ESG glossary
GHG Protocol
The GHG Protocol is the most widely used international standard for measuring and reporting a company's greenhouse gas emissions. It is where Scope 1, 2 and 3 come from.
The Greenhouse Gas Protocol was developed by the World Resources Institute and the World Business Council for Sustainable Development. Its Corporate Standard sets out how a company should draw the boundaries of its footprint, which gases to include and how to group emissions into scopes. Most other frameworks, from UK SRS to B Corp to the PPN 006 Carbon Reduction Plan, build on it. The standard is free to download from the GHG Protocol website.
What it means for a small business
You do not need to read the full standard. What matters is that a footprint “prepared in line with the GHG Protocol” follows a few recognised rules:
- Set a boundary. Most businesses use the operational control approach: you include emissions from everything you have the authority to run day to day.
- Sort emissions into scopes. Scope 1 is direct (your gas and vehicles), Scope 2 is purchased electricity, and Scope 3 is everything else in your value chain.
- Cover all seven Kyoto gases, expressed as CO2e.
- Be transparent. State your reporting period, what is included, what is excluded and why.
When a customer, funder or tender panel asks for your footprint, saying it follows the GHG Protocol and uses UK government factors tells them it was done properly.
An example
A co-working sole trader does not control the building’s boiler, so under operational control the building’s gas is not their Scope 1. Their share of the building’s energy is still worth estimating and reporting, clearly labelled, so the footprint is complete and honest.
How ESG Now handles it
ESG Now follows the GHG Protocol Corporate Standard using the operational control approach, with UK government conversion factors. Scope 2 is reported both location-based and market-based, as the GHG Protocol’s Scope 2 guidance recommends. The methodology page sets out exactly what is included, and the questionnaire applies it for you.
Guides that cover this
- Carbon footprintScope 1, 2 and 3 emissions explained for small businessesScope 1 is fuel you burn, Scope 2 is electricity you buy, Scope 3 is everything else. Here is how each one applies to a real small business.Read the guide →
- Carbon footprintHow to calculate your small business carbon footprintMultiply what you use by the official UK factors and add it up. Here is exactly what to measure, a worked example, and what to do when you are missing a bill.Read the guide →
- Public sector tendersCarbon Reduction Plans for SMEs: PPN 006 explainedPPN 006 asks bidders for major government contracts to publish a Carbon Reduction Plan. Here is what it must contain, what changed from PPN 06/21, and how a small supplier gets one ready.Read the guide →