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GHG Protocol Use within ISSB’s IFRS S2 Standard Enables Widespread Adoption of a Common Standard for GHG Accounting

Greenhouse Gas Protocol (GHG Protocol), initiated in 1998, was established to create a common framework for organizations to account for the GHG emissions resulting from their operations. Two and a half decades later, the GHG Protocol Corporate Accounting and Reporting Standard, first published in 2001 and revised in 2004, has become the world’s most widely used GHG accounting standard. In 2021, the formation of the International Sustainability Standards Board (ISSB) by the IFRS Foundation led to the June 2023 issuance of IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information, and IFRS S2, Climate-related Disclosures. A key aspect of IFRS S2 is the requirement for companies to measure their greenhouse gas emissions in accordance with GHG Protocol, unless it is otherwise specified by a jurisdictional authority or stock exchange. The alignment means companies that already measure scope 1, 2 and 3 GHG emissions using the Corporate Standard (2004) and Corporate Value Chain (Scope 3) Standard (2011) (Scope 3 Standard (2011)) will be well positioned to measure GHG emissions in accordance with IFRS S2. As GHG Protocol undertakes its own standards development process, GHG Protocol and the ISSB are continuing to work together to foster impactful collaboration and promote clarity within the GHG accounting ecosystem.

About GHG Protocol  

GHG Protocol is an NGO-business partnership initiative led by World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) that was launched in 1998 to establish standardized methods for GHG accounting and address the need for a globally agreed-upon methodology. Since initial publication of the Corporate Standard (2004), GHG Protocol has developed 25 additional GHG accounting standards and guidance documents, including the Scope 3 Standard (2011), the Scope 2 Guidance, the Policy and Action Standard, the Project Accounting Standard, the Mitigation Goal Standard, the Product Life Cycle Standard and the GHG Protocol for Cities. All GHG Protocol standards and guidance are developed through a global multi-stakeholder consultation process that draws inputs and facilitates consensus among businesses, academia, governments, industry groups, NGOs and civil society. The Corporate Standard (2004) was designed to be policy and program neutral such that relevant parts of the standard can be adopted by policymakers and architects of GHG programs. 

About the IFRS Foundation 

The IFRS Foundation is a not-for-profit, public interest organization established in 2001 to develop high-quality, understandable, enforceable, and globally accepted financial accounting standards. The IFRS Foundation is best known for its International Accounting Standards Board (IASB), which sets forth the world’s most widely used financial accounting standards. IFRS financial accounting standards are required for use by more than 140 jurisdictions around the world, including those in the European Union. In 2021, following increased market demand for a comprehensive global baseline of sustainability disclosure standards that focus on the needs of investors and financial markets, the Trustees of the IFRS Foundation announced the formation of the ISSB. The ISSB represents the result of strong market demand from investors, companies and international policy makers, including the G20, G7, IOSCO and the Financial Stability Board, for decision-useful, globally comparable sustainability-related financial disclosures for capital markets. The ISSB operates alongside, although independent of, the IASB to develop comprehensive sustainability-related financial disclosure requirements to accompany the financial reporting standards of IFRS.  

The ISSB builds on the work of the Task Force for Climate-related Financial Disclosures (TCFD), the Climate Disclosure Standards Board (CDSB), the Value Reporting Foundation’s Integrated Reporting Framework and the industry-based SASB Standards, as well as the World Economic Forum’s Stakeholder Capitalism Metrics. These initiatives, which all aim to integrate financial and environmental reporting topics into their respective frameworks, have historically referenced GHG Protocol standards as their foundation for GHG accounting and reporting. In June 2023, the ISSB issued IFRS S1 and IFRS S2. IFRS S1 is the general requirements standard for the disclosure of material information about sustainability-related risks and opportunities that is useful to users of general purpose financial reports in making decisions relating to providing resources to the entity. IFRS S2 is a thematic standard that sets out requirements for entities to disclose information about climate-related risks and opportunities that is useful to users of general purpose financial reports in making decisions relating to providing resources to the entity. 

Measurement of GHG Emissions  

In working toward a common GHG accounting standard adhered to by all, IFRS S2 requires GHG emissions reporting by scope (1, 2, and 3) to be measured in accordance with the GHG Protocol Corporate Standard (2004). An entity shall apply the requirements in the Corporate Standard (2004) only to the extent that they do not conflict with the requirements in IFRS S2. For example, the Corporate Standard (2004) does not currently require an entity to disclose its scope 3 greenhouse gas emissions, however, the following IFRS S2, an entity is required to disclose scope 3 greenhouse gas emissions in accordance with IFRS S2 paragraph 29(a). IFRS S2 requires the disclosure of the categories included within the entity’s measure of scope 3 greenhouse gas emissions in accordance with the scope 3 categories described in the Scope 3 Standard (2011). IFRS S2’s requirement that entities disclose their scope 3 GHG emissions is an important advancement in GHG emission reporting standardization.  

