The GHG Protocol is updating its Corporate Value Chain (Scope 3) Accounting and Reporting Standard, first published in 2011. The proposed revisions represent the most significant overhaul of Scope 3 reporting rules in over a decade, and for organisations already navigating mandatory climate disclosure under ISSB or ASRS frameworks, the implications are material.
This is not a future-state concern. Understanding what is changing, and why it matters for your reporting obligations, is relevant now.
The GHG Protocol provides the accounting and reporting standards that underpin how organisations measure and disclose their greenhouse gas emissions. Its corporate standards are the most widely used emissions accounting framework globally.
For mandatory reporters, the connection is direct. IFRS S2, the ISSB's climate disclosure standard, is the only major sustainability reporting standard that explicitly mandates the use of the GHG Protocol for emissions measurement. AASB S2, Australia's equivalent standard under ASRS, is substantively aligned with IFRS S2 and carries the same requirement.
This means that when the GHG Protocol updates its Scope 3 standard, ISSB and ASRS reporters do not have the option to ignore it. Any changes to methodology, coverage thresholds, or category definitions will flow directly through to what conformant disclosure requires.
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The GHG Protocol's Technical Working Group has outlined several significant proposed changes to the Scope 3 standard. These are in development and subject to public consultation, but they represent the direction of travel.
The most consequential proposed change is a new quantified coverage requirement. Under the current standard, companies must disclose and justify any Scope 3 category exclusions, but there is no defined minimum. The proposed revision would require organisations to report at least 95% of their total required Scope 3 emissions in order to be in conformance with the standard.
This is a meaningful shift. It moves Scope 3 reporting from a principles-based approach to a threshold-based one, with up to 5% of minor sources permitted to be excluded but no more. For organisations that have historically been selective about which categories they measure and report, this will require a more comprehensive approach.
A proposed additional category, Category 16, would capture value chain activities including facilitated emissions and licensing arrangements where companies generate income without directly owning or selling the underlying activity. Most Category 16 reporting would be optional, but its introduction signals an intention to broaden the scope of what is captured in corporate value chain accounting.
The updated standard would clarify that investment-related emissions reporting under Category 15 applies to all companies, not only investment managers. Insurance and underwriting activities, currently included in Category 15, would shift to optional Category 16 status, while financed emissions would remain within Category 15. For financial services organisations, this reclassification has direct practical implications for how they structure their Scope 3 inventories.
Organisations would be required to disaggregate their Scope 3 emissions by data tier for each category, making transparent the difference between primary data, supplier-specific data, and spend-based or activity-based estimates. This improves comparability across disclosures and raises the bar on data quality transparency.
For Australian organisations reporting under AASB S2 as part of mandatory ASRS obligations, these proposed changes are relevant on two levels.
First, the methodological changes will affect how Scope 3 emissions are calculated and categorised. The 95% coverage threshold in particular raises the bar for what a compliant inventory looks like. Organisations that have taken a narrower view of their material Scope 3 categories will need to reassess.
Second, the data quality disaggregation requirement will increase the visibility of methodological choices. Disclosures that rely heavily on spend-based estimates will look different alongside those using supplier-specific or primary data. This creates both a transparency incentive and, in time, a competitive dynamic for organisations to improve their data quality.
The timeline matters here. The GHG Protocol expects to complete the update process by 2027, with new standards anticipated to take effect from 2028 or later. Group 1 entities are already reporting under ASRS. Group 2 and Group 3 entities preparing their approaches now have time to build toward the updated standard rather than having to retrofit later.
The United Kingdom published its UK Sustainability Reporting Standards (UK SRS) in February 2026, substantively aligned with IFRS S2. The UK SRS S2 standard is expected to inform mandatory reporting obligations for listed companies and large non-listed entities, with the FCA consulting on the implementation framework.
Under the UK's current approach, Scope 1 and Scope 2 emissions carry minimum reporting requirements, while Scope 3 is required where material. As the GHG Protocol's Scope 3 standard tightens, the methodological foundation underpinning those Scope 3 disclosures will shift, affecting how UK entities assess materiality, structure their inventories, and present data quality information.
For UK-listed businesses and multinationals reporting across both Australian and UK frameworks, staying across the GHG Protocol's development process is not a specialist concern. It is core to understanding the disclosure landscape they are operating in.
The GHG Protocol's Scope 3 revisions are not yet finalised. Public consultation is a step ahead. But the direction of travel is clear, and organisations that use the preparation window well will be better positioned when the updated standard takes effect.
A few practical considerations for ASRS and ISSB reporters:
Audit your current Scope 3 coverage. Understand which categories you are currently measuring and reporting, and which you are excluding. If your current inventory would fall short of a 95% threshold, identify the gap now.
Assess your data quality by category. Know where your Scope 3 data comes from. Spend-based estimates may be appropriate for certain categories, but understanding where you are relying on them prepares you for the disaggregation requirement ahead.
Consider Category 15 if you are in financial services. The proposed reclassification of insurance activities and the clarification that Category 15 applies to all companies, not just investment managers, may affect how you have historically structured your inventory.
Build toward the updated standard, not just the current one. For Group 2 and Group 3 entities currently in preparation, designing your Scope 3 approach to be compatible with the 2028 requirements is more efficient than building to the 2011 standard and retrofitting later.
If you would like to understand how these changes apply to your organisation's reporting position, our team is glad to work through it with you.
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Trace is a climate reporting platform specialising in ISSB and AASB standards, helping businesses navigate mandatory climate disclosure with clarity and confidence.
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