Understanding the GHG Protocol — The Standard Behind Scope 3 Reporting

15 Scope 3 Categories

2,300+ Stakeholders Involved

55 Countries Represented

2011 Standard Released

What Is the GHG Protocol?

The GHG Protocol is the world's most widely used greenhouse gas accounting framework, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), in partnership with the Carbon Trust.

It defines three scopes of emissions:

Scope 1 — Direct emissions from owned or controlled sources (e.g., company vehicles, on-site fuel combustion)
Scope 2 — Indirect emissions from purchased energy (electricity, heating, cooling)
Scope 3 — All other indirect emissions across the value chain (upstream and downstream)

For most companies, Scope 3 represents 70–90% of total emissions. The GHG Protocol's Corporate Value Chain (Scope 3) Standard provides the methodology to account for these value chain emissions across 15 defined categories.

The 15 Scope 3 Categories

The GHG Protocol divides value chain emissions into 15 categories — 8 upstream and 7 downstream:

Upstream Categories (1–8)

Cat	Category Name	Example Activities
1	Purchased goods & services	Raw materials, office supplies, outsourced services
2	Capital goods	Manufacturing equipment, buildings, vehicles acquired
3	Fuel- and energy-related activities	Upstream fuel production, T&D losses, WTT emissions
4	Upstream transportation	Inbound freight, third-party logistics
5	Waste generated in operations	Landfill, recycling, incineration of operational waste
6	Business travel	Flights, rail, rental cars, hotel stays
7	Employee commuting	Daily travel to work, homeworking electricity
8	Upstream leased assets	Leased offices, vehicles, equipment (not in Scope 1/2)

Downstream Categories (9–15)

Cat	Category Name	Example Activities
9	Downstream transportation	Outbound freight to customers
10	Processing of sold products	Energy used by third parties to process your products
11	Use of sold products	Energy/fuel consumed when customers use your products
12	End-of-life treatment	Disposal, recycling, or landfill of sold products
13	Downstream leased assets	Emissions from assets you lease to others
14	Franchises	Emissions from franchise operations
15	Investments	Emissions from equity investments, project finance

GHG Protocol vs DESNZ — Two Layers, One Calculation

A common point of confusion: the GHG Protocol and DESNZ conversion factors serve different but complementary roles:

Think of it this way: The GHG Protocol is the recipe — it tells you what to measure, which categories to report, and which calculation methods are valid. DESNZ provides the ingredients — the actual emission factor numbers (kg CO₂e per unit) you multiply your activity data by.

	GHG Protocol	DESNZ Conversion Factors
Type	Reporting standard / framework	Emission factor dataset
Published by	WRI + WBCSD (international)	UK Government — DESNZ (national)
Provides	Categories, boundaries, calculation methods	7,029 CO₂e conversion factors
Updated	Periodically (last major revision: 2013)	Annually (latest: 2025)
In BARGO’s tooling	Defines how we structure reports and categories	Provides the numbers our engine multiplies

Calculation Methods per Category

The GHG Protocol defines multiple calculation methods for each category. Companies choose the method based on data availability:

Supplier-specific method — Use actual emission data from your suppliers (highest accuracy)
Hybrid method — Combine supplier-specific data with secondary data where gaps exist
Average-data method — Use industry-average emission factors (e.g., DESNZ) × activity data
Spend-based method — Use economic input-output factors × procurement spend (lowest accuracy)

BARGO’s tooling currently implements the average-data method using DESNZ government emission factors — the most practical approach for mid-market companies starting their Scope 3 journey. As your data maturity grows, the platform supports increasingly precise methods.

Why This Matters for CSRD

The EU Corporate Sustainability Reporting Directive (CSRD) requires companies to report under ESRS E1 — Climate Change. ESRS E1 references the GHG Protocol as the basis for Scope 3 accounting:

ESRS E1-6 par. 44(c) — gross Scope 3 GHG emissions in metric tonnes of CO₂eq (disclosure detailed in par. 51)
Companies must identify which categories are material and calculate accordingly
Reports must specify the methodology version and emission factor sources used
Auditors will cross-reference your calculations against both the GHG Protocol standard and the factor dataset

Audit-Ready by Design Every BARGO calculation persists the active methodology version, an immutable snapshot of the factor used at calculation time, and the GHG Protocol category reference — giving auditors a complete chain from reported number → calculation → emission factor → official government dataset.

Getting Started

BARGO’s tooling handles all 15 GHG Protocol Scope 3 categories with built-in DESNZ factor lookup. To begin:

Create your account at the B2B Portal
Select your preferred factor dataset in Settings → Methodology
Upload your activity data (CSV/XLSX) or use the REST API
Our engine applies the correct DESNZ factors per GHG Protocol category
Generate ESRS-compliant reports with full audit trail

Source: GHG Protocol — Scope 3 Calculation Guidance · Corporate Value Chain (Scope 3) Standard