According to www.esgtoday.com, the GHG Protocol has released a progress update outlining proposed revisions to its Corporate Value Chain (Scope 3) Accounting and Reporting Standard — a foundational framework used globally by supply chain professionals to measure and disclose emissions across value chains.
Core Proposed Changes
The update highlights three major structural and methodological shifts under active development by the GHG Protocol’s Technical Working Group (TWG). First, a new compliance threshold would require companies to report at least 95% of total required Scope 3 emissions to remain in conformance with the standard. This replaces the current language — which states only that companies “shall account for all scope 3 emissions and disclose and justify any exclusions” — with a quantified benchmark. The rationale, as stated in the document, is that the requirement “ensures that all major activities attributable to a reporting company’s business (by emission magnitude) are included,” while permitting exclusion of minor sources up to 5% to allow focused resource allocation.
Second, the GHG Protocol proposes introducing a new Category 16, titled “Other Value Chain Activities.” This category would cover emissions from facilitated activities — such as those generated by third-party operations where the reporting company earns direct, transactional income but never buys, sells, or owns the underlying assets — as well as licensing-related emissions. Most Category 16 reporting would be optional.
Third, revisions to Category 15 (Investments) would clarify that it applies to all companies, not just investment managers. The scope would narrow: financed emissions would remain within Category 15, while other financial services — including insurance and underwriting — would be reclassified to an optional subcategory under the new Category 16.
Data Quality and Transparency Enhancements
To improve reliability and comparability, the proposal includes new data quality requirements. A key measure is the mandatory disaggregation of reported Scope 3 emissions into distinct tiers based on data type (e.g., primary vs. secondary, activity-based vs. spend-based) for each of the 15 existing categories. This aims to increase transparency about input quality and support consistent interpretation across supply chain partners.
Context for Supply Chain Practitioners
Scope 3 emissions — originating upstream (e.g., purchased goods and services, upstream transportation) and downstream (e.g., product use, end-of-life treatment) — typically represent the vast majority of most companies’ carbon footprint, yet remain the most operationally complex to track due to limited control over supplier or customer data. The GHG Protocol, established in 1997 by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), serves as the technical backbone for major global reporting mandates: its standards are integrated into the IFRS Foundation’s ISSB standards and the European Sustainability Reporting Standards (ESRS) underpinning the EU’s Corporate Sustainability Reporting Directive (CSRD). With the current Scope 3 Standard first published in 2011 and comprising 15 categories — including Category 1 (Purchased Goods and Services) and Category 4 (Upstream Transportation and Distribution) — these proposed changes signal a tightening of accountability across global value chains. For procurement, logistics, and sustainability teams, the 95% coverage rule implies intensified pressure to secure Tier 2 and Tier 3 supplier data, invest in digital traceability tools, and align contractual terms with verifiable emissions disclosure. The introduction of Category 16 also expands reporting responsibility beyond traditional ownership or transactional boundaries — particularly relevant for platform-based business models, franchisors, and technology licensors whose value chains increasingly involve facilitated or licensed activities.
Source: www.esgtoday.com
Compiled from international media by the SCI.AI editorial team.
