A customer or lender has asked for your greenhouse gas emissions. Before promising a delivery date, clarify what the number should cover: your company, a site, a product or an order. This article addresses a corporate inventory. The GHG Protocol distinguishes corporate accounting from product life-cycle accounting; one total does not automatically answer both questions. [1, Introduction; 2, section 1.1]
For an exporter in Pakistan or a supplier in the United States, our recommended starting point is the same: make the result reproducible. Someone outside the preparation team should be able to follow the boundary, inputs, calculations and exclusions. The five steps below are how we would sequence the work, on the technical basis of the GHG Protocol.
1. Agree the boundary before asking sites for data
The Corporate Standard offers an equity-share approach or a control approach for consolidating operations. Control may be financial or operational. Under equity share, emissions follow the economic interest; under a control approach, the company accounts for emissions from controlled operations. The choice affects which operations enter the inventory. [1, chapter 3]
Our recommendation is to start with a list of entities, facilities, leases and joint arrangements, then document the chosen approach. Discuss ambiguous cases with the person responsible for the company’s structure and contracts. A list of utility accounts alone is not an explanation of the organizational boundary.
Set the reporting period and designate an inventory owner. Give every contributing site the same instructions about units, dates and supporting records. Ask the requester whether it needs a calendar year or another period. If the available records do not match, agree how the difference will be handled before creating a total that appears more comparable than it is.
Keep a short boundary memo. Include the operations considered, the decision for each, the basis for that decision and the reviewer. When another site joins the exercise, use the memo to decide how to include it. Our aim is a repeatable decision process, not a boundary chosen to fit the easiest records.
2. Separate direct emissions from purchased energy
Scope 1 covers direct emissions from sources the company owns or controls; Scope 2 covers emissions from generating purchased energy consumed by the company. [1, chapter 4; 2, chapter 5] The scope classification follows the boundary decision, not the department that paid an invoice.
For the first collection round, our suggested prompts are fuel use, vehicles, process sources, refrigerant losses and purchased electricity, steam, heat or cooling. Not every source will apply; ask operations to review the list and explain apparent gaps.
The Scope 2 Guidance distinguishes location-based accounting, using grid information, from market-based accounting using qualifying contractual information. Where a company has operations in markets that offer relevant product- or supplier-specific data, the guidance requires it to report Scope 2 emissions using both methods, labeling each result accordingly, and contractual instruments must meet the guidance’s Scope 2 Quality Criteria. [2, sections 1.5, 7.4 and 7.5] Do not assume an electricity contract or certificate automatically justifies a zero-emissions figure.
Our recommendation is to reconcile the collection against the full period. Mark a missing bill as missing, not zero. Ask whether an invoice covers several sites or whether a meter has changed. Record any estimation method and who approved it. This helps prevent an apparently tidy spreadsheet from concealing unresolved coverage questions.
3. Screen the value chain before selecting data requests
The Scope 3 Standard organizes other indirect emissions into 15 upstream and downstream categories. They include purchased goods and services, capital goods, transport, waste, business travel, employee commuting, and the use and end-of-life treatment of sold products. [3, chapter 5] A supplier’s activity can therefore be relevant to a customer’s inventory without becoming the customer’s direct emissions.
Our recommendation is to screen every category, then prioritize collection using estimated scale, relevance to the request and available evidence. For a textile exporter, for example, begin by investigating purchased materials, energy-related activities, freight and waste. For a US component supplier, investigate purchased materials and the treatment of sold products as well.
Record categories that appear inapplicable and explain why. The Scope 3 Standard requires accounting for all Scope 3 emissions and disclosure and justification of exclusions. [3, chapter 5] A first screening can guide work, but it should not be described as a complete inventory merely because the largest apparent categories have been estimated.
Ask suppliers for data only after defining what you need. Specify the activity, period, unit and boundary, and ask for the method behind a supplied emissions figure. Keep the response and its limitations. Sending an undefined request down the supply chain can reproduce the uncertainty you were trying to resolve.
4. Choose factors that match the activity and the question
An emission factor relates an activity, such as fuel consumption, to associated emissions. The Corporate Standard describes calculating emissions from activity data and factors, while recognizing other calculation or measurement approaches. [1, chapter 6] Use the method appropriate to the source; do not treat every inventory line as an identical multiplication.
Our recommendation is to keep a factor register with the publisher, document version, relevant year, geography, unit and gases covered. Record any conversion to carbon dioxide equivalent and the global-warming-potential basis. Check whether a supplied factor already includes that conversion so it is not applied twice.
Exhibit: Keep the calculation beside the evidence that explains it.
| Inventory line | Suggested evidence | Review question |
|---|---|---|
| Fuel consumed | Fuel records, stock adjustments and factor reference | Do the activity unit and factor denominator match? |
| Purchased electricity | Bills, meter list and method-specific factor | Are the location-based and market-based treatments clear? |
| Purchased material | Quantity or spending record and method reference | Does the estimate cover the intended upstream activity? |
| Freight | Shipment record and transport assumptions | Are distance, mass and responsibility documented? |
5. Review the evidence file before releasing the total
Our recommended handover includes the boundary memo, source register, calculations, factor register, exclusions, estimates and review record. Use filenames or stable identifiers that connect each reported figure to its inputs. Preserve the version actually submitted; avoid leaving the only explanation in an email exchange that the next preparer cannot find.
Ask a reviewer to trace selected lines from original evidence to the final total. Check missing periods, unit conversions, duplicated records and differences between sites. Review a small unusual source as well as a large source. A reasonable-looking total is not evidence that every line was handled correctly.
End with an improvement list tied to the next request: which estimates need better records, which boundaries need clarification and which suppliers need a more precise question. Keep the list proportionate to the decision the inventory supports.
For your next step:
- Confirm the requested boundary, period and output in writing.
- Assign owners for the boundary memo, source records and factor review.
- Complete a traceable trial calculation before collecting the rest of the inventory.
Related service: GHG accounting. Talk to us.
As of November 12, 2026. This guide explains the cited editions; confirm the reporting program’s current requirements before submission.
Sources
[1] WRI and WBCSD, The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, revised edition, March 2004, Introduction and chapters 3, 4 and 6. Retrieved November 11, 2026. Corporate Standard.
[2] WRI and WBCSD, GHG Protocol Scope 2 Guidance, January 2015, sections 1.1, 1.5, 7.4 and 7.5, including the Scope 2 Quality Criteria. Retrieved November 11, 2026. Guidance.
[3] WRI and WBCSD, Corporate Value Chain (Scope 3) Accounting and Reporting Standard, 2011, chapter 5 and table 5.4. Retrieved November 11, 2026. Standard.
