The GHG protocol debate: who gets left behind in the push for precision?

The Greenhouse Gas Protocol, the world’s most influential emissions-accounting standard, is under revision, and what happens next could reshape how companies report, act, and define progress.

At Re-Source 2025, one of the most talked-about side sessions, “Evolving ESG Strategies: What You Need to Know About the Greenhouse Gas Protocol and SBTi,” unpacked what these changes could mean in practice. It wasn’t a polished, everyone-agrees-with-everyone panel. It was tense, opinionated, and refreshingly honest.

The revision

The GHG Protocol is undergoing its biggest update in more than a decade and the proposed changes could redefine what counts as credible decarbonisation and who gets to claim it.

Depending on who you ask, the revisions are either a long-overdue clean-up to restore legitimacy to carbon reporting, or a bureaucratic overcorrection that risks making participation nearly impossible for most companies.

The market-based method under scrutiny

One of the first topics to ignite debate was the market-based method itself. It’s a common misconception, one we didn’t expect to see resurface, but it remains the first point of concern for many.

The criticism goes that buying unbundled Energy Attribute Certificates (EACs) is just a paper exercise, a convenient way to make green claims without real impact. But that view misses the bigger picture. The market-based method is what unlocked private capital for renewable generation in the first place by allowing companies to purchase certificates representing renewable electricity attributes. It created a transparent, verifiable mechanism to stimulate demand, and with it, investment.

Since its introduction, this approach has channelled billions into renewable projects worldwide, with entire markets having been built on its foundation. It isn’t without flaws, but it’s effective and it has played a decisive role in shifting corporate behaviour towards clean energy.

For a deeper look at why the market-based method isn’t greenwashing and why it remains one of the strongest tools for scaling renewable demand, read our breakdown here.

From “Good Enough” to “Granular”

The session quickly turned to what many saw as the next big pivot, and why most of us were in the room in the first place: granularity.

The proposed update would require renewable electricity reported under the market-based method to be hourly matched with consumption and sourced from within the same grid region or bidding zone.

In theory, more precise data should make reporting more credible. In reality, very few organisations can reach that level of detail. Even major corporates with vast energy portfolios find that aligning consumption and generation hour by hour is technically demanding and not necessarily more impactful.

Meta shared their 2023 study with the room, which illustrates this point. Under the standard annual method, Meta’s reported electricity emissions were near zero, supported by more than 15 GW of long-term clean-energy contracts covering its entire annual use. When reassessed hourly, Meta achieved a 79 % Carbon-Free Energy (CFE) score, which they highlighted was impressive on paper, but far less meaningful once grid congestion, transmission losses, and regional variations were considered.

The analysis further showed how hourly matching can distort priorities. It’s easier to achieve precise hourly matches in places like California, where renewables dominate and data are plentiful, than in regions that still rely on fossil fuels; the ones that actually need investment most.

A question of fairness

Granular data is appealing if you’re a global tech company with the infrastructure to analyse it. But what about everyone else?

Across Europe, 99.8 % of companies are small or medium-sized enterprises. These are the manufacturers, logistics operators, and service providers forming the economic backbone of the continent. Most lack access to hourly consumption data or the capacity to source certificates within defined market zones.

If the new Protocol demands such precision, it risks excluding the majority of businesses that are genuinely trying to decarbonise, exposing a deeper structural problem. Several speakers warned that the discussion is increasingly shaped by those with the resources to meet ever-stricter criteria, and others stressed that if the system only serves the biggest players, it fails its purpose entirely.

The overwhelming majority seemed to nod in agreement with claims that this isn’t about perfection; it’s about practicality. Decarbonisation must happen in numbers, and although large corporates should lead with precision and transparency, smaller ones must be supported and encouraged to act as well, not deterred.

Boundaries that bind

Another contentious proposal is the tightening of market boundaries, redefining the regions within which EACs can be sourced and counted toward a company’s inventory.

In Europe, these boundaries are expected to align with ENTSO-E bidding zones, which, in countries like Italy, could create several (up to five) separate market areas. While this might improve data consistency, it could also restrict flexibility for certificate buyers.

With fewer eligible options, companies will have less room to manoeuvre and likely less impact overall. A certificate from a region with a dirtier grid can deliver a far greater emissions benefit than one from a cleaner system, yet under the new structure the former might no longer qualify.

For organisations operating across multiple regions or bidding zones, the implications go beyond impact. Managing separate accounting and sourcing requirements would bring new layers of administrative cost unrelated to renewable energy itself; costs that could discourage participation and push companies to focus only on their largest sites, leaving smaller operations behind.

It’s a case of accounting accuracy overshadowing climate logic: a trade-off worth questioning.

Quality or Scale?

Underlying it all is a simple but uncomfortable dilemma. Should the GHG Protocol prioritise perfect accuracy or broad participation?

Some argued that companies should only report if they can supply fully granular data. Others countered, more pragmatically, that waiting for perfect datasets is just another way to delay progress.

What often gets lost in these debates is that the existing Protocol already works. It has helped drive hundreds of terawatt-hours of renewable procurement and guided billions in investment. Through the market-based method, companies of all sizes have found a credible way to support renewable generation and track progress transparently. Without it, we would likely be years behind where we are today.

So, where do we stand?

At Nvalue, our position is clear. We support the market-based method, not because it’s perfect, but because it’s pragmatic. It enables participation across industries, countries, and company sizes. It creates incentives for renewable investment, not just reporting.

We are not in favour of increased granularity, not because we oppose better data, but because we oppose turning “better data” into a luxury.

The revised GHG Protocol must remain inclusive, practical, and focused on outcomes rather than optics. If it ends up serving only those who can afford hourly-matching algorithms, it will have missed its purpose entirely.

As one participant noted, if you build the perfect system that no one can use, what exactly have you achieved?

The bigger picture

Standards like the GHG Protocol are not natural laws; they’re voluntary frameworks. Their power lies in adoption, not enforcement. They shape corporate behaviour, steer investment, and, crucially, define what “counts” as progress. If we make them so complex or costly that companies choose not to participate, we risk losing the very momentum that has made them effective in the first place.

Over the past decade, that imperfect definition has driven one of the largest voluntary movements in clean energy history. Companies bought certificates, reshaped procurement strategies, and directed capital toward renewables on an unprecedented scale.

So yes, the system could use refinement, but we should be careful not to perfect it out of existence.

Our hope for the revision

As the consultation continues, our hope is straightforward: listen to the many, not just the loud. It’s easy to design a standard that works for the world’s richest corporations. It’s harder, and far more important, to build one that empowers everyone else.

The GHG Protocol has never been about perfection. It’s been about progress. We vote to keep it that way. Nvalue will track the progress and keep you informed.