Greenhouse Gas Protocol Weighs Major Overhaul of Carbon Accounting Rules

In the space of a fortnight, the greenhouse gas protocol, the framework that 97% of disclosing S&P 500 companies use to measure their carbon emissions, has published proposed revisions to its Scope 3 value chain standard, opened a request for information on a new multi-statement reporting structure, and begun processing almost 1,400 responses to a contentious review of how companies account for electricity. For carbon accountants, particularly those still finding their feet in a profession that barely existed a decade ago, the pace is daunting. The rules you are learning to apply are being rewritten in real time.

The protocol divides corporate emissions into three categories. Scope 1 covers direct emissions from a company’s own operations: its boilers, vehicles, and manufacturing processes. Scope 2 covers indirect emissions from purchased electricity, steam, heat, and cooling. Scope 3 captures everything else in the value chain, from raw materials bought from suppliers to how customers use the finished product. Scope 3 is typically the largest share of a company’s footprint and by far the hardest to measure. All three scopes are now being revised simultaneously, with draft standards due for public consultation from mid-2026 and final versions expected by the end of 2027.

What Greenhouse Gas Protocol Scope 2 Changes Mean in Practice

The Scope 2 revision will likely change the daily work of carbon accountants more than any other element of the overhaul. A public consultation that closed on January 31 proposed requiring companies to match their renewable energy certificates with actual electricity consumption on an hourly and geographically specific basis. Under current rules, a company can buy certificates annually from a wind farm on a distant grid and subtract that from its reported total. Under the proposed rules, those certificates would need to come from the same grid region and match the hour in which the electricity was consumed.

In practical terms, this means your energy procurement team can no longer hand you an annual certificate bundle and call it done. You will need access to hourly load data for each facility, or at minimum the load profiles that the greenhouse gas protocol has proposed as a feasibility measure for companies without smart metering. Your certificates will need to demonstrate temporal and geographic alignment, which may require a portfolio approach, combining solar for daytime hours, wind for evenings, and hydro or storage for overnight coverage. EY has warned that tracking, aggregating, and verifying this more granular data would require significant resources, especially for organisations with facilities in multiple regions.

The numbers show why the revision matters. Microsoft’s market-based Scope 2 figure fell to 259,000 metric tons of CO2 in 2024. Its location-based figure, reflecting what the grid actually delivered, approached 10 million metric tons. That gap exists because the current rules allow annual, geographically unbounded certificate matching. According to BloombergNEF, global corporate clean power purchases fell 10% in 2025 to 55.9 gigawatts, the first decline in nearly a decade, with the number of unique US buyers dropping 51% to just 33 as rising costs and policy uncertainty deterred smaller players. Companies are already starting to adjust their procurement strategies before the final rules land.

The organisation is considering exemptions for smaller businesses and a legacy clause for existing contracts. A second consultation draft is expected later this year, with final rules not due until 2027. But if your company uses the market-based method, the time to audit your certificate procurement and talk to your energy suppliers about hourly-matched products is now, not when the standard is finalised.

The Scope 3 95% Rule and What It Means for Your Inventory

The greenhouse gas protocol’s Scope 3 progress update, published on March 31, targets the other end of the problem: the quality and completeness of supply chain data. The headline proposal is a requirement that companies account for at least 95% of their total required Scope 3 emissions. This replaces the existing standard’s vague instruction to report “all” value chain emissions with justified exclusions, language that has allowed companies to quietly omit categories they found difficult or inconvenient to measure.

For carbon accountants, this means reviewing every current exclusion. If you have been leaving out Category 11 (use of sold products) or Category 12 (end-of-life treatment) because the data is poor, the 95% threshold may force you to include them using spend-based estimates as a starting point. A new Category 16 would capture emissions from licensing, underwriting, and insurance that do not fit existing buckets, potentially expanding the scope of what you report.

The more immediate challenge is a proposed requirement to disaggregate Scope 3 data by quality tier and disclose whether each category’s figures are verified, partially verified, or not verified. This is a significant shift. Currently, most companies report a single Scope 3 number alongside Scope 1, with little indication that their Category 1 (purchased goods) data, likely derived from rough spend-based estimates, is fundamentally less reliable than their directly metered Scope 1 figures. Under the proposed rules, that gap would be visible to auditors, investors, and regulators.

Enterprise carbon accounting platforms such as Persefoni and Watershed, which now market directly to chief financial officers, charge $50,000 to $250,000 annually, with third-party assurance adding $20,000 to $100,000. Research published last year found that external assurance measurably improves data quality, but only when the process is thorough enough to identify systemic weaknesses in how data is collected.

A New Greenhouse Gas Protocol Reporting Architecture

On March 31, the organisation published a white paper proposing an entirely new Actions and Market Instruments standard, with feedback open until May 31. Think of it as carbon reporting’s shift from a single-entry ledger to full financial statements. The proposal would move companies from one emissions inventory to four distinct statements: a physical inventory showing actual emissions, a market-based inventory reflecting contractual choices such as green steel certificates, a GHG impact statement quantifying the broader effects of climate spending, and a non-GHG indicators statement tracking financial contributions and intensity ratios.

For practitioners, the implication is that your reporting will eventually need to support multiple parallel outputs from the same underlying data. Companies investing in supply chain decarbonisation projects, purchasing sustainable aviation fuel, or buying carbon credits would have dedicated reporting channels for each, rather than trying to squeeze them into an inventory framework that was never designed for them. A formal consultation on a draft standard is not expected until the third quarter of 2027, but the direction is clear.

What Carbon Accountants Should Prioritise Now

The revised greenhouse gas protocol standards will not take effect before 2028 at the earliest. But the reporting infrastructure, data systems, and supplier relationships needed to comply cannot be built overnight. Carbon Direct, an advisory firm, has recommended that companies begin modelling the impact of hourly matching on their Scope 2 figures immediately, and develop multi-year data improvement plans for Scope 3 categories that currently rely on spend-based estimates.

The key dates are these: a second Scope 2 consultation draft is expected in the second half of 2026; the corporate standard and Scope 3 standard go to public consultation from mid-2026; the AMI request for information closes May 31; and the greenhouse gas protocol’s partnership with ISO, endorsed under the COP30 Action Agenda, targets a unified global framework by 2028. Final standards are expected by the end of 2027.

In the meantime, a rival framework is circling. Carbon Measures, backed by ExxonMobil and led by former EY vice chair Amy Brachio, is promoting a product-level alternative that would effectively eliminate Scope 3 as a reporting category. Whether it gains traction or not, its existence is a reminder that the rules governing your profession are contested, not settled. The best thing a novice carbon accountant can do right now is understand not just the current standard, but where it is heading.