Revised GHG Protocol Standards: What's Changing for Scope 2 & 3

The Greenhouse Gas Protocol sets the global benchmark for emissions accounting. While it is not itself mandatory, the Protocol has been incorporated into most mandatory and voluntary reporting regimes and is central to credible net zero strategies and science-based targets.

For the first time in twenty years, major revisions of its Corporate Standard, Scope 2 Standard, and Scope 3 Standard are underway. Public consultations on all three standards are scheduled for mid-2026, with the final standards expected to be published in late-2027.

Globally, climate standards have raised expectations around the quality of GHG accounting significantly in the last decade and climate disclosures and planning have become increasingly integrated into business operations and governance. The new standards reflect these changes. They are designed to enable sustainability to be integrated into general reporting, aligning carbon accounting with financial accounting. Consistency within GHG Protocol Standards and across climate reporting standards more widely, alongside a need for greater precision and accuracy around emissions accounting are the key drivers of these updates, raising the global baseline for emissions reporting.

What are the changes to the GHG Protocol?

The revisions to the GHG Protocol standards are still under consultation and none of the changes below are final. Nonetheless, they indicate the increasing expectations around data quality and comprehensiveness, which companies should prepare to align with.

Corporate Standard

The proposed changes to the Corporate Standard focus on increasing comprehensiveness and comparability. More emissions must be accounted for and the requirements around Scope 3 are brought in alignment with the Scope 3 standard. The revised standard also seeks to align emissions reporting with financial reporting, not just around timelines, but also around scope.

The Standard also shifts from a principles-based to a rules-based approach, introducing quantitative exclusion thresholds for all three scopes. As exclusions need to be justified, companies will need to quantify 100% of emissions. However, the thresholds enable companies to exclude estimates that are low-quality from public reports to avoid distorting progress.

Key changes

• Financial control becomes the recommended method for determining which emissions are in scope. It should align with which entities and operations are consolidated in the company’s financial statements.
• 99% of Scope 1 and 2 emissions must be accounted for.
• Scope 3 reporting becomes mandatory and 95% of required Scope 3 emissions must be accounted for. Required Scope 3 emissions are determined by the minimum boundary the GHG Protocol has established for each Scope 3 category, which excludes emissions from, for example, the transportation of waste or the life-cycle emissions of vehicles involved in the transportation and distribution of products.
• Exclusions of emission sources must be justified.
• Less stringent requirements may be introduced for SMEs.

What this means for companies

Companies not using the financial control approach will have to move to this approach, which may require a re-baseline, or they will have to justify why they have not used this approach.

Companies must also prepare to undertake more detailed emissions reporting, understanding where gaps exist and how to address them. This will typically require increased engagement with suppliers.

Scope 2 Standard

The proposed changes to the Scope 2 Standard aim to tighten the link between electricity consumption and the emissions attributed to it, reducing the risk of overstated renewable energy claims and improving comparability across companies. More granular data is expected for both location- and market-based methods.

Key changes

• New hierarchy for location-based electricity data:
  • Pick the smallest geographic boundary for which information is available.
  • Use the shortest time interval for which information is available.
  • Use consumption-based data over production based.
• Greater accuracy and evidencing required for market-based method:
  • Hourly matching becomes a must. This means that electricity consumption must be matched to renewable energy generation on an hour-by-hour basis rather than based on an annual average.
  • Electricity sources are more clearly distinguished, i.e. contractual instruments, Standard Supply Service, and the remainder.
  • A residual mix or fossil-only emissions factor must be applied to the remainder. A grid-average factor can no longer be used.
• Provision to estimate hourly data from annual or monthly data using production load profiles.
• SMEs may be exempt from hourly matching requirement.

What this means for companies

Companies will be expected to greatly increase the level of detail of their electricity usage data, and they should engage with suppliers to ensure they can provide this. Companies should be moving towards emissions factors that are based on hourly electricity consumption within the subregion they operate in.

Companies should also assess their current market-based instruments, including PPAs and EACs, to understand what would still be eligible under the new standard.

Scope 3 Standard

The proposed changes to the Scope 3 Standard focus on increased data quality and granularity. The changes seek to address existing gaps and ambiguities in Scope 3 reporting to increase comprehensiveness and comparability.

Note: A document providing a detailed list of proposed changes is yet to be published, therefore the changes listed below are more provisional than the above.

Key changes

• Potential restrictions on the use of secondary data and types of emissions factors.
• Potential phase-out of spend-based estimates with a minimum proportion of supplier-specific data introduced (moving from orange to yellow in the emissions reporting hierarchy, see Figure 1 below).
• Increased clarity on the classification of Scope 3 categories and a wider scope for what is included. For example:
  • Incorporation of emissions from remote working under employee commuting.
  • Mandatory use of ‘with radiative forcing (RF)’ flight emissions factors for business travel.

What this means for companies

Companies should assess whether their current methodologies for calculating emissions align with the new standard. Companies should develop a data improvement plan for their supply chain, identifying gaps and estimations and where activity-based and supplier-specific data could replace spend-based data

Next steps

These changes reflect wider trends in both mandatory and voluntary climate reporting standards. Expectations around the level of detail and accuracy of emissions reporting are rising, as are demands for assurance and integrating climate strategies into financial planning. Once finalised, these standards will set the new benchmark for GHG reporting globally, therefore companies should prepare to align with these changes as soon as possible.

Acclaro’s expertise and comprehensive support around GHG accounting, data quality improvements and supply chain engagement, helps companies incorporate these changes thoroughly and efficiently, capitalising on the greater clarity and certainty they provide around their emissions profile and trajectory.