Greenhouse Gas Inventory Guide: GHG Protocol and ISO 14064

A company's carbon strategy starts with knowing how much it emits. A greenhouse gas inventory answers that question: a structured record showing which sources and which gases produced how much emissions, within defined boundaries, over a given reporting period. If the inventory is poorly built, everything built on top of it (targets, the roadmap, the SBTi submission, CBAM data or the product footprint sent to a customer) rests on weak ground.

This guide explains how a corporate carbon inventory is prepared using the two core frameworks: the GHG Protocol Corporate Standard and the ISO 14064 series. Each section links to a sub-guide with more detail. For the practical side of the calculation, that is, the formulas for natural gas, electricity and vehicle emissions, see the carbon footprint calculation guide.

What is a greenhouse gas inventory?

The GHG Protocol Corporate Standard is the accounting and reporting standard written for companies and other organizations preparing a greenhouse gas inventory. Its first edition was published in September 2001; the revised edition in use today dates from 2004. The standard lists the business goals a well-designed inventory can serve: managing GHG risks and identifying reduction opportunities, public reporting and participation in voluntary programmes, participation in mandatory reporting programmes, participation in carbon markets, and recognition for early voluntary action.

An inventory has four components:

1. Boundary: Which companies, facilities and activities are included?
2. Sources: Which combustion, process, fugitive and indirect sources within the boundary cause emissions?
3. Calculation: Activity data, an emission factor and the global warming potential (GWP) for each source.
4. Record keeping: An audit trail documenting assumptions, data sources and changes.

The gases covered by the inventory were originally the six Kyoto Protocol gases: CO₂, CH₄, N₂O, HFCs, PFCs and SF₆. The GHG Protocol later published an amendment adding nitrogen trifluoride (NF₃) to the required gases; the Scope 3 Calculation Guidance states that this amendment supersedes the original requirements of the Scope 3 Standard. GWP values should be based on a 100-year time horizon, and their source should be disclosed.

GHG Protocol and ISO 14064: two frameworks, one goal

The GHG Protocol Corporate Standard works like an accounting manual: it explains, with detailed examples, how to draw boundaries, how to split emissions into scopes and when to recalculate the base year. The Scope 2 Guidance published in 2015, the Scope 3 Standard published in 2011 and the Scope 3 Calculation Guidance from 2013 complete this foundation.

ISO 14064-1:2018 is the international standard that sets out principles and requirements for quantifying and reporting greenhouse gas emissions and removals at the organization level. According to ISO's page, the second edition was published in December 2018 and was reviewed and confirmed in 2024; the standard currently appears to be under revision. Instead of scopes, ISO 14064-1 groups emissions into six categories: direct emissions and removals, indirect emissions from imported energy, indirect emissions from transportation, indirect emissions from products used by the organization, indirect emissions associated with the use of products from the organization, and indirect emissions from other sources. Roughly, the first category corresponds to scope 1 and the second to scope 2; the others divide scope 3 along different lines.

ISO 14064-3:2019 is the standard for verification and validation; it applies to GHG statements at the organization, project and product level.

The two frameworks are converging. According to the GHG Protocol's Standard Development Plan of July 2026, the GHG Protocol and ISO announced a strategic partnership in September 2025 to develop corporate carbon accounting standards jointly. The Corporate Standard, the Scope 2 Guidance and the Scope 3 Standard will be combined into a single unified standard (Version 3.0), which is expected to be published under joint branding with ISO. The estimated timeline in the plan: the unified draft opens for public consultation in the second quarter of 2027 and is published in the last quarter of 2028. In other words, inventories prepared today continue to follow the current 2004 standard and the 2015 Scope 2 Guidance. For our discussion of which to use when, see: GHG Protocol or ISO 14064?

Five accounting principles

The GHG Protocol states that an inventory should be based on the following five principles. They are especially decisive where the standard does not give a clear answer.

The standard gives an important warning about completeness: a "materiality threshold" that excludes sources below a certain size from the inventory from the outset is not compatible with the completeness principle. To show that a source falls below the threshold, you have to calculate it anyway. Where data are missing, the exclusion should be clearly documented and the verifier should assess its effect. The practical test of transparency is this: a third party given the same source data should be able to arrive at the same result.

Boundaries: organizational and operational

The first and most debated decision in an inventory is the boundary. It has two stages.

The organizational boundary determines which companies and facilities enter the inventory and in what proportion. The GHG Protocol recognizes two approaches: the equity share approach (accounting for emissions in proportion to economic interest) and the control approach. Under the control approach, the company takes 100% of the emissions from operations it controls; it must choose whether to define control by the financial or the operational control criterion. The chosen approach must be applied consistently across all levels of the company. Detailed examples for joint ventures, leased assets and franchises are in the organizational and operational boundaries guide.

