GHG Protocol Is Rewriting Scope 3: The 95% Coverage Rule, New Category 16, and What It Means for Your ESRS E1 Numbers

Scope 2 isn't the only GHG Protocol standard being rewritten this year. While that revision has been grabbing headlines (see our companion piece on the Scope 2 rewrite), the GHG Protocol is running a parallel, arguably higher-stakes process on the Corporate Value Chain (Scope 3) Standard - the document ESRS E1 leans on wholesale for value chain emissions methodology, and the one that hasn't had a substantive update since 2011.

On 31 March 2026, the GHG Protocol published its Scope 3 Standard Revisions Phase 1 Progress Update. It's a proposal, not a final standard - but it's specific enough that ESRS E1 reporters should start reading it now.

Six proposed changes, in order of practical impact

1. A 95% coverage floor. Companies would need to cover at least 95% of required Scope 3 emissions, with any exclusions quantified and justified rather than just described in prose. The threshold applies only to required categories - optional Scope 3 and the new Category 16 (below) sit outside the calculation.

2. Data-type disaggregation. Each Scope 3 category would need to be broken down by data source type - primary/activity-based data, spend-based estimates, or unclassified - and reported in absolute tonnes CO2e. This is the change with the most teeth: it makes a company's reliance on spend-based, economic input-output estimates publicly visible for the first time, rather than buried inside a single category total.

3. A homogeneous-supplier restriction. Corporate-level allocation of a supplier's emissions is only permitted where that supplier's output is genuinely homogeneous - uniform products, uniform emissions intensity. Diversified suppliers would require product-level or facility-level data instead of a single corporate average.

4. Required and optional Scope 3, reported and labeled separately. No more blending a company's own optional inclusions into the same total as the mandatory categories.

5. A new Category 16 for facilitated emissions. This covers activities like insurance underwriting, licensing, and fuel distribution - emissions a company facilitates rather than directly causes or finances. It's explicitly excluded from the 95% coverage calculation, which tells you the GHG Protocol expects data maturity here to lag the rest of the standard for a while.

6. Category 15 (investments) becomes mandatory for all companies. The boundary expands to cover investee Scope 1, Scope 2 and required Scope 3 emissions across all investment types, with the prior relevance tests removed. This is the change financial institutions and asset owners should be watching most closely.

Verification gets a standard vocabulary

The proposal also introduces standardized disclosure labels - Verified, Partially Verified, Not Verified - for companies that get their Scope 3 data verified, alongside recommended practice around setting and tracking data-quality targets. None of this is mandatory verification; it's a shared vocabulary for describing whatever verification a company already does.

Timeline: what's proposed vs. what's decided

Nothing here is final. The sequence as it stands:

• 31 March 2026 - Phase 1 Progress Update published (the source for everything above).
• Mid-2026 - a full public consultation draft is expected, which is where the proposals above get formal stakeholder comment.
• Late 2027 - a final revised standard is targeted.

Two pieces of context worth holding onto: the current Scope 3 Standard dates to 2011, so this is the first substantive rewrite in over a decade. And in September 2025, the GHG Protocol and ISO announced a formal partnership to co-develop harmonized standards - which raises the possibility that whatever comes out of this revision eventually gets referenced in ISO documents too, extending its reach well past voluntary corporate reporting.

Why ESRS E1 reporters can't just wait this out

ESRS E1 requires Scope 3 GHG emissions disclosure (subject to phase-in and proportionality provisions for some preparers), and it explicitly points to the GHG Protocol as the accepted methodology rather than defining its own. That means a GHG Protocol rewrite flows directly into your ESRS E1 data pipeline - not as a future hypothetical, but as the standard your methodology is already anchored to.

The practical exposure is concentrated in two places. First, the shift toward primary data and away from spend-based estimates: if your Scope 3 categories are currently built mostly on spend-based proxies, the data-type disaggregation requirement will make that visible in your next disclosure, revision or not. Second, the Category 15 expansion: financial institutions and asset owners currently applying relevance tests to trim their investment-emissions boundary should assume that carve-out is going away.

What to lock in now vs. what to leave flexible

Lock in now:

• Start tagging your existing Scope 3 data by source type (primary, spend-based, unclassified) even before it's mandatory - retrofitting this later, category by category, is far more expensive than building the tag into your current data-collection cycle.
• Audit where you're currently applying corporate-level supplier emissions allocation, and flag which of those suppliers are genuinely homogeneous versus where you've been using a convenient average.
• If you're a financial institution or asset owner relying on relevance tests to limit Category 15, start scoping what full-boundary investment-emissions reporting would require - the mandate direction is clear even though the exact boundary language isn't final.

Leave flexible until the mid-2026 draft:

• Exact 95% coverage mechanics and what counts as adequately "quantified and justified" exclusions.
• The final scope and definition of Category 16 facilitated emissions - this is new enough that early process investment here carries real rework risk.
• Verification labeling - useful to know it's coming, not worth building process around until the consultation draft firms up the definitions.

Treat everything above as a proposal under active revision, not a settled requirement. The mid-2026 consultation draft is the next real checkpoint - that's when "proposed" starts turning into "final," and when it'll be worth revisiting your Scope 3 data architecture against the actual text rather than the progress update.