GHG Protocol Scope 3 Changes 2026: What UK Businesses Need to Know

The GHG Protocol has published its most significant proposed update to Scope 3 reporting since the original standard was introduced in 2011. For any UK business that produces a carbon footprint report, is working toward Science Based Targets, or responds to supply chain sustainability questionnaires, these proposals deserve attention now, before the public consultation draft is finalised.

This article explains what is being proposed, why the changes are happening, and what UK SMEs should consider doing in the meantime.

What is the GHG Protocol, and why is it revising the Scope 3 standard?

The GHG Protocol  is the organisation that sets the global framework for how companies measure and report greenhouse gas emissions. Its Corporate Value Chain (Scope 3) Accounting and Reporting Standard, published in 2011, underpins most corporate carbon reporting worldwide, including the methodology used in CDP disclosures, Science Based Targets commitments and UK government procurement requirements such as PPN 006.

The revision process began in 2024 and is being managed through a Technical Working Group of 65 members across 20 countries. Crucially, it is being developed in alignment with ISO, with the aim of producing a harmonised international standard for corporate GHG accounting. The Phase 1 Progress Update, published in March 2026, covers three areas: data quality and reporting requirements, boundary setting for Scope 3 inventories, and investment classification.

A full public consultation draft is still forthcoming, so these are proposed changes, not final requirements. However, 80–87% of Working Group members voted in favour of the most significant revisions, which signals a strong and settled direction of travel.

A quick reminder: what is Scope 3?

Carbon footprints are divided into three scopes. Scope 1 covers direct emissions from sources a company owns or controls, such as gas boilers and company vehicles. Scope 2 covers purchased electricity. Scope 3 covers everything else in the value chain: the goods and services a company buys, business travel, logistics, the use of sold products, and end-of-life treatment of goods manufactured.

For most businesses, Scope 3 represents the largest share of their total carbon footprint. It is also the most complex to measure accurately, and the area where the quality of reporting varies most widely. This is precisely why the GHG Protocol is revising the standard.

The five proposed GHG Protocol Scope 3 changes that matter most

1. A 95% inclusion threshold replaces vague qualitative exclusions

This is the single most consequential proposed change. Currently, businesses can exclude Scope 3 categories from their reports provided they disclose and offer a justification. In practice, many justifications amount to “data is unavailable” or “assumed to be immaterial”, without any quantitative evidence to support the claim.

Under the proposed revision, companies would be required to cover at least 95% of their total required Scope 3 emissions. Any excluded categories must be quantitatively demonstrated to fall within that 5% threshold. A high-level hotspot analysis using spend-based or industry average data is explicitly recognised as an accepted method for meeting this requirement, which makes it practically achievable for businesses of all sizes.

This threshold is already used by SBTi  and CDP as a rule of thumb. The proposed revision brings the GHG Protocol itself into alignment with frameworks that many businesses are already working toward.

What this means in practice: Any Scope 3 report that currently excludes a significant category without a quantitative basis will need to be revisited. Categories 1 (purchased goods and services) and 11 (use of sold products) are the most common candidates for unjustified exclusion in SME reports.

2. Data quality must be quantified, not just described

Currently, Scope 3 reports are required to include a description of the types of data used. In practice, this typically means a broad statement acknowledging that some estimates have been applied. The proposed revision replaces this with a mandatory quantitative disclosure.

Under the new approach, businesses would be required to disaggregate their Scope 3 emissions by data type, showing explicitly what proportion of each category is based on primary supplier data, industry-average data, or spend-based estimates. The purpose is to make data quality transparent to anyone reading the report, whether that is a client procurement team, an investor, or a regulator.

This revision received 80% support from the Technical Working Group and is widely expected to be included in the final standard.

What this means in practice: If most of your current Scope 3 data comes from spend-based estimates, that will become visible in a way it currently is not. The revised standard also recommends that companies set year-on-year targets to improve the proportion of primary data in their inventories, making supplier engagement a strategic planning issue rather than an optional extra.

3. Verification status becomes a visible quality signal

Third-party verification of Scope 3 inventories is not proposed as a universal requirement. The Technical Working Group explicitly acknowledged the cost burden this would place on smaller businesses, and mandatory verification was not included in the current proposals.

However, companies that do verify their inventories will be required to disclose whether the inventory is fully verified, partially verified, or not verified, in accordance with ISO 14064-3  or an equivalent standard. The absence of a verification disclosure will itself become a visible indicator as reporting norms mature and larger companies in supply chains increasingly require evidence of rigour from their suppliers.

