Global Sustainability Standards Board (GSSB) Board Member
GHG Protocol Technical Working Group (TWG) Members
Director of Zeroboard Research Institute Tomoo Machiba

Introduction: Purpose and Value of this Report

The GHG Protocol is currently undergoing major revisions, the first in 20 years since the publication of the second edition of the Corporate Standards. The Contents under discussion are expected to have a major impact on corporate GHG accounting, renewable energy procurement, and Scope 3 compliance.

The insight " GHG Protocol Revision Interim Report ," which has already been published, provides an overview of the overall direction of the revision and systematically summarizes the main themes.

This report complements that and is based on the "real questions from practitioners" submitted during a webinar held on October 14, 2025 (recorded and rebroadcast on November 6) .

The "Interim Report" could not include

• Points that are particularly commonly misunderstood in practice
• Points that tend to cause disagreements within the organization
• Issues that other companies are concerned about

Regarding more in-depth questions such as these, Machiba, a member of the Technical Working Group (TWG), has restructured the guide to clearly show where companies should focus their efforts.

By reading this report,
"Are the issues we have doubts about also occurring at other companies?"
"What gaps are there in our current understanding of the system?"
This will help you understand the current situation and consider future calculation and disclosure systems.

Information assumptions

This report is a compilation of information published by the GHG Protocol Secretariat and does not represent the final Contents. The Contents may be subject to change in the future through public comments, etc.

Target audience of this report

• GHG accounting/Scope 3 data collector
• Renewable energy procurement (certificates and PPA) officer
• Corporate Planning, Sustainability and Internal Control Team
• Companies considering compliance with SSBJ and IFRS S2

GHG Protocol Revision General and Basic Policy

Why this revision is noteworthy

The revision of the GHG Protocol is likely to affect a wide range of areas, including calculation rules for Scopes 1 to 3, renewable energy procurement, data accuracy, and avoided emissions.

Taking into account the need for consistency with the disclosure and assurance requirements of IFRS S2 and the SSBJ, this is the time for companies to "redesign their medium- to long-term calculation systems."

Examples of questions asked during the webinar

• Timing of final decision on revisions and implementation
• How consensus is formed and decisions made
• The relationship between the GHG Protocol, disclosure systems such as SSBJ/IFRS2, and target Settings based on SBT
• Scope of joint standardization with ISO
• Relationship with the national emission amount reporting system

These findings indicate that it is essential for companies to understand the direction of the revisions in order to determine what they need to prepare and by when.

Direction of the revision and key points that companies should keep in mind

The revisions are being carried out in stages, with Scopes 1 to 3 expected to be finalized by the end of 2027, and discussions on activity such as avoided emissions and AMIs expected to be finalized by the end of 2028. The final revisions will be completed by the end of 2028, and companies will likely begin to apply them in practice around 2030.

Furthermore, revisions are not made by majority vote, but require essentially 100% agreement, excluding abstentions, so careful discussions are held repeatedly.

Furthermore, the GHG Protocol is a common standard for "calculation rules," and the disclosure media and formats for climate change-related information (financial reports, sustainability reports, etc.) are based on the GHG Protocol and are established by SSBJ, IFRS S2, GRI, European ESRS, and others.

Joint standardization with ISO will first proceed on the CFP (product unit), and standardization of organizational-level emission amount calculations (ISO 14064) will be discussed in the future.

Although the objectives and frameworks for accounting for emission amount emission amount among countries, international consistency is expected to become even more important in the future, and it is recommended that calculations based on the GHG Protocol be carried out as a first step.

Summary of this chapter

• The revisions will be finalized at the end of 2028, and practical application is expected around 2030.
• The GHG Protocol is the calculation standard, while the reporting medium and format are determined by the disclosure standard.
• Alignment with ISO will be gradual, with CFP at the forefront

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Below is a summary of the column, which you can download.

Corporate Standards: Scope of calculation, completeness, data quality (Key points)

Why the revision of corporate standards is attracting attention

Regarding the corporate standards that govern the entire GHG Protocol, the key themes being discussed are the scope of calculations (organizational boundaries), comprehensiveness, and clarification of data quality.

In particular, in order to comply with the assurance requirements of IFRS S2 and SSBJ, there is a trend towards requiring GHG calculations to be more highly accurate and based on evidence than ever before.

Summary of this chapter: What companies should prepare for GHG accounting

• Reorganizing boundaries with a view to unifying financial operations
• Strengthening source inventory and exception management processes to achieve 99% coverage of Scope 1 and 2
• Scope 1: Improve the calculation process based on primary data and reduce the estimated portion
• Strengthen evidence management and internal controls to withstand external assurance.