The operational boundary determines how emissions within the organizational boundary are classified as direct and indirect. This is where scopes come in.

Our guides on sector-specific boundary decisions: cement, iron and steel, automotive suppliers, textiles and apparel, food and beverage, logistics and transport, retail, technology and telecoms, finance and insurance.

Scopes 1, 2 and 3

• Scope 1: Direct emissions from sources owned or controlled by the company. Boilers, furnaces, company vehicles, process emissions (for example limestone calcination in clinker production) and refrigerant leaks.
• Scope 2: Indirect emissions from the generation of purchased and consumed electricity, steam, heating and cooling.
• Scope 3: All other indirect emissions in the value chain. The Scope 3 Standard divides them into 15 categories.

The Corporate Standard sets the separate calculation and reporting of scopes 1 and 2 as the minimum requirement. Direct CO₂ from burning biomass is not added to scope 1 but reported separately. The Scope 2 Guidance (2015) added a "dual reporting" requirement to this framework: companies operating in markets where contractual instruments are available (for example energy attribute certificates such as YEK-G, Türkiye's renewable energy guarantee of origin, or I-RECs) calculate scope 2 using both the location-based and the market-based method and report them under separate labels. We discuss how the two methods are applied in practice in our post on location-based and market-based scope 2.

A company applying the Scope 3 Standard must account for all scope 3 emissions and disclose and justify every exclusion. The classification of more than 25 sources with examples from Turkish industry is in the scope 1, 2 and 3 guide, and calculation methods by category are in the scope 3 categories guide.

Base year and recalculation

To compare emissions meaningfully over time, you need a reference point. According to the GHG Protocol, a company should choose a base year for which verifiable data are available and explain why it chose that year. A single year can be chosen, or an average of several consecutive years can be used.

The company must also write a base year recalculation policy. The following trigger a recalculation when they have a significant impact on base year emissions:

• Structural changes such as mergers, acquisitions, divestments, outsourcing or insourcing of activities
• Changes in calculation methodology or improvements in the accuracy of emission factors or activity data
• Discovery of a significant error, or of a number of errors that are significant in aggregate

Organic growth or decline does not trigger a recalculation, because the emissions released to the atmosphere have actually changed. The company itself defines and discloses what counts as "significant". The Scope 3 Standard gives as an example a change that alters base year emissions by at least 10%. The SBTi's Net-Zero Standard V2.0, published in June 2026, makes a 5% threshold mandatory for the target base year. For details and a worked example, see the base year guide.

Data management and quality control

The quality of an inventory is usually determined by the data, not the calculation method. The GHG Protocol says so explicitly: no methodology can compensate for poor input data. The standard proposes seven steps for an inventory quality management system:

1. Establish an inventory quality team
2. Develop a quality management plan
3. Perform generic quality checks (unit conversions, formulas, version control)
4. Perform source-specific quality checks
5. Put final estimates and the report through internal technical and management review
6. Set up formal feedback loops to correct findings
7. Establish reporting, documentation and archiving procedures

Generic checks include sampling input data to look for transcription errors, checking that units are carried correctly through the calculation, roughly reproducing a calculation by hand, and checking the consistency of the time series. The standard recommends that year-on-year changes above 10% be examined separately. Converting fuel consumption into energy units before applying carbon-content-based factors is another of its recommendations for improving accuracy.

In our experience, the most efficient set-up is to tie inventory data to the financial closing calendar: invoices, meter readings, fuel purchase records and refrigerant service forms go to a designated data owner within the same month, and assumptions are kept in a single methodology note. For a detailed discussion of emission factor selection, see our post IPCC, DEFRA or EPA?

Uncertainty

The GHG Protocol divides inventory uncertainty into two groups. Scientific uncertainty arises because the emission process itself is not fully understood, for example the uncertainty in GWP values. Quantifying it is beyond the capacity of most companies. Estimation uncertainty is present in every calculation and has two parts: model (equation) uncertainty and parameter (activity data and emission factor) uncertainty. In practice, companies can focus on parameter uncertainty, using statistical analysis, information on meter precision and expert judgement.

The standard makes an honest observation: uncertainty estimates often contain a subjective component and cannot be used as an objective measure to compare quality across companies or source categories. They are still valuable, because they force a systematic look at data quality, open a channel of communication with data providers and show where improvement efforts should go. In practice, this means improving data quality starting with the items that have both the highest uncertainty and the largest emissions.

Verification: ISO 14064-3, limited and reasonable assurance

Verification is the objective assessment of the accuracy and completeness of reported GHG information and its conformity with predefined accounting principles. The GHG Protocol recognizes internal verification (by internal staff independent of the inventory process) and external, independent third-party verification, and notes that the latter markedly increases credibility for external users.

At the heart of verification is the concept of materiality. A material discrepancy is an error that makes the reported figure differ from the true figure enough to influence a user's decision. According to the GHG Protocol, as a general rule of thumb an error that exceeds 5% of the total inventory for the part being verified is considered material. But context is decisive: a 2% error can also be considered material if it prevents the company from meeting its target.

There are two levels of assurance:

According to the Scope 3 Standard, reasonable assurance is the highest level that can be provided; absolute assurance is never given, because testing 100% of all inputs is not feasible in practice. The SBTi Net-Zero Standard V2.0 requires Category A companies to obtain independent third-party assurance of at least limited level for the target base year inventory.

Preparing for verification matters as much as the inventory itself. The first things a verifier will ask for: the organization chart and ownership structure, joint venture and lease agreements, invoices and meter records, calibration certificates, the rationale for the factors used and the list of exclusions. A management statement without documentation cannot be verified. For a practical checklist, see: The first 10 things checked in emissions verification.

Monitoring, reporting and verification in Türkiye

For many years, GHG monitoring obligations in Türkiye were governed by the Regulation on Monitoring of Greenhouse Gas Emissions (Sera Gazı Emisyonlarının Takibi Hakkında Yönetmelik) of 17 May 2014. That regulation was repealed by the Turkish Emissions Trading System Regulation (Türkiye Emisyon Ticaret Sistemi Yönetmeliği), published in the Official Gazette (Resmî Gazete) of 27 August 2026, issue 33353; references to the old regulation are deemed to refer to the new one. The new regulation is based on Climate Law No. 7552 of 2 July 2025. Its key provisions:

• Operators carrying out the activities listed in Annex 1 (EK-1) report the emissions and activity levels monitored for the previous year's 1 January-31 December period to the Climate Change Presidency (Başkanlık) by 30 April each year.
• The emissions report must be verified before it is submitted to the Presidency; verification is carried out by verification bodies assigned through MEDAS.
• Installations are classified by their annual emissions, calculated conservatively on the basis of installed capacity: 50,000 tCO₂e or less is Category A, between 50,000 and 500,000 tCO₂e is Category B, and above 500,000 tCO₂e is Category C. The Emissions Trading System (TR ETS) covers Category B and C installations; Annex 1 installations outside the ETS remain subject to monitoring, reporting and verification obligations.

There is an important distinction here: this system is installation-based and tied to a list of activities. A corporate inventory, on the other hand, covers all of a company's facilities, offices, vehicle fleet and value chain. The installation report a cement or iron and steel company prepares for the ETS is an important part of the scope 1 data in its corporate inventory, but not all of it. Feeding both systems from the same records is the best approach, both for consistency and for workload. For details on the ETS, see the Turkish Emissions Trading System guide.

Another driver of corporate inventories is sustainability reporting. According to Türkiye's 2053 Long-Term Climate Strategy, the Board Decision on the scope of application of the Turkish Sustainability Reporting Standards (TSRS) was published on 29 December 2023, and businesses exceeding the threshold values became obliged to prepare sustainability reports from 1 January 2024.

Reporting: what should an inventory report include?

A public report in line with the GHG Protocol should include at least the following:

• A description of the organizational boundary, including the chosen consolidation approach
• The operational boundary and, if scope 3 is included, which activities are covered
• The reporting period
• Separate totals for scope 1 and scope 2, independent of any emissions trading transactions
• Biogenic CO₂ reported separately from the scopes
• The methodologies used and references to calculation tools
• Any exclusions of sources, facilities or activities
• The base year, an emissions profile consistent with the recalculation policy, and context for significant changes that triggered recalculation

The standard also lists reporting gases separately, intensity ratios (for example emissions per tonne of product), an external assurance statement and uncertainty information as optional but recommended information.

A practical sequence for your first inventory

1. Purpose: Is the inventory for TSRS, the SBTi, CDP, a customer request or internal management? The purpose sets the boundary and the expected data quality.
2. Organizational boundary: Choose the consolidation approach and verify the full list of legal entities and facilities with the finance team.
3. Source list: List scope 1 and 2 sources for each facility; screen the 15 scope 3 categories.
4. Data collection: Define data owners, format and timeline.
5. Calculation: Choose factors with a clear source and year, and have a second person check the calculations.
6. Base year and policy: Put the base year and the recalculation threshold in writing.
7. Review and verification: After internal review, external verification under ISO 14064-3 where needed.
8. Report and improvement plan: Link next year's data quality goals to the report.

Building your inventory with Alalëa

At Alalëa, we build corporate inventories that are aligned with the GHG Protocol and ISO 14064-1 and ready for verification: documenting boundary decisions, scope 3 screening, data collection templates, the base year policy and managing the process of working with the verifier. If your inventory will serve as the basis for an SBTi target, CBAM or TSRS, designing it for those uses from the start reduces later recalculations. For details, see our carbon footprint service or get in touch with us.