The table below provides more information on areas of alignment and differences between the GHG Corporate Standard (2004) and IFRS S2. For more details on IFRS S2 requirements for companies to measure scope 1, 2, 3 GHG emissions in accordance with the Corporate Standard (2004) see IFRS S2. 

Alignments and Differences Between GHG Protocol and IFRS S2

Standard Design Objectives Organizational Boundaries Operational Boundaries Scope 2 Scope 3 
GHG Protocol Corporate Standard (2004) Designed to be program or policy neutral to support multiple reporting objectives and audiences Choice among operational control, financial control, or equity share Scope 1 and 2  

1. Location based  

2. Market based, in markets where product or supplier-specific data in the form of contractual instruments exists 

Scope 3 reporting optional in Corporate Standard (2004); 15 categories required in Scope 3 Standard (2011) 
IFRS S2 Designed to meet investor needs  Choice among operational control, financial control, or equity share Scope 1, 2, and 3 

1. Location-based  

2. Disclosure of information about contractual instruments that could inform users’ understanding of the entity’s Scope 2 greenhouse gas emissions (might include information about market-based Scope 2 GHG emissions as part of this disclosure). 

Scope 3 GHG emissions required if material, using IFRS S2 measurement framework, and with consideration of the categories found in the GHG Protocol Scope 3 Standard 






Adoption of IFRS S2 into Regulatory Frameworks Enables Widespread Use of a Common Standard

IFRS S2 is currently being adopted into regulatory frameworks, including in Turkey, Nigeria, Sri Lanka, Brazil and Costa Rica. Other governments have expressed intention to make IFRS S2 mandatory, including in Canada, the UK, Japan and Singapore, among others. It is expected that IFRS S2 will continue to be adopted by jurisdictional authorities around the world as GHG emission disclosure becomes common practice to meet investor needs. Building off the GHG Protocol Corporate Standard (2004), the ISSB’s standards have been developed to meet the needs of financial markets globally. As such, they provide a global baseline for sustainability-related financial disclosures. They have been endorsed by the international bodies of securities regulators, IOSCO, which has encouraged its members to consider how they can adopt or otherwise use the ISSB Standards in their regulatory frameworks. 

The use of the GHG Protocol Corporate Standard (2004) into IFRS Sustainability Disclosure Standards will continue to scale the implementation of a common corporate GHG accounting and reporting standard, leading to consistency, comparability and simplicity for preparers and users of non-financial reports.

Twenty years after the publication of the GHG Protocol Corporate Standard (2004), ISSB’s use of the standard exemplifies a complementary and impactful collaboration between the two organizations. ISSB serves a key role in being the connective glue between the GHG accounting standard-setting community and the preparers of general purpose financial reports that meet investor needs.  

GHG Protocol, which remains fit for purpose in its role of designing GHG accounting standards that meet multiple objectives for use by various audiences, has seen a similar adoption of all or part of its Corporate Standard (2004) and Scope 3 Standard (2011) within global policy and regulatory mandates in the last year. The European Commission passed the Corporate Sustainability Reporting Directive in 2023 which will require organizations to disclose scope 1, 2 and 3 emissions following GHG Protocol standards. The United States Securities and Exchange Commission finalized a rule in March 2024 that will require all publicly traded U.S. companies to report their scope 1 and 2 emissions, also referencing GHG Protocol as the common standard by which to find implementation guidance. Notably, the Corporate Standard (2004) has also been incorporated in various climate action and disclosure programs, including serving as the foundation of net-zero target-setting and emission reduction goals set voluntarily by organizations in line with the Science Based Targets Initiative (SBTi), CDP, GRI and beyond. These different programs depend on the interoperability and adaptability of GHG Protocol standards and guidance to serve unique purposes.  

The collaboration between GHG Protocol and the ISSB marks a pivotal moment in standardizing corporate GHG reporting globally. By referencing the Corporate Standard (2004) in IFRS Sustainability Disclosure Standards, a common global standard for GHG accounting and reporting is emerging, meeting the demands of investors and financial markets for transparent sustainability disclosure.  

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