Greenhouse gas accounting: How to calculate your CO₂ footprint

What is GHG accounting?

Greenhouse gas (GHG) accounting has recently gained importance due to the increasing concerns caused by climate change. GHG accounting is the process of identifying, measuring, and reporting the total amount of GHG emissions released into the atmosphere by a company's activities. Ultimately, you get a complete picture of your carbon footprint.

These emissions are classified into three groups, or "scopes," based on their source.

• Scope 1 emissions come from sources owned or controlled by the company. These emissions are generally the easiest to quantify and control because they are directly within the company's control. Examples of Scope 1 emissions include emissions from boilers, furnaces, and vehicles (trucks, cars, aircraft, ships) owned and operated by the company.

• Scope 2 emissions are indirect emissions associated with energy consumption. Examples of Scope 2 emissions include emissions from electricity purchased from a utility company, steam purchased from a district heating network, or cooling from a chilled water system.

• Scope 3 emissions come from sources not directly controlled by the company but related to its activities. These emissions can be the most difficult to quantify and control because they can affect multiple companies in the value chain. Scope 3 emissions typically account for the largest share of all types. Examples of Scope 3 emissions include business travel, employee commuting, purchased goods and services (and all associated emissions), waste disposal, and upstream and downstream activities in the supply chain.

Why start now?

Many governments have already enacted regulations requiring companies to measure and report their GHG emissions. Large companies are required to record their emissions, and the threshold (number of employees) is continually being lowered to ensure that eventually all companies record their GHG emissions. While smaller companies are not yet legally required to record their GHG emissions, many feel pressured to do so by their large customers (emissions from a small company can contribute to the Scope 3 emissions of a large company). Early GHG accounting and tracking not only helps companies comply with regulations but also helps them identify areas where they can reduce their emissions and improve their environmental performance. Furthermore, recording their emissions can put companies at a better position against large companies and have a smaller footprint than their competitors.

How do you calculate your GHG footprint?

Various accounting and reporting frameworks can be used to calculate GHG emissions. One framework is the GHG Protocol, which provides guidance on measuring, reporting, and verifying GHG emissions. The GHG Protocol divides emissions into three scopes, as explained above, and provides guidance on which emissions to include in each scope and how to calculate them. To calculate your GHG footprint using the GHG Protocol, follow these general steps:

• Identify the sources of your emissions.

• Collect data from each source, such as fuel consumption, electricity consumption, and transportation.

• Convert the data into GHG emissions using conversion factors.

There are other frameworks, including the CDP, GRI and SBTi guidelines, to name just the most well-known.

Why is data so important?

Data availability is a critical issue in GHG accounting because it is important to track emissions accurately and transparently. However, the availability and quality of data can vary widely, making it difficult to develop a comprehensive GHG footprint. Many companies do not have complete or accurate data on their energy consumption, transportation, and waste generation, which are the main sources of GHG emissions. This lack of data can lead to inaccuracies and errors in GHG accounting, making it difficult to set meaningful emissions reduction targets and track progress over time. Furthermore, some companies may be reluctant to share their data, either due to privacy concerns or fear of negative publicity if their emissions are high. Therefore, it is critical for companies to prioritize data collection and ensure that the data is accurate and reliable. This can be achieved by implementing data management systems, conducting regular audits of data sources, and working with suppliers to obtain data on their emissions.

Conclusion

It's never been more important for companies to measure their carbon footprint and act accordingly. All companies will eventually have to report their GHG emissions, either due to regulations or if they supply a large corporation that needs the data for its own reporting. Starting now will simplify the process and help you stand out from your competitors.

We can only reduce our emissions if we know our baseline.