GHG Protocol Corporate Standard: SECR Methodology Guide
The Streamlined Energy and Carbon Reporting (SECR) framework doesn't exist in isolation. At its foundation lies the GHG Protocol Corporate Standard, the world's most widely used greenhouse gas accounting framework. For UK businesses navigating SECR compliance, understanding this methodology is essential for accurate, defensible carbon reporting.
Whether you're a sustainability professional implementing your first carbon accounting system or an environmental consultant advising multiple clients, this guide breaks down the GHG Protocol Corporate Standard and its application to UK SECR requirements.
What is the GHG Protocol Corporate Standard?
The GHG Protocol Corporate Accounting and Reporting Standard, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), provides internationally recognised frameworks for measuring and managing greenhouse gas emissions.
First published in 2001 and revised in 2004, the Corporate Standard has become the de facto global standard for corporate GHG accounting. Over 90% of Fortune 500 companies responding to the CDP (formerly Carbon Disclosure Project) use the GHG Protocol.
Why SECR References the GHG Protocol
When the UK government introduced SECR in 2019 through The Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, it explicitly required companies to follow "a methodology for which the company reasonably believes results in a fair representation of the company's emissions."
While not legally mandated to use the GHG Protocol specifically, UK government guidance and Defra's environmental reporting guidelines clearly point to it as the recommended framework. This alignment ensures UK businesses report emissions in a manner consistent with international best practice.
The Five Principles of GHG Accounting
The GHG Protocol Corporate Standard is built on five fundamental principles that govern all aspects of greenhouse gas accounting:
1. Relevance
Ensure the GHG inventory appropriately reflects the emissions of the company and serves the decision-making needs of users. For SECR purposes, this means including all emissions sources that fall within your UK energy consumption boundary.
SECR Application: Your report must include energy consumption from all activities for which you're responsible in the UK, including electricity, gas, and transport fuels used by company vehicles.
2. Completeness
Account for and report on all GHG emission sources within the chosen inventory boundary. Disclose and justify any specific exclusions.
SECR Application: You cannot cherry-pick low-emission sites or periods. If you operate ten UK facilities, your SECR report must encompass energy use across all ten.
3. Consistency
Use consistent methodologies to allow meaningful comparisons over time. Document any changes to data, boundaries, methods, or other factors affecting emissions.
SECR Application: When comparing year-on-year performance (a key SECR requirement), you must use consistent boundaries and calculation methodologies. If you change your approach, you must restate previous years.
4. Transparency
Address relevant issues in a factual and coherent manner. Document assumptions and reference the calculation methodologies and data sources used.
SECR Application: Your directors' report should clearly state your organizational boundary approach, emission factors used (typically UK Government GHG conversion factors), and any estimation techniques applied.
5. Accuracy
Ensure quantification is systematically neither over nor under actual emissions, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable confidence.
SECR Application: Use actual meter readings where possible rather than estimates. When estimation is necessary, document your methodology and ensure it's based on reasonable assumptions.
Organizational Boundaries: Defining What to Report
One of the most critical decisions in GHG accounting is defining your organizational boundary—which operations and entities to include in your inventory.
Control Approaches
The GHG Protocol offers two control approaches for consolidating emissions:
Equity Share Approach
Under this approach, you account for GHG emissions according to your share of equity in the operation. If you own 40% of a facility, you report 40% of its emissions.
When to use: Less common for SECR, but relevant for joint ventures or partially-owned subsidiaries where you want to align GHG reporting with financial reporting principles.
Control Approach (Financial or Operational)
You account for 100% of emissions from operations over which you have control, and zero emissions from operations where you don't have control.
Financial Control: You have the ability to direct the financial and operating policies of an operation with a view to gaining economic benefits.
Operational Control: You or one of your subsidiaries has full authority to introduce and implement operating policies at the operation.
SECR Standard Practice: Most UK companies use the financial control approach for SECR, as it aligns with financial reporting boundaries used in the directors' report. If you consolidate a subsidiary's financial accounts, you typically include its UK energy consumption in your SECR report.
Group Company Considerations
For corporate groups, the organizational boundary decision significantly impacts your reporting obligations:
- Parent companies must consolidate emissions from all financially controlled subsidiaries operating in the UK
- Subsidiary companies that meet SECR thresholds independently may have separate reporting obligations
- Joint ventures should be assessed based on your chosen control approach
For detailed guidance on group structures, see our article on SECR for Group Companies.
