Scope 3 GHG Reporting Standards Finalized

The Greenhouse Gas Protocol today published two standards to help businesses measure, manage and report GHG emissions beyond their own operations, including the finalized version of long-awaited scope 3 guidance.

The Corporate Value Chain (Scope 3) and Product Life Cycle standards were developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The WRI said the standards will allow companies to measure and manage the full scope of emissions in their value chain and products for the first time, while helping to move businesses and reporting programs to one harmonized global reporting framework.

The GHG Protocol’s popular scope 1 and 2 guidelines provide a framework for nearly every GHG standard, including those of from the International Standards Organization and the Climate Registry, as well as for hundreds of companies. But these only measure a company’s emissions related to its own energy generation and its purchases of electricity, heat and steam.

This excludes a variety of upstream and downstream emissions sources, such as purchased goods, distribution, business travel, employee commuting, product use and end-of-life (see chart, above). These are all widely regarded as falling into scope 3.

The GHG Protocol has been developing the scope 3 standards in consultation with industry since 2008. It published a first draft in November 2009. During 2010, 34 companies from a variety of industry sectors road-tested the first draft and provided feedback on its practicality and usability, which informed a second draft, published in November 2010.

The Scope 3 document released today is the finalized version of the standard.

It includes guidance for companies on how to prepare and publicly report a GHG emissions inventory that includes indirect emissions resulting from value chain activities. The GHG Protocol’s previously released Corporate Standard gives companies flexibility in whether and how to account for scope 3 emissions, the organization says.

Scope 3 emissions can represent the largest source of emissions for companies and present the most significant opportunities to influence GHG reductions, the Protocol adds.

Complementing the corporate value chain standards, the Product Life Cycle Standard released today is designed to help companies to measure the emissions of an individual product. The standard covers materials, manufacturing, use and disposal.

Both take a similar approach to GHG accounting and were developed simultaneously. The GHG Protocol says that together with the Corporate Standard, the two new documents provide a comprehensive approach to value chain GHG measurement and management.

S.C. Johnson has backed the corporate value chain standard. Senior vice president of global corporate affairs, communication and sustainability Kelly Semrau says the company’s “road test” of the new standard provided the company with key data to help it with strategic business decisions.

Alcoa vice president and chief sustainability officer Kevin Anton said the new product standard gives the company a globally consistent approach to measure and manage product emissions, and in the future could help customers make purchasing decisions.

The Sustainability Consortium has adopted the product standard as the GHG methodology used in its tools to promote product sustainability, and the Global e-Sustainability Initiative is using the standard as the basis for guidance on ICT products and services.

Meanwhile the Consumers Goods Forum has recommended both new standards for members who choose to measure and report scope 3 and product greenhouse gas emissions.