GHG accounting (corporate carbon footprint) explained

What is a Corporate Carbon Footprint (CCF) under the GHG Protocol?

The Corporate Carbon Footprint (CCF) is the complete greenhouse-gas inventory of a company. It captures all emissions arising from business activities -- both direct and indirect. The foundation is the GHG Protocol Corporate Accounting and Reporting Standard, the world's most widely used framework for measuring and reporting corporate greenhouse-gas emissions. It defines uniform system boundaries, calculation methods and quality requirements so that inventories become comparable and auditable.

The three emission scopes: Scope 1, Scope 2 and Scope 3

The GHG Protocol divides emissions into three scopes that together provide the complete picture of a company's greenhouse-gas burden.

• Scope 1 -- direct emissions: emissions from sources owned or controlled by the company (e.g. own combustion facilities, company vehicles, production processes).
• Scope 2 -- energy indirect emissions: emissions from purchased electricity, heat, cooling or steam; they physically occur at the energy supplier but are attributed to the buyer.
• Scope 3 -- other indirect emissions: all remaining emissions along the value chain -- upstream (e.g. purchased goods, transport) and downstream (e.g. use and disposal of products). Scope 3 is usually the largest share for most companies.

CO₂ equivalents and emission factors

Not all greenhouse gases have the same climate impact. The GHG Protocol covers the seven Kyoto gases -- CO₂, CH₄, N₂O, HFCs, PFCs, SF₆ and NF₃ -- and converts them into CO₂ equivalents (CO₂e) using the Global Warming Potential (GWP). Emission factors link activity data (e.g. litres of diesel, kWh of electricity or tonnes of purchased goods) to the resulting CO₂e quantities. Reputable published factors (e.g. IPCC, national environment agencies, IEA, Ecoinvent) are specific by energy carrier, country and year.

Why produce a GHG inventory?

The reasons are regulatory, strategic and operational: companies in scope of the CSRD must disclose quantified greenhouse-gas data under ESRS E1. In addition, Science Based Targets (SBTi) require a complete Scope 1-2-3 inventory as a starting baseline.

• CSRD / ESRS E1: mandatory disclosure of Scope 1, 2 and 3 data plus reduction targets.
• Science Based Targets (SBTi): target validation requires a GHG Protocol-compliant baseline.
• Supply-chain and investor requests: major customers and financing partners increasingly require verified CCF data.

How is a CCF built?

The process follows a structured approach that starts with defining system boundaries and ends with documented reporting.

• Set organizational boundaries (consolidation approach: control or equity share) and determine operational boundaries (which emission sources and Scope 3 categories are material?).
• Collect activity data (energy consumption, purchase volumes, transport services, production data) and assign appropriate emission factors.
• Calculate emissions, apply quality assurance, document and externally verify; then derive reduction targets and measures.

Scope 2: market-based vs. location-based

The GHG Protocol requires two parallel calculation methods for Scope 2. The location-based method uses the average emission factor of the national electricity grid mix. The market-based method reflects energy actually procured: with Guarantees of Origin or Power Purchase Agreements (PPAs) a company can demonstrate that its electricity supply comes from renewable sources and thus report a lower Scope 2 figure.