Operational Boundaries: The Three Scopes
Once you've defined which entities to report on, the operational boundary determines which emissions from those entities to include. The GHG Protocol categorizes emissions into three "scopes."
Scope 1: Direct Emissions
Scope 1 covers direct GHG emissions from sources that are owned or controlled by your company.
Common SECR Examples:
- Stationary combustion: Natural gas used in office heating, oil burned in boilers
- Mobile combustion: Petrol and diesel used by company-owned or leased vehicles
- Process emissions: Manufacturing processes that directly emit GHGs (e.g., cement production)
- Fugitive emissions: Refrigerant leakage from air conditioning systems
Calculation Example:
Natural gas consumption: 150,000 kWh
UK Government conversion factor (2025): 0.18316 kg CO2e per kWh
Scope 1 emissions = 150,000 × 0.18316 = 27,474 kg CO2e (27.5 tonnes)
Scope 2: Indirect Energy Emissions
Scope 2 accounts for emissions from the generation of purchased electricity, heat, steam, or cooling consumed by your company.
SECR Focus: Primarily purchased electricity for UK businesses.
Two Reporting Methods:
- Location-based method: Uses average emission factors for the local grid (mandatory for SECR)
- Market-based method: Reflects emissions from contractual instruments like renewable energy contracts (optional additional disclosure)
Calculation Example:
Purchased electricity: 500,000 kWh
UK Government location-based factor (2025): 0.21233 kg CO2e per kWh
Scope 2 emissions = 500,000 × 0.21233 = 106,165 kg CO2e (106.2 tonnes)
SECR Requirement: You must use the UK Government's published conversion factors, updated annually. Using outdated factors can result in inaccurate reporting.
Scope 3: Other Indirect Emissions
Scope 3 encompasses all other indirect emissions that occur in your value chain, both upstream and downstream.
The 15 Scope 3 Categories:
Upstream:
- Purchased goods and services
- Capital goods
- Fuel and energy-related activities (not in Scope 1 or 2)
- Upstream transportation and distribution
- Waste generated in operations
- Business travel
- Employee commuting
- Upstream leased assets
Downstream: 9. Downstream transportation and distribution 10. Processing of sold products 11. Use of sold products 12. End-of-life treatment of sold products 13. Downstream leased assets 14. Franchises 15. Investments
SECR Position on Scope 3: Currently not required for SECR compliance. UK regulations only mandate reporting of Scope 1 and Scope 2 emissions.
However, leading companies increasingly measure Scope 3 as:
- These emissions often dwarf direct emissions (10x or more)
- Stakeholders and investors expect comprehensive climate disclosure
- Future regulations may mandate Scope 3 reporting
GHG Emissions Calculation Methodology
The GHG Protocol provides three primary calculation approaches, listed in order of accuracy:
1. Direct Measurement (Continuous Emission Monitoring)
Installing equipment that directly measures GHG emissions from a source.
Accuracy: Highest Cost: Highest SECR Relevance: Rare for most UK businesses; typically limited to large industrial facilities
2. Mass Balance Approach
Based on the principle that the quantity of GHG emissions from a process equals the carbon content of inputs minus the carbon content of outputs.
Example: A combustion process where you measure carbon in fuel input and carbon in ash output to determine carbon emitted as CO2.
SECR Relevance: More common in manufacturing and processing industries
3. Calculation from Activity Data
The standard approach for most SECR reporting, using the formula:
Activity Data × Emission Factor = GHG Emissions
- Activity Data: Quantity of fuel or energy consumed (kWh, litres, tonnes)
- Emission Factor: Rate of emissions per unit of activity (kg CO2e per kWh, litre, etc.)
SECR Standard Practice:
Annual electricity consumption (from bills): 450,000 kWh
UK Government emission factor: 0.21233 kg CO2e/kWh
Total emissions = 450,000 × 0.21233 = 95,549 kg CO2e (95.5 tonnes CO2e)
UK Government Conversion Factors
For SECR compliance, you must use the UK Government's GHG Conversion Factors for Company Reporting, published annually by DEFRA.
These factors cover:
- Electricity (by country: England, Scotland, Wales, Northern Ireland)
- Natural gas and other fuels
- Transport fuels by vehicle type
- Refrigerants and other gases
Critical Update Requirement: Factors change annually as the UK grid decarbonizes. A business using 2022 factors for a 2025 report would overstate electricity emissions by approximately 15%.
