Greenhouse Gas Protocol guide

Choosing the right organisational and operational boundary.

Published on
February 21, 2022

All organisations when measuring emissions under the GHGP have a choice of whether to set their organisational boundary from an equity-share or control perspective.

For the vast majority of SMEs, the measurement will be the same regardless of the choice. For larger organisations with complex group structures across subsidiaries, joint ventures and minority interests - what you should include and exclude in your calculations is more complex and a choice has implications.


Here, an organisation takes proportional responsibility for anything they own.

This is done by calculating every relevant entity's emissions, and then accounting for this by multiplying it by the % ownership that you have in that entity. For example, any 100% subsidiaries would have 100% of their emissions included. 50/50 Joint Ventures would measure their emissions, and account for 50%. A 5% minority interest holding, would account for just 5% of that entity’s emissions.

Control perspective

Here, an organisation will measure and include the emissions of any entity that it has control over. It will not include any emissions from an entity in which it owns a part, but does not control.

The guidance has a subtle additional choice - you may choose to draw the line where you have financial control, or operational control, but this is normally only applicable in shipping and oil & gas sectors, with complex asset leasing structures.

For most organisations, it is simple. In the minority interest holding we mention above of 5%, whereas with the equity-share approach they include 5% of the emissions in their accounts, under the control approach, as they do not control the entity, they include 0%.

Operational boundary

Once an organisation has set their operational boundary, they must choose what to measure.

One of the core principles of the GHGP is completeness, and they expect you to measure everything. They also do not agree with using a materiality threshold (e.g. a point at which a discrepancy becomes material); to know whether something is material or not you must measure it, and if you have measured it, by completeness, it must be included in your carbon accounts.

In this regard, the GHGP requires all organisations to measure the entirety of their scope 1 and 2 emissions, and to make their best effort at scope 3.

The GHGP understands the task of collecting the data for measurement for scope 3 is extremely difficult and is therefore lenient, allowing organisations to set an ‘operational boundary’ of their choosing, and to report and disclose emissions they measure.

However, this is fast changing, and Consequence does not expect organisations to have a choice of their operational boundary within years.

For example, any Science Based Target with SBTI requires full measurement of scope 3.


The GHGP cares far more about you applying your choice consistently across your entire organisation, than it does about the particular choice. Consistency is a core principle of the GHGP.

How Consequence helps

For most small and medium sized organisations, boundaries are largely irrelevant. For larger groups, Consequence allows you to choose the boundary approach you wish - and can help you choose which is most appropriate.

Sources for reference.

  • Source The Greenhouse Gas Protocol, 2015
  • Source Target Validation Protocol for Near-Term Targets, 2021
  • Source Value Change in the Value Chain: BEST PRACTICES IN SCOPE 3 GREENHOUSE GAS MANAGEMENT, 2018

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