The GHG Protocol Scope 3 Updates: Preparing for the proposed changes

In March 2026, the GHG Protocol published a progress update on its plans to revise the Corporate Value Chain (Scope 3) Accounting and Reporting Standard. It is the first time the standard has been meaningfully updated since its original publication in 2011.

The document is a working draft, not a final standard. Every proposal it contains is subject to change, and a full public consultation is still to come. But the revision process is well advanced - a 65-member Technical Working Group, drawing on expertise from more than 20 countries, has been meeting since September 2024 and has held 42 sessions to date. And therefore the direction of travel is clear.

Because the Scope 3 Standard sits underneath most of the reporting frameworks businesses are working to - SBTi, CDP, B Corp, and others all reference it - changes here will eventually ripple through to how carbon reporting is assessed, compared, and verified across the board.

This piece works through the key proposals, in plain English, based on the official Phase 1 Progress Update.

What the revision covers

The Phase 1 proposals fall into three groups:

Series A covers data quality: how emissions data is classified, reported, and improved over time.

Series B covers boundary setting: what must be included in a Scope 3 inventory, how exclusions are handled, and a new emissions category.

Series C covers Category 15 (investments and financed emissions): including which companies it applies to and how calculations are performed.

The key proposed changes to Scope 3 emissions measurement

Change 1: Companies must show how each Scope 3 category was calculated

Currently, companies report a total figure per Scope 3 category with a written description of the data sources and methods used. There is no requirement to show, in the numbers themselves, how much of a category is based on specific activity data versus spend-based estimates. Under the proposal, each category would need to be broken down by the type of data used to calculate it. The classification system is still being finalised, but both options under consideration distinguish broadly between specific activity data, spend-based or economic proxy estimates, and an unclassified bucket for companies unable to split their figures. The GHG Protocol has also proposed mirroring this disaggregation requirement for Scope 1, with a similar application to Scope 2 to be developed in a later step.

What this means in practice

Under the proposed rules, how much of each Scope 3 category is built on spend-based estimates rather than activity data would be visible in the reported figures - not buried in a methodology note. That means the data quality behind a company's Scope 3 numbers becomes directly visible to clients, investors, procurement teams, and the frameworks that use Scope 3 data to assess companies.

Change 2: Clearer standards for data quality, emission factors, and verification

The current standard recommends improving data quality over time but sets no specific thresholds and does not require disclosure of whether an inventory has been independently verified. Three related changes are proposed.

Companies that have their Scope 3 inventory independently verified would be required to say so using one of three labels: ‘Verified’, ‘Partially verified’, or ‘Not verified’. The obligation applies only to companies that carry out verification - those that do not are not required to say so.

On emission factors, the proposal recommends using factors with a completeness rate of at least 95%, meaning no more than 5% of the emissions covered by that factor should have been left out of its calculation. Regional emission factors would also be expected to account for the cross-border movement of goods, energy, and services.

Finally, companies are recommended, though not required, to set measurable data quality improvement targets and track progress year-on-year, using metrics such as the proportion of Scope 3 derived from activity data and the proportion of supply chain partners providing it.

What this means in practice

The verification disclosure creates a new visible signal. If a company has had its inventory independently checked, that will be clearly stated in its disclosures. Companies that do not verify are not required to disclose that fact, so the absence of a label does not necessarily indicate that verification has not taken place.

The emission factor guidance raises the bar on what counts as acceptable practice. Many emission factor databases apply cut-offs, leaving some emissions out of scope to simplify the calculation - the proposal pushes towards factors where those gaps are minimal. These are recommendations rather than hard requirements, but they set a clearer direction for best practice than the current guidance does.

Change 3: Using a supplier's total company emissions to estimate what you bought from them will only be acceptable in limited cases

Currently, companies can take a supplier's total company-wide emissions and use that figure to estimate the carbon associated with the specific goods or services they purchase. The current guidance discourages this where a supplier's operations are very diverse, but does not prohibit it. Under the proposal, this approach would only be permitted where a supplier's operations are sufficiently uniform that a company-wide average genuinely represents what is being bought. For suppliers running very different business lines with very different emissions profiles, it would no longer be acceptable. Companies would need to work towards more specific data - product-level figures where possible, and activity, production line, or facility-level data where those are not available.

What this means in practice

This has direct implications for many Category 1 (Purchased goods and services) footprints built on company-wide supplier figures, which is a common approach when buying from large or diverse suppliers.

The key question is whether the suppliers you currently use company-wide data for would hold up under this proposal. A specialist manufacturer with a narrow product range probably would. A large business operating across manufacturing, logistics, and professional services probably would not. For those that would not, the practical work is identifying what more specific data exists, and whether those suppliers can be engaged to provide it.

Change 4: A minimum coverage requirement of 95%, with a carve-out for genuinely negligible sources

The current standard requires companies to justify any exclusions but sets no minimum for how much must actually be included. The proposal introduces a hard floor: at least 95% of required Scope 3 emissions must be included. Up to 5% may be left out, but exclusions must be calculated, disclosed, and justified - a written description alone is not sufficient. To prove exclusions stay within that limit, companies would need to calculate 100% of their required Scope 3 annually, including portions they intend to leave out. A high-level screening exercise is explicitly endorsed as an acceptable method for this, so the same level of detail is not expected for minor sources as for major ones.

A carve-out is proposed for genuinely negligible sources - things clearly too small to move the needle, where requiring a full calculation would be disproportionate. The document uses paper clips and staples as the example - these still count toward the 5% allowance. One exception sits outside the cap entirely: downstream emissions from intermediate products in Categories 9 to 12, where the final use of the product is genuinely unknown, may continue to be excluded provided the exclusion is disclosed and justified. The 5% threshold is consistent with how SBTi and CDP already handle Scope 3 coverage.