What this means in practice: For businesses with mandatory reporting obligations, or those responding to enterprise procurement questionnaires, ensuring reports are explicitly prepared for third-party verification becomes increasingly valuable even where verification is not yet undertaken.

4. Required and optional emissions must be reported separately

The revised standard introduces a cleaner structural distinction between required Scope 3 categories  those that all companies must include  and optional categories that companies may choose to disclose. These must appear in separate sections of any report, not combined into a single total.

The reason is comparability. Optional categories such as Category 15 (investments) or Category 11 (use of sold products) can be orders of magnitude larger than required categories for some businesses. Presenting them combined makes meaningful comparison between companies very difficult, which is a problem for procurement teams, benchmarking tools, and rating agencies relying on consistent data.

What this means in practice: Report templates will need updating to reflect this structural separation. Businesses that currently present a single combined Scope 3 total should plan to restructure their disclosure for the next reporting cycle.

5. A new Category 16 for facilitated emissions

A new optional category is proposed to capture facilitated emissions: emissions from third-party activities where the reporting company earns transactional income from facilitating the activity but does not own, buy, or directly control it. Licensing arrangements, platform business models, and many financial services activities fall into this definition.

For most UK SMEs, Category 16 will be optional and of limited immediate relevance. However, businesses operating franchise, licensing, or platform models should begin to understand how this category might apply to their reporting boundary in the future.

What happens next with the GHG Protocol revision?

The Phase 1 Progress Update published in March 2026 reflects the direction agreed by the Technical Working Group following more than 40 meetings since late 2024. A full public consultation draft is still forthcoming. Phase 2, covering category-specific boundary updates and circularity, is already underway.

The GHG Protocol is developing these revisions in direct alignment with ISO, with the objective of producing a single, harmonised international standard. Given the level of Working Group consensus on the core proposals, the overall direction is unlikely to change substantially, even if specific details are refined through consultation.

UK businesses working toward SBTi targets should note that the 95% inclusion threshold already aligns with SBTi conventions. The direction of the revised standard runs alongside the requirements of the most credible voluntary frameworks, not ahead of them.

What should UK SMEs do now?

The businesses best placed for these changes are those that have already built Scope 3 reporting on a structured methodology: covering all relevant categories, using the best available data, and improving year on year. If you are early in that process, the proposed revisions make a strong case for approaching it properly from the outset.

If you already have a Scope 3 footprint: review whether any categories are excluded without a quantitative justification and plan to address those gaps. Start recording the data type used per category so you have the baseline needed for the new disaggregation disclosure when it becomes required.

If you are starting a Scope 3 footprint: begin with a hotspot analysis covering all 15 categories using spend-based or industry average data. This satisfies the proposed boundary-setting requirement and tells you where to prioritise primary data collection. Build the report structure to separate required and optional categories from the start.

If you are working toward Science Based Targets: the 95% inclusion requirement mirrors SBTi conventions already in place. Check your current boundary against this threshold before your next submission.

If clients or commissioners ask about your Scope 3 methodology: you can reference the proposed revised GHG Protocol standard as the framework you are working toward, alongside your existing alignment with DEFRA guidance, ISO 14064 , and PPN 006 .

For businesses working through the SBS Net-Zero Program , the core methodology already incorporates a hotspot analysis step, data source documentation, and a structured approach to Scope 3 boundary setting. The proposed revisions reinforce that approach rather than requiring a fundamental change to it.

About the source

This article draws on the GHG Protocol Scope 3 Standard Revisions: Phase 1 Progress Update, published March 2026. All proposed revisions remain under development and subject to change prior to formal public consultation. This article is not legal or compliance advice.

For questions about how these proposed changes affect your carbon footprint reporting, contact the SBS team (https://sbs.eco/contact).

Further reading

GHG Protocol Corporate Value Chain (Scope 3) Standard — https://ghgprotocol.org/standards/scope-3-standard Science Based Targets initiative Corporate Manual — https://sciencebasedtargets.org/resources/files/SBTi-Corporate-Manual.pdf CDP Climate Questionnaire guidance — https://www.cdp.net/en/guidance ISO 14064-3: Greenhouse gases verification and validation — https://www.iso.org/standard/66455.html PPN 006: Carbon Reduction Plans in government procurement — https://www.gov.uk/government/publications/procurement-policy-note-0621-taking-account-of-carbon-reduction-plans-in-the-procurement-of-major-government-contracts UK DEFRA Greenhouse Gas Reporting Conversion Factors — https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting