An ISO 14064-1:2018 corporate inventory comes down to five tasks: draw the organizational boundary with a consolidation approach, decide which indirect emissions across the six categories are significant, quantify each source from activity data and a traceable emission factor, write down a base year and recalculation policy, and quantify the uncertainty of the result. Verification is a separate process under ISO 14064-3:2019, carried out by an independent party.
Most of the errors I find in practice are not arithmetic. The boundary decision was never written down, a category shows "zero" with no explanation of why it was excluded, or the base year was quietly changed. Those are exactly the things a verifier asks about, so the order below is the one that keeps you from going back and forth at the verification table.
1. Organizational boundary: which facilities are in
Chapter 3 of the GHG Protocol Corporate Standard recognizes two consolidation approaches: equity share and control. Under the control approach you choose between financial control and operational control. ISO 14064-1:2018 allows the same approaches.
- Equity share: emissions from an operation are counted according to your economic interest in it.
- Control: you count 100% of emissions from operations you control and nothing from operations you hold an interest in but do not control.
If you wholly own every facility, all three options give the same boundary, and the standard says so explicitly. The differences appear in joint ventures, leased sites and toll manufacturing. Take a 50/50 joint venture with its own boiler house: under equity share, half of its emissions are in your inventory; under operational control, if your partner runs the plant, none of them are. Whichever you choose, state it with the reasoning on the first page of the report and keep it stable from year to year.
2. The six categories and how they map to GHG Protocol scopes
The 2006 edition of ISO 14064-1 worked with direct, energy indirect and other indirect emissions. The 2018 edition split indirect emissions into categories. If you report to investors or customers who think in scopes, you need the mapping.
| ISO 14064-1:2018 category | Typical sources | GHG Protocol equivalent (mapping used here) |
|---|---|---|
| 1. Direct emissions and removals | Stationary and mobile combustion, process, fugitive gases, land use | Scope 1 |
| 2. Indirect emissions from imported energy | Purchased electricity; steam, heating, cooling | Scope 2 |
| 3. Indirect emissions from transportation | Inbound and outbound logistics, commuting, business travel, customer and visitor transport | Scope 3 cat. 4, 9, 7, 6 |
| 4. Indirect emissions from products used by the organization | Purchased goods and services, capital goods, waste disposal, leased assets, upstream of fuels and energy | Scope 3 cat. 1, 2, 5, 8, 3 |
| 5. Indirect emissions associated with the use of the organization's products | Use and end of life of sold products, assets leased out, investments | Scope 3 cat. 11, 12, 13, 15 |
| 6. Indirect emissions from other sources | Anything not covered above | No direct equivalent |
The mapping is not one-to-one. Scope 3 categories 10 (processing of sold products) and 14 (franchises) have no named counterpart on the ISO side, so the organization places them where it judges best. Do not force a Category 6 item into a Scope 3 category either; show it separately. Transmission and distribution losses and the upstream (well-to-tank) emissions of fuels are a common source of confusion: the input sits in Category 1 or 2, but the emissions are reported in Category 4. I cover why Turkey's grid factor makes this split impossible to do cleanly in the Scope 2 article.
One note on timing. GHG Protocol and ISO formed a partnership in 2025 to co-develop entity-level accounting standards. The development plan dated 29 July 2026 expects a consolidated draft for public consultation around Q2 2027 and a published revised standard around Q4 2028. Until then, ISO 14064-1:2018 and the current GHG Protocol standards are what you report against.
3. Significance: which indirect emissions you quantify
Categories 1 and 2 are always in the inventory. For Categories 3 to 6, the organization sets criteria for significance, documents the process and justifies what it excludes. If you need a starting list of criteria, Table 6.1 of the GHG Protocol Scope 3 Standard works well: size, influence, risk, stakeholders, outsourcing, sector guidance and other.
You cannot judge size without a number, but a rough one is enough for the first pass. Estimate from spend, tonnage or headcount, then compare each subcategory's share of the expected indirect total with your threshold.
A hypothetical case: expected indirect total 20,000 tCO₂e, waste disposal screened at 90 tCO₂e, or 0.45%. If the policy sets the size threshold at 1%, waste fails on size. But if waste collection is outsourced and your largest customer asks about waste emissions in its supplier survey, the outsourcing and stakeholder criteria still make it significant. The decision goes on record with its reasoning.
"Zero" and "excluded" are different things. If a line that was calculated and came out at zero looks the same in the report as one that was never assessed, the verifier cannot tell them apart and will raise a finding.
4. Quantification: activity data, factors, GWP
The calculation itself is simple: activity data times emission factor, converted to CO₂e gas by gas with global warming potentials (GWP). The care goes into the factor's boundary:
- IPCC 2006 default fuel factors are on a net calorific value basis. Turkish natural gas bills state the gross calorific value; multiply without converting and the result is inflated.
- For grid electricity in Turkey, use the consumption-point factor published by the Ministry of Energy and Natural Resources (ETKB). The grid factor calculated for project-based carbon credits is a different publication and does not belong in a corporate inventory.
- Choose the GWP set (AR6, AR5) at the start and state it in the report. Aggregated CO₂e factors were calculated by their publisher with the publisher's own GWP set; do not try to convert them, disclose the difference instead.
5. Base year and recalculation
Chapter 5 of the GHG Protocol Corporate Standard requires a base year recalculation policy and disclosure of any significance threshold applied. The company sets the threshold; the verifier checks that the company follows its own policy. The standard makes no specific recommendation on what counts as "significant".
Recalculation is triggered by:
- Structural changes: mergers, acquisitions, divestments, outsourcing or insourcing of emitting activities.
- Changes in calculation methodology or improvements in the accuracy of emission factors or activity data.
- Discovery of a significant error, or of several errors that are significant together.
Organic growth or decline does not trigger it, and neither does acquiring a facility that did not exist in the base year. The effect is assessed cumulatively: several small acquisitions can cross the threshold together.
A hypothetical example: base year 2022, total 8,000 tCO₂e, policy threshold 5%. In 2024 the company buys a facility that was operating in 2022 and emitted 600 tCO₂e that year. 600 / 8,000 = 7.5%, above the threshold, so the base year is recalculated to 8,600 tCO₂e. If a small unit emitting 150 tCO₂e was sold in the same year, the net effect is 450 tCO₂e, or 5.6%, and the outcome is still a recalculation.
6. Uncertainty: IPCC 2006 Volume 1, Chapter 3
IPCC gives two approaches. Approach 1 is propagation of error: for a product, take the square root of the sum of squared relative uncertainties (Equation 3.1); for a sum, combine the absolute uncertainties the same way and divide by the total (Equation 3.2). Approach 2 is Monte Carlo simulation. Both report a 95 percent confidence interval; if the distribution is asymmetric, lower and upper limits are given separately.
A hypothetical site:
| Source | Emissions (tCO₂e) | Activity data U | Factor U | Source U (Eq. 3.1) |
|---|---|---|---|---|
| Natural gas | 1,000 | ±2% | ±5% | ±5.39% |
| Grid electricity | 500 | ±1% | ±10% | ±10.05% |
Total uncertainty: √((1,000 × 0.0539)² + (500 × 0.1005)²) / 1,500 = 73.7 / 1,500 ≈ ±4.9%.
Watch for two traps. The first is correlation: treat twelve monthly electricity lines that share one emission factor as independent, and the factor uncertainty shrinks artificially. With twelve equal lines and a ±10% factor error, the independence assumption gives roughly ±2.9%, yet the error points the same way in all twelve lines and stays at ±10%. IPCC asks you either to model the correlation explicitly or to aggregate the data. The second is the validity range: Approach 1 is reliable while the coefficient of variation is below about 0.3. With wide-ranging sources such as wastewater methane or refrigerant leaks, Monte Carlo gives a better answer.
7. Verification: ISO 14064-3:2019
ISO 14064-3:2019 specifies principles and requirements and provides guidance for verifying and validating GHG statements at organization, project and product level. The 14060 family is programme-neutral: where a GHG programme applies, its requirements sit on top of ISO's.
The verifier sets a level of assurance (limited or reasonable) and a materiality level, then samples. In practice the evidence requested is always the same: the consolidation decision, the significance records, the source and year of every factor, proof of activity data (invoices, meter readings, delivery notes), the base year policy and the uncertainty calculation. If these are not produced alongside the inventory, verification turns into weeks of collecting documents after the fact.
How Carbolyt handles it
On the platform, the consolidation approach is chosen at company level and has no default. Activity lines are entered by ISO 14064-1 subcategory; GHG Protocol categories are derived through an explicit mapping table, and anything that cannot be mapped is shown separately. The significance module uses the Table 6.1 criteria and the organization's own threshold, and lists every subcategory still awaiting a decision. If the base year policy has no threshold, the platform does not answer whether recalculation is required; it does not invent one. Completed calculations are frozen, and a factor change shows up in a new calculation as a methodology change.
Uncertainty is calculated with both Approach 1 and Monte Carlo. Lines sharing a factor are treated as correlated, and because the Monte Carlo seed is tied to the calculation, a verifier can reproduce the same result. The verifier reviews the inventory read-only from their own account and records findings; no opinion can be issued while a finding is open, and a positive opinion locks the inventory. You can try it with your own data in a demo account, and the full list of references is on the regulation page.
Frequently asked questions
How do the six ISO 14064-1 categories map to GHG Protocol scopes?
Category 1 corresponds to Scope 1 and Category 2 to Scope 2. Categories 3 to 6 together correspond to Scope 3, but their subcategories do not line up one-to-one with the 15 Scope 3 categories. Disclose the mapping table you use.
When does the base year have to be recalculated?
Under Chapter 5 of the GHG Protocol Corporate Standard, structural changes (mergers, acquisitions, divestments, outsourcing and insourcing), changes in calculation methodology or emission factors, and significant errors trigger recalculation when they exceed the company's own significance threshold. Organic growth or decline does not. The company sets the threshold and discloses it.
Which method is used for inventory uncertainty?
The 2006 IPCC Guidelines, Volume 1, Chapter 3, give two approaches: Approach 1, propagation of error (Equation 3.1 for products, Equation 3.2 for sums), and Approach 2, Monte Carlo simulation. Results are expressed as a 95 percent confidence interval. Approach 1 becomes less reliable when the coefficient of variation exceeds about 0.3.
Can the consultant who prepared the inventory also verify it?
No. ISO 14064-3:2019 sets out principles, requirements and guidance for verifying and validating GHG statements, and verification is done by a party independent of the inventory preparer. Where a GHG programme applies, its requirements come on top of the ISO requirements.
Sources
- GHG Protocol, A Corporate Accounting and Reporting Standard (Revised Edition), Chapters 3 and 5
- GHG Protocol, Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Table 6.1
- 2006 IPCC Guidelines, Volume 1, Chapter 3: Uncertainties
- ISO 14064-3:2019 standard page
- GHG Protocol, Corporate Standard Development Plan (29 July 2026)
This article is for information and is not legal advice. Dates and rates reflect the official texts at the time of publication; check the current text before acting.