A GHG inventory is a company’s record of its greenhouse gas emissions by source, organized into Scope 1, 2 and (where relevant) 3 and expressed in tCO₂e, together with the procedures, data paths and evidence needed to reproduce it each year.
What a GHG inventory is
The term covers two things. As an output, it is the table and report of emissions by site, source and activity, grouped into Scope 1, 2 and (where relevant) 3 and totaled in tCO₂e. As a system, it is the set of procedures, data sources, calculation methods and review records that let you rebuild that table the same way every year. “Building an inventory” usually means the second.
Three references divide the work. The IPCC Guidelines set methods for national inventories and are the source of most calculation methods. The GHG Protocol Corporate Standard tells companies how to build their own inventory. ISO 14064-1 expresses similar principles as requirements that verifiers can test against. For boundaries, methods and factor tiers, see GHG emissions calculation.
Who asks for it
- Disclosure. IFRS S2 and ESRS E1 require group-level Scope 1, 2 and 3 emissions and an explanation of how they were measured.
- Customers and ratings. Supply chain questionnaires and ratings such as CDP ask for Scope 1 and 2, both Scope 2 methods and whether the numbers were verified.
- Lenders and investors. Financial institutions calculate their own financed emissions from the inventories of the companies they lend to and invest in.
Scopes, source types and the formula
| Axis | Category | Meaning | Examples |
|---|---|---|---|
| Scope | Scope 1 (direct) | Emissions from sources the company owns or controls | Boiler fuel, company vehicles, process reactions, refrigerant leaks |
| Scope | Scope 2 (energy indirect) | Emissions from generating purchased electricity, heat, or steam | Grid electricity, purchased steam |
| Scope | Scope 3 (other indirect) | Value-chain emissions outside the boundary, in 15 categories | Raw materials, logistics, business travel, use of sold products |
| Source type | Within Scope 1 | What activity caused the emission | Stationary combustion, mobile combustion, process, fugitive |
The core formula is one line: emissions = activity data × emission factor × global warming potential (GWP). Activity data is the quantity of the activity (liters of fuel, kWh of electricity). The emission factor converts that quantity into greenhouse gas. The GWP converts each gas into its CO₂ equivalent. Because different programs prescribe different GWP sets, state the source of your GWPs in every report.
Seven steps to build an inventory
- Set the purpose and standard. List the uses (disclosure, customer requests, targets) and choose the standard, reporting period and GWP set.
- Set boundaries. Define the organizational and operational boundary. For disclosure, start from the consolidation scope of the financial statements.
- List emission sources. For each site, list facilities and activities, tagging each line with its scope and source type.
- Design data collection. For each source, define where data comes from (bills, meters, purchase records), who owns it, how often it is collected and what evidence is kept.
- Calculate. Choose factors and calculation tiers, and calculate Scope 2 both location-based and market-based.
- Check quality and set a base year. Look for errors, gaps and unit mistakes, and set the base year and recalculation policy.
- Document and report. Report boundaries, period, totals by scope and gas, both Scope 2 figures, base year and recalculations, methods, factor sources, GWPs, assumptions and exclusions with reasons. Report carbon credits separately rather than subtracting them.
Dual Scope 2 reporting and the base year
| Location-based | Market-based | |
|---|---|---|
| Emission factor | Average factor of the local grid | Factors from the company’s contracts and certificates (PPAs, energy attribute certificates); a residual mix for the rest |
| Question answered | What load did our consumption place on the grid? | How did we choose to buy our electricity? |
| Effect of renewable purchases | Generally none | Lowers the figure |
The GHG Protocol Scope 2 Guidance requires both figures where contractual instruments are available. IFRS S2 requires location-based Scope 2 plus information on contractual instruments, while ESRS E1 asks for both.
The base year is the starting point for every comparison. The GHG Protocol requires the base year to be recalculated after significant structural changes (acquisitions, divestments, outsourcing), changes in methods or factors, or the discovery of significant errors.
How companies respond
- When the inventory has several uses, build it to the widest scope. You can narrow a broad inventory, but not the reverse.
- Refrigerant equipment, emergency generators and company vehicles are the sources most often missed.
- Collect activity data monthly or quarterly rather than once a year, so reporting and verification deadlines are manageable.
- With many sites and contributors, move from spreadsheets to a system that records entry, calculation and approval history.
Aentscope gathers activity data from every entity through one workflow, detects outliers and keeps evidence and change history ready for verification.
Related regulations and standards
| Type | Name | Relevance |
|---|---|---|
| International standard | GHG Protocol Corporate Standard | Scopes and reporting rules for company inventories |
| International standard | GHG Protocol Scope 2 Guidance | Dual Scope 2 reporting |
| International standard | ISO 14064-1 | Verifiable requirements for organizational inventories |
| Guidelines | 2006 IPCC Guidelines for National Greenhouse Gas Inventories | Source of calculation methods |