Read more in DL: 3-1. Direction of revision of corporate standards and practical points that companies should keep in mind
(Organizational boundary organization, handling of exception limits, primary data requirements, etc.)

Scope 2: Redesigning renewable energy procurement rules – simultaneous and equal quantities and geographical consistency (Key points)

Why the Scope 2 revisions are attracting attention

The area expected to have the greatest impact in the current revision discussions is Scope 2. In particular, the handling of renewable energy procurement (certificates and PPAs) is the area of most active discussion internationally, as it directly affects companies' decarbonization strategies and SBT certification.

The direction is to update the existing systems, such as "annual matching" and "area-agnostic certificate purchase," to systems that reflect more substantial emissions reductions.

Therefore, Scope 2 is an area that could become a "medium- to long-term transition point" that will require a major review of a company's renewable energy procurement strategy.

Chapter summary: What companies need to prepare for Scope 2

• Renewable energy procurement must be redesigned for 2030 and beyond, based on time and geography
• Moving away from relying solely on certificates: On-site and same-system PPAs are becoming more valuable
• Be careful with non-fossil certificates (including FIT): SSS concept may be adopted
• Existing contracts will be protected, but New procurements will need to be designed in accordance with the new rules.
• Keeping a close eye on the development of national and electricity market systems: Creating a system that addresses the above is essential

Read more in DL: 4-1. Practical points regarding Scope 2 revisions
(Temporal consistency, geographical consistency, handling of non-fossil certificates and PPAs, and transitional measures)

Scope 3: Comprehensiveness, scope of category calculation, treatment of intermediate products (key points)

Why the Scope 3 revision is attracting attention

While Scope 3 accounts for the majority of emission amount for some companies, it is an area with significant uncertainty in data collection, estimation methods, and category calculation ranges. This revision aims to correct this "level of variation," and has identified key themes as ensuring comprehensiveness and clarifying category boundaries.

In particular, as disclosure systems such as IFRS S2 and SSBJ require "transparency of emission amount throughout the value chain," calculation of Scope 3 emissions is shifting from a "duty of best efforts" to a "subject to accountability."

Chapter summary: What companies need to prepare for Scope 3

• First, the total amount must be estimated, and then a calculation process must be carried out to refine that 95%.
• Intermediate product companies need a system that can explain whether or not their products can be traced for use.
• Anticipate expanding the scope of categories, such as remote work, waste transportation, and IP licenses.
• Beware of the expansion of the scope of coverage for each industry, such as the new Category 16
• "Reasonable explanations for calculation omissions" will become important, and process management will become increasingly important.

Read more in DL: 5-1. Practical points regarding Scope 3 revision
(95% coverage, category boundaries, usage tracking, handling of intermediate products, etc.)

Data Quality: Tier Disclosure and Strengthening Internal Controls (Key Points)

Why data quality matters

In the revision of the GHG Protocol, a very important theme is to "improve the transparency of data quality" while also reviewing the calculation method itself.

The background is as follows:

• With the mandatory disclosure of SSBJ, IFRS S2, CSRD, ESRS, etc., the reliability of calculation processes and data accuracy is becoming more important.
• External assurance is now a prerequisite, and clear evidence is essential
• It is important to manage the documentation supporting calculations, including Scope 3, in addition to Scope 1 and 2.

As a result, "tiered disclosure" of data quality has become a central topic of international discussion.

Chapter Summary: How Companies Should Prepare for Data Quality

• Tier disclosure will become increasingly important as a framework for improving transparency
• The monetary-based Intensity is expected to be classified as the lowest tier, and the scope of use needs to be reviewed.
• LCA data such as IDEA are organized into the middle tier
• Scope 1 is based on primary data, and trail management is important
• Operations that take into account internal controls, such as data source management and tier improvement plans, are necessary

Read more in DL: 6-1. Practical points of data quality (tier) and internal control
(Positioning of monetary-based Intensity, tier classification, evidence management, improvement steps, etc.)

Reduction Targets and SBTi: Alignment with the revised GHG Protocol and future impacts (Key Points)

Why is alignment between the SBTi and the revised GHG Protocol important?

The Science Based Targets initiative ( SBTi) is the most widely used international framework for Settings corporate reduction targets. Because the calculation standards that form the basis for these targets are based on the rules of the GHG Protocol, revisions to the GHG Protocol have a direct impact on the SBT certification criteria.

In particular, areas where calculation rules are changing significantly, such as Scope 2 (renewable energy procurement) and Scope 3 (calculation scope and data quality), will affect whether or not SBT targets can be achieved, so it is important for companies to understand the direction early on.

