18.10.2024
As environmental, social and governance (ESG) issues become increasingly important for companies, sustainability reporting is becoming more and more of a focus. A key challenge here is the recording of a company's impact on the climate. The Greenhouse Gas Protocol (GHG Protocol) offers a recognized standard that enables companies to measure their greenhouse gas emissions (GHG emissions) precisely and present them transparently. In this article, we would like to explain the basics of the GHG Protocol and show you the central role it plays in the preparation of sustainability reports - especially with regard to compliance with EU directives.
The GHG Protocol (Greenhouse Gas Protocol) is the world's most widely used standard for measuring and reporting greenhouse gas emissions. The protocol was developed in collaboration between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) and provides companies with a systematic framework for recording their direct and indirect emissions.
The GHG Protocol divides greenhouse gas emissions into three categories (scopes):
Scope 1: Direct emissions from company-owned or controlled sources, e.g. from the operation of machinery or vehicles.
Scope 2: All indirect greenhouse gas emissions of a company from the production of purchased energy, e.g. for electricity or heat.
Scope 3: Other indirect emissions along the value chain, such as emissions caused by the production of raw materials or logistics.
The GHG Protocol plays a central role for companies that want to prepare sustainability reports in accordance with legal requirements. Especially in the EU, where the Corporate Sustainability Reporting Directive (CSRD) imposes strict requirements for reporting on ESG issues, accurate and transparent recording of greenhouse gas emissions is essential.
The GHG Protocol provides significant support for companies in various areas:
Regulatory compliance: compliance with EU regulations, particularly with regard to the disclosure of greenhouse gas emissions in sustainability reports.
Transparency and credibility: Precise and comprehensible presentation of own emissions, which strengthens the trust of investors, customers and other stakeholders.
Competitive advantages: Companies that successfully manage and reduce their emissions can position themselves as pioneers in sustainability in an increasingly environmentally conscious market.
The application of the GHG Protocol also brings companies further advantages:
Standardized reporting: companies can record their emissions in a uniform way, which promotes international recognition and comparability.
Improved decision-making: By understanding their own emissions, companies can better decide where they can reduce emissions to both save costs and improve their environmental footprint.
Risk minimization: Accurate and comprehensive reporting of greenhouse gas emissions helps companies to minimize regulatory and financial risks.
Although the GHG Protocol is a valuable tool, its implementation is also associated with certain challenges:
Data availability: companies often need to compile data from different areas and sources, which can be complex, especially for Scope 3 emissions.
Technical expertise: The correct application of the protocol often requires specialized technical and methodological knowledge, especially to accurately quantify emissions.
Integration into existing processes: Many companies will need to adapt their existing data collection and data analysis systems to meet the requirements of the GHG Protocol.
The GHG Protocol is an indispensable tool for companies to measure, understand and transparently disclose their greenhouse gas emissions. At a time when ESG reporting and compliance with EU regulations are becoming increasingly important, the Protocol ensures that companies can not only fulfill their legal obligations but also develop sustainable business strategies. Companies that familiarize themselves with the GHG Protocol and successfully integrate it into their reporting processes will be better positioned to meet sustainability and climate change requirements - while positioning themselves as responsible in the marketplace.
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