What are GHGs?

GHG refers to greenhouse gases - atmospheric compounds that trap heat in Earth's atmosphere through infrared radiation absorption. These gases create the natural greenhouse effect essential for planetary habitability, yet human activities have dramatically increased their concentrations, driving climate change acceleration. The seven main greenhouse gases recognised by international protocols include carbon dioxide, methane, nitrous oxide, and fluorinated gases, each with distinct warming potentials and atmospheric lifespans. Understanding GHG meaning has become critical for financial professionals and corporates globally, as greenhouse gas emissions data increasingly influences investment decisions, regulatory compliance, and ESG reporting frameworks. Modern greenhouse gas accounting enables organisations to measure their complete climate impact across operations and value chains, supporting evidence-based sustainability strategies that address one of the most pressing environmental challenges of our time.

What Are Greenhouse Gases: Scientific Foundation and Core Types

The Greenhouse Effect Mechanism

Greenhouse gases possess unique molecular properties that enable heat trapping through infrared radiation absorption and re-emission back toward Earth's surface. This natural greenhouse effect maintains global temperatures approximately 33°C warmer than would occur without atmospheric greenhouse gas concentrations, creating habitable conditions essential for life. However, human activities have enhanced this natural process by dramatically increasing atmospheric greenhouse gas concentrations since the Industrial Revolution. Carbon dioxide levels have climbed to almost 425 parts per million in 2024, representing more than 50% above pre-industrial concentrations and the highest levels in over 3 million years. The enhanced greenhouse effect now drives global warming at unprecedented rates, with greenhouse gases contributing approximately 70% of observed temperature increases since 1851. This fundamental mechanism underlies all climate change impacts, making greenhouse gas management essential for planetary stability.

Main Greenhouse Gas Categories

Carbon dioxide dominates global greenhouse gas emissions, accounting for approximately 74-80% of total anthropogenic emissions primarily from fossil fuel combustion, deforestation, and industrial processes. Despite lower atmospheric concentrations, methane demonstrates significantly higher warming potential per molecule, with agricultural activities, waste management, and energy production representing major sources. Nitrous oxide, though present in smaller quantities, exhibits exceptional warming potential nearly 300 times greater than carbon dioxide over 100-year periods, originating from agricultural fertiliser application and industrial activities. Fluorinated gases, including hydrofluorocarbons and sulfur hexafluoride, represent synthetic compounds with extreme warming potentials exceeding 10,000 times that of carbon dioxide in some cases. These main greenhouse gases each require distinct measurement approaches and mitigation strategies, reflecting their diverse sources, atmospheric behaviours, and climate impact characteristics that inform comprehensive greenhouse gas management frameworks.

GHG Measurement and Global Impact Assessment

Global Warming Potential and CO2 Equivalents

Global warming potential provides the standardised framework for comparing different greenhouse gases by measuring their heat-trapping capacity relative to carbon dioxide over specified time horizons. This methodology enables carbon accounting systems to aggregate diverse greenhouse gas emissions into carbon dioxide equivalent units, facilitating comprehensive carbon footprint calculations across organisations and sectors. The conversion process multiplies each gas quantity by its respective warming potential value, creating comparable metrics essential for greenhouse gas emissions reporting and target setting. Methane's 100-year global warming potential of approximately 28 means one tonne generates equivalent climate impact to 28 tonnes of carbon dioxide, while nitrous oxide's warming potential of 265 creates substantially higher per-unit impacts. These standardised measurements enable businesses to identify emission hotspots, compare mitigation options, and track progress toward climate objectives through robust data methodologies that support informed decision-making.

Current Global Emission Trends and Sources

Global greenhouse gas emissions reached record levels of 53.0 gigatons carbon dioxide equivalent in 2023, representing continued growth despite international climate commitments and clean energy investments. Fossil fuel combustion remains the dominant source, with energy production, transportation, and industrial activities generating the majority of carbon dioxide emissions worldwide. Agricultural systems contribute substantial methane emissions through livestock farming and rice cultivation, while also producing nitrous oxide from fertiliser application and soil management practices. The burning of fossil fuels for electricity generation represents the single largest emission source globally, though transportation and industrial processes contribute significant additional quantities. Human activities have fundamentally altered natural greenhouse gas cycles, with atmospheric concentrations now exceeding natural levels by unprecedented margins that commit Earth to continued warming regardless of future emission trajectories, emphasising the urgent need for accelerated mitigation strategies across all sectors.

GHG Accounting Standards and Corporate Applications

Modern greenhouse gas accounting frameworks enable organisations to systematically measure, report, and manage their climate impact through standardised methodologies that support regulatory compliance and strategic decision-making. The GHG Protocol provides internationally recognised standards for corporate greenhouse gas accounting, establishing three-scope frameworks that capture direct emissions from owned sources, indirect emissions from purchased energy, and value chain emissions from upstream and downstream activities. These comprehensive approaches enable businesses to identify emission hotspots, evaluate mitigation opportunities, and track progress toward climate objectives through robust data collection and analysis. Mandatory climate disclosure requirements increasingly reference established greenhouse gas accounting standards, transforming environmental reporting from voluntary sustainability practice to regulatory compliance imperative across multiple jurisdictions globally. Advanced ESG data solutions support organisations in implementing these frameworks effectively, providing the analytical capabilities and scientific methodologies necessary for accurate greenhouse gas measurement and strategic climate risk management that will define competitive advantage in the evolving global economy.