Summary of this chapter: What companies should prepare for when Settings reduction targets

• Scope 2 time and geographic consistency is likely to become mandatory for SBTs
• Existing SBT certifications are not "permanently valid" and require reorganization after revision
• With the transition to operation in 2030 in mind, reduction targets and renewable energy procurement strategies need to be reviewed.
• It is important to plan with an awareness of the target update (five-year cycle) and the GHG Protocol revision schedule

Read more in DL: 8-1. Organizing activity and Market Instruments (AMI)
(Credits, avoided emissions, mass balance, handling outside the inventory)

Carbon credits and avoided emissions: Organizing "additional contributions" outside the inventory (Key points)

Why activity and Market Instruments (AMI) Matter

In addition to the calculation rules for Scopes 1 to 3, the revised GHG Protocol is considering a new framework for arranging the purchase of carbon credits, the use of new low-carbon fuels (bio- and synthetic fuels, etc.), low-carbon materials (green steel, aluminum, bioplastics, etc.), and the handling of societal emission reductions (avoided emissions) through a company's own products. This is an area known as "activity and Market-based Instruments" (AMI).

background:

• Some companies have begun to deduct offset(purchased credits) directly from Scope 1-3 values.
• Confusion arose when companies included avoided emissions from the use of their own products in Scope 3.
• Treatment differs depending on the country, region, and certification body, making international consistency necessary

AMI is a framework for transparently listing information outside of the inventory (Scope 1 to 3)
It is said that this is an area where discussion has not yet matured sufficiently.

Chapter Summary: What companies need to prepare for AMI

• offset through credits are not reflected in Scope 1 to 3 and are reported separately.
• The amount of avoided emissions is classified as an "additional contribution" outside the inventory
• Mass balance can be used outside the inventory, but only in accordance with international standard schemes
• AMI discussions are still in their infancy, so a system that can flexibly respond to system changes is needed.
• Need for "internal and external rules" for decarbonization communication regarding AMI

 Read more in DL: 8-1. AMI (activity and Market Instruments) and practical points
(Handling of credits, positioning of avoided emissions, mass balance requirements, concept of international consistency, etc.)

[Summary] Practical agenda for the next five years as outlined by the revised GHG Protocol

The revision of the GHG Protocol is a major update that comprehensively reviews not only the calculation rules for Scopes 1 to 3, but also renewable energy procurement, data quality (tiers), and AMI (Amended Management Indicator).

The revisions are expected to be finalized at the end of 2028, with companies likely to begin applying them in practice around 2030.

In each of these areas, the following common trends have emerged:

• Scope 2 is the time to "redesign" procurement strategies from scratch (e.g., time consistency, geographic consistency, review of FIT non-fossil certificate handling)
• Scope 3 is now more about the quality of accountability than whether it is included in calculations
• Tier (data quality) becomes a common language within the company
• Credits and avoided emissions are in the "pre-system" stage, and clear disclosure is required, assuming that there is a possibility of major changes.

Practical issues - what should be prepared and in what order by 2030 (Scope 2 and Scope 3 response priorities, tier management, redesign of renewable energy procurement, handling of AMI, and roadmap for restructuring internal structures) - are detailed in the downloadable "GHG Protocol Revision Q&A Report."

Future uncertainty and maturity of discussions

Among the areas outlined in this report, renewable energy procurement (Scope 2), AMI (credits and avoided emissions), and alignment with disclosure systems (SSBJ/IFRS S2/GRI/ESRS) are currently under discussion and may be subject to change in the future.

In particular, the period from 2027 to 2030 will be a "transitional period" with successive revisions to international standards, national systems, and the SBTi . Rather than waiting for the systems to be finalized, it is important for companies to proceed with designing structures and systems that can flexibly respond to changes "assuming changes are expected."

Summary Message

The revision of the GHG Protocol is a move to update corporate GHG accounting from simple "environmental data" to an area closely linked to business management, internal control, renewable energy procurement strategies, location planning, and supply chain strategies.

The year 2030 marks the turning point when the "new era of calculation" will begin in earnest.

We hope that this report will serve as a practical guide for companies to review their own accounting systems and achieve competitive decarbonized management in the long term.

"GHG Protocol Revision QA Report"
Download the full PDF for free here

source:

1. GHG Protocol, Standards Development and Governance Repository.
   https://ghgprotocol.org/corporate-standard

2. Science-based Target Initiative (SBTi), Corporate Net-Zero Standard V2, an updated draft.
   https://sciencebasedtargets.org/developing-the-net-zero-standard