Data Quality and Estimation Techniques
Perfect data is rare in GHG accounting. The GHG Protocol acknowledges this and provides guidance on estimation when actual data is unavailable.
Data Quality Considerations
High-quality GHG data is:
- Complete: Covers all sources within your boundary
- Accurate: Free from material errors
- Consistent: Comparable across reporting periods
- Timely: Available when needed for reporting deadlines
- Transparent: Assumptions and methods are documented
When Estimation is Necessary
Common scenarios requiring estimation:
- Missing utility bills for specific periods
- Incomplete vehicle mileage records
- Estimated meter readings from suppliers
- Newly acquired sites with partial-year data
GHG Protocol Estimation Approaches
1. Extrapolation from Known Data
Use data from similar time periods or facilities to estimate missing data.
Example: If you have 10 months of gas consumption data, you might average the known months and multiply by 12.
2. Use of Proxy Data
Apply data from similar operations, facilities, or companies.
Example: If a small satellite office lacks separate metering, you might estimate its electricity use based on per-square-meter consumption at similar offices.
3. Industry Averages
Use published benchmarks for your sector.
Example: Office electricity consumption typically ranges from 100-200 kWh per square meter annually in the UK.
SECR Best Practice: Document all estimation methodologies in your supporting records. Your directors' report should note if significant estimates were used.
Common GHG Protocol Pitfalls in SECR Reporting
1. Boundary Inconsistency
Problem: Including different entities year-on-year without explanation.
Solution: Define your organizational boundary once and apply it consistently. If it changes (acquisition, disposal, restructuring), clearly explain the change and consider restating previous years for comparability.
2. Double Counting
Problem: Counting the same emissions in both Scope 1 and Scope 2, or in multiple entities within a group.
Example: A parent company reports electricity consumption at a subsidiary, then the subsidiary also reports it separately.
Solution: Maintain clear records of which entity reports each emission source. For groups, establish a central register.
3. Using Incorrect Emission Factors
Problem: Using international factors, outdated factors, or factors for the wrong fuel type.
Solution: Always use the current year's UK Government conversion factors. Download the full dataset and reference the specific factor used for each calculation.
4. Missing Emission Sources
Problem: Focusing on obvious sources (electricity, gas) while overlooking others (company vehicles, refrigerants).
Solution: Conduct a thorough inventory of all potential emission sources. Review expense accounts for fuel purchases, check for company vehicles, and survey facilities for refrigeration and air conditioning equipment.
5. Inadequate Documentation
Problem: Calculating emissions without documenting data sources, assumptions, or methodologies.
Solution: Maintain a comprehensive calculation workbook showing:
- Source data (with references to bills, invoices, meter readings)
- Emission factors used (with version and source)
- Calculation steps
- Any assumptions or estimations made
Integrating GHG Protocol Methodology into SECR Compliance
Here's how the GHG Protocol principles translate into practical SECR compliance:
Step 1: Define Your Reporting Boundary
Action: Document whether you're using financial control, operational control, or equity share approach. For most UK companies, financial control aligned with financial reporting is appropriate.
Output: List of all entities and UK facilities included in your SECR report.
Step 2: Identify All Emission Sources
Action: Survey all included entities to identify:
- Fuel combustion (heating, generators)
- Electricity consumption
- Company vehicles
- Refrigerants and other fugitive emissions
Output: Complete inventory of Scope 1 and Scope 2 sources.
Step 3: Collect Activity Data
Action: Gather:
- Utility bills (electricity, gas, oil)
- Fuel purchase records
- Vehicle mileage and fuel consumption logs
- Meter readings
Output: Comprehensive activity data for your reporting year (typically aligned with your financial year).
Step 4: Apply UK Government Conversion Factors
Action: Download the current year's UK Government GHG Conversion Factors and apply the appropriate factor to each activity dataset.
Output: Calculated emissions in tonnes CO2e for each source.
Step 5: Calculate Intensity Ratio
Action: Choose an intensity metric that reflects your business (revenue, FTE, square meters, units produced) and divide total emissions by this metric.
Output: SECR-compliant intensity ratio (e.g., "12.5 tonnes CO2e per £million turnover").
For detailed guidance, see our article on SECR Intensity Metrics.
Step 6: Document Methodology
Action: Prepare supporting documentation that records:
- Organizational boundary definition
- Complete list of emission sources
- Data sources and quality
- Emission factors used
- Any estimations and assumptions
- Year-on-year comparison methodology
Output: Audit trail that supports your published SECR disclosure.
Advanced GHG Protocol Considerations
Biogenic Carbon
The GHG Protocol distinguishes between fossil carbon and biogenic carbon (from recently living organisms).
Treatment: Biogenic CO2 emissions should be reported separately from Scope 1, 2, and 3. They are not added to your total but disclosed separately.
SECR Relevance: If you burn biomass or biodiesel, the carbon portion should be reported separately. However, other emissions from biomass combustion (like CH4 and N2O) remain in Scope 1.
Emission Factor Evolution
UK grid electricity has decarbonized rapidly:
- 2015: ~0.460 kg CO2e per kWh
- 2020: ~0.233 kg CO2e per kWh
- 2025: ~0.212 kg CO2e per kWh
Implication: A company with flat electricity consumption will show decreasing Scope 2 emissions purely from grid decarbonization. When reporting year-on-year changes, note whether changes stem from reduced consumption or lower emission factors.
Greenhouse Gas Coverage
While often referred to as "carbon" reporting, SECR requires reporting all six Kyoto Protocol gases:
- Carbon dioxide (CO2)
- Methane (CH4)
- Nitrous oxide (N2O)
- Hydrofluorocarbons (HFCs)
- Perfluorocarbons (PFCs)
- Sulphur hexafluoride (SF6)
All are converted to CO2 equivalent (CO2e) using global warming potentials and reported as a single figure.
Tools and Resources for GHG Protocol Implementation
Official Resources
- GHG Protocol Corporate Standard - Free download of the full standard
- UK Government GHG Conversion Factors - Updated annually
- Defra Environmental Reporting Guidelines - UK-specific guidance
- GHG Protocol Calculation Tools - Sector-specific Excel templates
Comply Carbon's GHG Protocol Implementation
At Comply Carbon, our platform implements the GHG Protocol Corporate Standard specifically for SECR compliance:
- Automated boundary definition aligned with your financial reporting
- Pre-loaded UK Government conversion factors updated annually
- Guided data collection ensuring complete coverage of Scope 1 and 2 sources
- Built-in calculation engine applying the correct methodology
- Audit trail documentation demonstrating compliance with GHG Protocol principles
See a complete example of GHG Protocol methodology applied to SECR in our sample report.
Frequently Asked Questions
Q: Must I use the GHG Protocol for SECR compliance?
A: While not legally mandatory, UK government guidance strongly recommends it, and it's considered best practice. Using an alternative methodology requires justification that it produces a "fair representation" of emissions.
Q: Can I use market-based Scope 2 accounting if I purchase renewable electricity?
A: For SECR, you must report location-based Scope 2 emissions using UK grid average factors. You may voluntarily disclose market-based figures as supplementary information, but this doesn't replace the location-based requirement.
Q: How do I handle emissions from international operations?
A: SECR only requires reporting of UK energy consumption. If your company has international operations, you should maintain the same organizational boundary globally but only report the UK portion for SECR purposes.
Q: What if my financial year doesn't align with the UK Government conversion factor publication date?
A: Use the conversion factors that apply to your reporting period. If your financial year is April 2024-March 2025, use the factors published in June 2024 for that entire period, even though new factors are published mid-year.
Q: How precise must my calculations be?
A: SECR requires reporting to one decimal place in tonnes CO2e. While internal calculations should maintain higher precision, the published figure in your directors' report can be rounded appropriately.
Conclusion
The GHG Protocol Corporate Standard provides the robust, internationally recognized methodology that underpins effective SECR compliance. By understanding its five core principles, correctly defining organizational and operational boundaries, and systematically applying UK Government conversion factors to your activity data, you ensure your SECR report is accurate, defensible, and valuable for decision-making.
For sustainability professionals and environmental consultants, mastery of GHG Protocol methodology is essential. It's not just about regulatory compliance—it's about providing stakeholders with reliable information on your organization's climate impact and progress toward reduction targets.
Whether you're implementing your first GHG inventory or refining an established reporting process, grounding your work in GHG Protocol principles ensures your SECR reporting meets both legal requirements and stakeholder expectations.
Need help implementing GHG Protocol methodology for SECR compliance? Check if your company needs to comply or explore how Comply Carbon automates the entire process from data collection through final report generation in just 10 minutes.
This guide reflects GHG Protocol Corporate Standard methodology as applied to UK SECR requirements as of January 2026. Always refer to official government guidance for the most current regulatory requirements.