The Greenhouse Gas Protocol - World Resources …

1 A Corporate Accounting and Reporting StandardREVISED EDITIONThe Greenhouse Gas Protocol 390 370 350 330 310 290 270 ppm100015002000 Year:WORLDRESOURCESINSTITUTEWRI Cover 3/10/04 5:00 PM Page 2 GHG Protocol Initiative TeamJanet RanganathanWorld Resources Institute Laurent CorbierWorld Business Council for Sustainable Development Pankaj BhatiaWorld Resources InstituteSimon SchmitzWorld Business Council for Sustainable Development Peter GageWorld Resources InstituteKjell OrenWorld Business Council for Sustainable Development Revision Working GroupBrian Dawson & Matt SpannagleAustralian Greenhouse OfficeMike McMahonBPPierre BoileauEnvironment CanadaRob FrederickFord Motor Company Bruno VanderborghtHolcimFraser ThomsonInternational

2 Aluminum InstituteKoichi KitamuraKansai Electric Power CompanyChi Mun Woo & Naseem PankhidaKPMGReid MinerNational Council for Air and Stream ImprovementLaurent SegalenPricewaterhouseCoopers Jasper KochShell Global Solutions International Somnath BhattacharjeeThe Energy Research InstituteCynthia CummisUS Environmental Protection AgencyClare BreidenichUNFCCCR ebecca EatonWorld Wildlife FundCore AdvisorsMichael GillenwaterIndependent ExpertMelanie EddisKPMGM arie MarachePricewaterhouseCoopersRoberto AcostaUNFCCCV incent CamobrecoUS Environmental Protection AgencyElizabeth CookWorld Resources InstituteWRI Cover 3/10/04 5.

3 00 PM Page 3261016243440485862687486889092959610310 4 Table of ContentsGUIDANCESTANDARDGUIDANCESTANDARD GUIDANCESTANDARDGUIDANCESTANDARDGUIDANCE STANDARDGUIDANCEGUIDANCEGUIDANCEGUIDANCE GUIDANCEGUIDANCEGUIDANCEGUIDANCESTANDARD I ntroductionThe Greenhouse Gas Protocol InitiativeChapter 1 GHG Accounting and Reporting PrinciplesChapter 2 Business Goals and Inventory DesignChapter 3 Setting Organizational BoundariesChapter 4 Setting Operational BoundariesChapter 5 Tracking Emissions Over TimeChapter 6 Identifying and Calculating GHG EmissionsChapter 7 Managing Inventory QualityChapter 8 Accounting for GHG ReductionsChapter 9 Reporting GHG EmissionsChapter 10 Verification of GHG EmissionsChapter 11 Setting GHG TargetsAppendix AAccounting for Indirect Emissions from ElectricityAppendix BAccounting for Sequestered Atmospheric CarbonAppendix COverview of GHG ProgramsAppendix DIndustry Sectors and Scopes AcronymsGlossaryReferences Contributorshe Greenhouse Gas Protocol Initiative is a multi-stakeholder partnership ofbusinesses, non-governmental organizations (NGOs)

4 , governments, and othersconvened by the World Resources Institute (WRI), a environmentalNGO, and the World Business Council for Sustainable Development (WBCSD), aGeneva-based coalition of 170 international companies. Launched in 1998, theInitiative s mission is to develop internationally accepted Greenhouse gas (GHG)accounting and reporting standards for business and to promote their broad adoption. The GHG Protocol Initiative comprises two separate but linked standards: GHG Protocol Corporate Accounting and Reporting Standard(this document, whichprovides a step-by-step guide for companies to use in quantifying and reporting theirGHG emissions) GHG Protocol Project Quantification Standard(forthcoming.)

5 A guide for quantifyingreductions from GHG mitigation projects) 2 TIntroductionThe first edition of the GHG Protocol Corporate Accounting andReporting Standard (GHG Protocol Corporate Standard), published inSeptember 2001, enjoyed broad adoption and acceptance around theglobe by businesses, NGOs, and governments. Many industry, NGO,and government GHG programs1used the standard as a basis fortheir accounting and reporting systems. Industry groups, such as the International Aluminum Institute, the International Councilof Forest and Paper Associations, and the WBCSD CementSustainability Initiative, partnered with the GHG Protocol Initiativeto develop complementary industry-specific calculation adoption of the standard can be attributed to the inclu-sion of many stakeholders in its development and to the fact that it is robust, practical, and builds on the experience and expertise ofnumerous experts and practitioners.

6 This revised edition of the GHG Protocol Corporate Standard is theculmination of a two-year multi-stakeholder dialogue, designed to build on experience gained from using the first edition. It includesadditional guidance, case studies, appendices, and a new chapteron setting a GHG target. For the most part, however, the first editionof the Corporate Standard has stood the test of time, and thechanges in this revised edition will not affect the results of mostGHG inventories. This GHG Protocol Corporate Standard provides standards andguidance for companies and other types of organizations2preparing a GHG emissions inventory.

7 It covers the accounting and reporting of the six Greenhouse gases covered by the KyotoProtocol carbon dioxide (CO2), methane (CH4), nitrous oxide(N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). The standard and guidance weredesigned with the following objectives in mind: To help companies prepare a GHG inventory that represents a true and fair account of their emissions, through the use ofstandardized approaches and principles To simplify and reduce the costs of compiling a GHG inventory To provide business with information that can be used to buildan effective strategy to manage and reduce GHG emissions To provide information that facilitates participation in voluntaryand mandatory GHG programs To increase consistency and transparency in GHG accountingand reporting among various companies and GHG business and other stakeholders benefit from converging on a common standard.

8 For business, it reduces costs if their GHGinventory is capable of meeting different internal and externalinformation requirements. For others, it improves the consistency,transparency, and understandability of reported information,making it easier to track and compare progress over business value of a GHG inventoryGlobal warming and climate change have come to the fore as akey sustainable development issue. Many governments are takingsteps to reduce GHG emissions through national policies thatinclude the introduction of emissions trading programs, voluntaryprograms, carbon or energy taxes, and regulations and standardson energy efficiency and emissions.

9 As a result, companies mustbe able to understand and manage their GHG risks if they are toensure long-term success in a competitive business environment,and to be prepared for future national or regional climate policies. A well-designed and maintained corporate GHG inventory canserve several business goals, including: Managing GHG risks and identifying reduction opportunities Public reporting and participation in voluntary GHG programs Participating in mandatory reporting programs Participating in GHG markets Recognition for early voluntary action.

10 Who should use this standard?This standard is written primarily from the perspective of a busi-ness developing a GHG inventory. However, it applies equally toother types of organizations with operations that give rise to GHGemissions, , NGOs, government agencies, and should not be used to quantify the reductions associated withGHG mitigation projects for use as offsets or credits the forthcoming GHG Protocol Project Quantification Standardwillprovide standards and guidance for this makers and architects of GHG programs can also use rele-vant parts of this standard as a basis for their own accountingand reporting to other GHG programsIt is important to distinguish between the GHG Protocol Initiativeand other GHG programs.