GHG Accounting: Everything You Need to Know in 2026

Today, owing to climate change, GHG accounting, short for Greenhouse Gas Accounting, is no longer seen as an everyday sustainability effort. It, along with the various sustainability management software that help achieve it, has instead gone on to become a global business must-have.

For the unversed, GHG accounting, means tracking a company’s greenhouse gas emissions to help it understand its climate impact and find ways to reduce emissions effectively.

If statistics are to be relied upon, the world in 2024 alone released over 53.2 gigatons of CO₂-equivalent emissions, with fossil CO₂ accounting for nearly 75%. As a result, companies are under increasing pressure from regulators, investors, and global partners to ensure transparent and accurate emissions reporting.

This pressure means businesses need to adopt GHG emissions accounting fast or risk falling behind in funding and reputation. If you too are looking to achieve the same for your company, keep reading…

What is GHG Accounting?

GHG accounting is the process of identifying, measuring, and reporting greenhouse gas emissions from business activities. The aim is to measure and manage emissions.

The data received thusly helps companies get a clear picture of their environmental impact, identify where emissions can be reduced, and monitor progress over time. For instance, a manufacturing company might find that 60% of its emissions come from natural gas boilers, leading it to switch to cleaner fuels.

Also, people often get confused between the two, but GHG accounting is different from carbon footprinting. Carbon footprinting focuses only on CO2 for a single year. GHG accounting, on the other hand, covers all seven major greenhouse gases, uses set calculation methods, and supports tracking over multiple years. This makes it an accurate tool for emissions reporting.

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Why is GHG Accounting Important?

GHG accounting directly supports emission reductions and climate action. If, for instance, a retail chain measures Scope 1 fleet emissions, it can work on it by replacing its, say, gas trucks with electric models, cutting thousands of tons of CO2 yearly.

Regulatory frameworks tie directly to GHG emissions accounting. The Paris Agreement asks all countries to aim for net-zero emissions by 2050, which pushes businesses to follow suit. In the USA, the SEC now requires companies to report detailed GHG emissions and climate-related risks.

In India, SEBI’s Business Responsibility and Sustainability Reporting (BRSR) framework makes it mandatory for the top 1,000 listed companies to disclose Scope 1, 2, and 3 emissions.

Businesses also benefit from GHG accounting. Energy audits often uncover 10-20% savings through simple steps like switching to LED lighting. Publishing GHG reports builds customer trust too. About 74% of consumers world over prefer brands that share their emissions data.

Managing risk is another big benefit. In India, companies that fail to meet targets under the upcoming Carbon Credit Trading Scheme may face penalties twice the average carbon credit price. Supply chains can also break if partners demand verified data. Tata Group, for example, requires sustainability disclosures from its suppliers.

Doing GHG accounting early thus helps businesses avoid these problems.

Key Principles of GHG Accounting

These 5 principles form the foundation of greenhouse gas accounting…

• Transparency: It means clearly showing how you calculate emissions, your methods, assumptions, and data sources. For example, a logistics company might share GPS truck logs and fuel invoices so others can check the numbers.
• Accuracy: It means getting measurements as close to real values as possible. Instead of relying only on utility bills, install submeters on high-use equipment.
• Completeness: It means including all emission sources within your set boundaries. If remote work reduces commuting emissions, note it. A tech company should include leased data centers too.
• Consistency: It means using the same methods every time. For example, measure office electricity the same way each quarter, don’t switch between estimates and actual readings.
• Relevance: It means focusing on emissions that matter most. A clothing brand should track cotton farming emissions over minor packaging because cotton makes up 80% of its footprint.

These principles make GHG accounting accurate and useful for decision-making.

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GHG Protocol and Standards

The GHG Protocol is the main standard for greenhouse gas accounting, used by 90% of Fortune 500 companies. Created by the World Resources Institute and WBCSD, it offers free guides, calculation tools, and reporting templates. Its corporate standard covers most business needs.

And other frameworks support it. ISO 14064 helps with independent verification of GHG data. CDP collects global disclosure information, often based on the GHG Protocol. The Science-Based Targets initiative (SBTi) sets emission reduction goals aligned with climate science.

Following these standards helps build trust. Investors can compare reports using the same rules, and regulators accept data that follows these protocols without question.

Understanding Emission Scopes

The GHG protocol divides emissions into 3 scopes for clear GHG accounting…

Scope 1: Direct emissions from sources a company owns or controls. Examples include boilers burning natural gas, trucks using diesel, or chemical reactions in production. A bakery’s oven counts here.

Scope 2: Indirect emissions from purchased energy. This includes electricity for factories, steam for heating, or district cooling. Even if the power plant is far away, your energy bill links those emissions to you.

Scope 3: All other indirect emissions across the value chain. Upstream covers purchased goods, supplier transport, and raw materials. Downstream includes business travel, employee commuting, waste disposal, and product use. Scope 3 often makes up 70–90% of total emissions.

How Does GHG Accounting Work?

GHG accounting uses a five-step process. Practical tips make it manageable.

Step 1: Define Organizational Boundaries

Decide how you will define your organization, by equity share, financial control, or operational control. For example, a U.S. manufacturer with overseas plants might choose operational control if its managers run those sites. So, write down your choice clearly.

Step 2: Identify Emission Sources

List all activities that create emissions and group them by scope. Check purchase orders for materials and travel logs for flights. For the same, talk to department heads.

Step 3: Collect Data

Collect utility bills, fuel logs, vehicle mileage, and supplier reports. A retailer might use 12 months of data for accuracy. So, automate with API connections to vendors.

Step 4: Calculate Emissions

Multiply your activity data by emission factors from EPA or GHG Protocol. For example, one gallon of gas is equal to 8.78 lbs CO2e. Convert methane using its global warming potential (GWP) of 25 over 100 years. Start with Excel calculators, then move to software.

Step 5: Report & Verify

Publish an annual report showing emissions by scope and your reduction plans. Hire ISO 14064 verifiers for assurance. Begin internal reviews with finance teams who know data quality.

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Softwares for GHG Accounting

Here are some of the leading sustainability management software solutions that help make GHG accounting easy…

Common Challenges in GHG Accounting & How to Overcome Them

Data collection is often the hardest part of GHG accounting because information sits in different departments. The fix? Create one central database that connects HR, procurement, and facilities.

Scope 3 can feel overwhelming since it involves hundreds of suppliers. A smart approach is to start with the top 20 suppliers by spend, then use economic models and later gather detailed data from partners.

Skill gaps further slow progress, but you can solve this by working with consultants in the first year and then training your team.

Conclusion

GHG accounting, thus, is important in a world where greenhouse gases pose a severe threat to mankind and brands and businesses, as their biggest contributors, are let off scot-free.

So, begin your GHG emissions accounting today itself. If you need technological help, know that Techjockey is just a call away!