What this means in practice

The significant shift here is the move from written justification to calculated justification. Many companies have excluded Scope 3 categories by describing them as not significant, without ever running the numbers. Under the proposed revision, that would not be acceptable. You would need to calculate the figure, even at a high level, before leaving it out.

For businesses already thorough about their Scope 3 boundary, this change is unlikely to require much additional work. For those that have excluded categories on assumed insignificance, working out whether those exclusions hold up is now worth doing.

Change 5: Required and optional Scope 3 must be reported as separate figures, and a new category is introduced

The standard distinguishes between emissions that must be included and those that are optional, but many companies currently combine both in their reported totals without clearly labelling which is which. Under the proposal, required and optional Scope 3 emissions would need to be reported as separate, clearly labelled figures. This matters because the 95% minimum only applies to required emissions - without the separation, it would be impossible to assess whether the threshold had been met.

A new Category 16 is also proposed for facilitated activities: emissions from third-party activities that a company enables or profits from but does not own or control - for example, licensing products or technology where the licensee's use generates emissions. For most businesses, Category 16 would be optional. The exception is activities related to distributing fuel and energy, which would be required for oil and gas distributors.

What this means in practice

For most businesses, the required/optional split is primarily a reporting change - ensuring figures are clearly separated rather than combined. It also prompts a clearer stocktake of exactly what has and has not been included in the inventory.

Category 16 is unlikely to be relevant to most businesses in the near term. It is optional for most companies and targeted primarily at those whose business model involves enabling third-party activities. If your business licenses products, processes, or intellectual property, it is worth being aware of.

Change 6: Category 15 (investments) applies to all companies, with a broader scope and updated calculations

Category 15 covers emissions associated with investments, often called financed emissions, and has in practice been treated as relevant mainly to financial institutions. The current standard requires companies to include the Scope 1 and Scope 2 emissions of businesses they invest in. The proposed revision makes the applicability explicit: any company with investments is in scope, not just financial institutions. Businesses with equity stakes, corporate bonds, or project finance would need to account for them.

The boundary also expands: required Scope 3 emissions of investees would need to be included alongside Scope 1 and 2 - a significant widening. Companies would also need to disclose what proportion of their investment portfolio, by value, has been captured in their financed emissions calculations. The calculation method is updated to include both equity and debt in the denominator, bringing it into line with how PCAF (the Partnership for Carbon Accounting Financials) already handles this.

On exclusions, the 5% allowance applies to Category 15 in the same way it applies to the rest of required Scope 3. A specific carve-out is also proposed for investment types where no established calculation method yet exists or where the necessary data is not reasonably available, acknowledging that methodology for some financial instruments is still developing.

What this means in practice

For businesses outside financial services, how much this matters depends on the scale and nature of their investment portfolio. A company with a small number of stakes in similar businesses may find the change manageable. One with a broad portfolio across carbon-intensive sectors faces a more material expansion.

The inclusion of investee Scope 3 is the most substantive change here. In sectors like manufacturing, energy, or logistics, a business's Scope 3 emissions can dwarf its Scope 1 and 2 combined - so for investors in those sectors, this is not a minor adjustment.

What the timeline looks like

The Phase 1 Progress Update is a working draft. The Independent Standards Board has approved its publication for transparency purposes, but has not approved it as a final standard. A complete draft for public consultation will follow, and the formal revision process, including ISB review and Steering Committee ratification, comes after that.

Phase 2 of the revision is already running in parallel, covering category-specific boundary updates and how circularity and recycled materials are handled.

In September 2025, GHG Protocol and ISO announced a partnership to co-develop harmonised international standards for corporate GHG accounting. ISO members are joining the existing Technical Working Groups to support the ongoing revisions, with the goal of producing a harmonised set of standards for corporate GHG accounting and reporting.

Three questions worth asking now, to help prepare

Nothing in the Phase 1 Progress Update requires immediate action. The standard has not changed, and no framework has yet made these proposals binding. But the proposed changes are substantial, and businesses with existing Scope 3 programmes would benefit from understanding where they stand before the changes land.

What proportion of your Scope 3 inventory is currently spend-based? The data-type separation proposal will eventually make this public, per category. Knowing the answer now means you can prioritise where to improve data quality, rather than discovering the answer at the point of disclosure.

Which Scope 3 categories do you currently exclude, and have you actually quantified them? The proposed 95% floor requires data to justify exclusions - a written description will not be sufficient. If you have excluded categories without running the numbers, that is worth addressing.

Where does your Category 1 data come from? If you are using corporate-level emissions data from suppliers with diverse operations, the proposed allocation restriction would require moving to more granular data. Mapping your supplier data now gives you time to address gaps before they become compliance issues.

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The proposed revisions consistently push in one direction: more rigour, more transparency, and less room for imprecise data to hide inside a reported total. Businesses that understand their Scope 3 programme well, including what is in it, how it was calculated, and where the gaps are, will be better placed when the final standard arrives.

Where many carbon tools start and stop with spend-based estimates, Seedling is built to go further. Our combination of software and 1:1 support, helps businesses collect the activity data behind their emissions: from supplier-specific figures and accounting integrations, to employee surveys that capture commuting and home working. That means your footprint reflects what is actually happening in your business, not just what you spend - which is exactly what the proposed standard changes will reward.

If you want to understand how your current Scope 3 programme measures up against where the standard is heading, or want to get started with carbon measurement, our team are on hand to answer any questions.