GHG Protocol raises the bar on Scope 3 reporting

The Greenhouse Gas (GHG) Protocol has released a pivotal progress update for its Scope 3 Standard revisions, signalling a major shift toward greater transparency and accountability in corporate reporting. 

As the foundational framework for global disclosure systems like the ISSB and ESRS, these updates represent the first major modernisation of the standard since 2011.

In a significant move to eliminate reporting ambiguity, the Protocol plans to quantify exactly what it means to be in compliance. Companies will be required to account for at least 95% of their total required Scope 3 emissions to claim conformance. While this creates a strict new boundary, it also offers practical relief by allowing firms to formally exclude insignificant or negligible sources—totalling up to 5%—so they can focus their energy on the major emission ‘hotspots’ that truly matter.

To address the complexities of modern business, a new Category 16 is being introduced for ‘other value chain activities’. This captures facilitated emissions, which are generated by third parties where a company enables an activity and earns income from it, such as licensing or insurance, but never actually owns the underlying assets. Furthermore, the update clarifies that investment reporting isn’t just for banks. Category 15 (Investments) applies to every company with a portfolio, though it has been refined to focus exclusively on financed emissions.

To combat inconsistent data quality, companies will now be asked to break down their reports into distinct tiers based on data type. Rather than seeing a single, opaque number, stakeholders will see how much of the inventory is based on high-quality primary data versus broad secondary estimates. This approach is designed to reward organisations that do the hard work of engaging their supply chains for specific, accurate information.

Ultimately, these changes transform Scope 3 reporting from a 'best effort' exercise into a rigorous, data-driven discipline. By providing a clearer lens through which to view value chain impacts, the GHG Protocol is not just updating a standard — it is giving leaders the tools to turn climate disclosures into decisive action. With a full draft expected for public consultation later this year, the direction of travel is clear: vague accounting is no longer an option.