthen cooperation with suppliers, customers, and other stakeholders to jointly promote the achievement of emission reduction goals. 

The GHG Protocol provides a comprehensive and flexible framework for accounting for greenhouse gas emissions, helping companies systematically manage and reduce their carbon footprint. Despite the challenges of data collection and accounting complexity during implementation, by properly selecting and applying various accounting methods, companies can effectively achieve their emission reduction goals and enhance their competitiveness in the global market. Practical cases from companies such as HP, Amazon, and SC Johnson demonstrate the application and effectiveness of different accounting methods, providing valuable experience and reference for other companies. In the future, driven by technological innovation and international standardization, companies will be able to more effectively address emission reduction challenges and achieve sustainable development goals.