Understanding Your Carbon Emissions

Having a decent understanding of your carbon emissions, for any company or organisation (no matter the size) is important. Understanding your carbon emissions does not need to be perceived as a daunting task.

When you understand your carbon emissions, see it is an opportunity for you know which areas of your company you need to prioritise to decarbonise your activities.

How much do you understand your emissions?

If you are just setting out on your journey to understand your carbon emissions, the first thing you need to do develop a Greenhouse Gas (GHG) Inventory. A GHG Inventory is essentially a list of emissions sources and their associated emissions – that have been quantified using standardised calculation methodology. This isn’t something you should fear. There are so many useful resources available for guidance on carbon accounting and understanding your carbon emissions (such as the GHG Protocol).

The GHG Protocol establishes comprehensive global standardised frameworks to measure and manage greenhouse gas emissions from private and public sector operations, value chains and mitigation actions (source: https://ghgprotocol.org/about-us ).

The GHG Protocol have developed various standards that have been designed to provide a framework for companies and governments to measure and report GHG emissions in a way to support their own mission and goals.

  • Corporate Standard – provides requirements and guidance in developing a corporate level GHG Inventory.
  • GHG Protocol for Cities – provides a framework for accounting and reporting city-wide greenhouse gas emissions.
  • Mitigation Goal Standard – provides guidance for designing national and subnational mitigation goals as well as a standardised approach for assessing a reporting progress toward goal achievement.
  • Corporate Value Chain (Scope 3) Standard – allows companies to assess their entire value chain emissions impact.
  • Policy and Action Standard – provides standardised approach for estimating the greenhouse effect of policies and actions.
  • Product Standard – can be used to understand the full life cycle emissions of a product.
  • Project Protocol – policy-neutral accounting tool for quantifying the greenhouse gas benefits of climate change mitigation projects.

If you are a company wanting to take your first step in understanding your carbon emissions, the GHG Protocol Corporate Standard is your best friend! To develop a GHG Inventory you need to follow four simple steps:

Step 1 – Set your Organisational Boundary (Chapter 3: Corporate Standard)

An organisational boundary determines what you own or control. There are two approaches that you can take when you consolidate your emissions.

  1. Equity Share Approach
  2. Control Approach

The choice you make will be entirely independent to your company. If you are a company that owns all its operations – it will not matter which approach you take.

So, what is the difference between the two? If you were to take the Equity share Approach, you would account for GHG emissions from the operations according to your share of equity in the operation.

Whereas if you were to choose Control Approach, you would account for 100 percent of the emissions from operations that you have control. If you choose this approach, control will be defined in either operational or financial control criteria.

Step 2 – Set your Operational Boundary (Chapter 4: Corporate Standard)

So, what does this involve? There are two steps to setting your Operational Boundary, and no one will know your company or the company you work for better than you – so when you make your way through this step, really think about your company, what it does, and how it operates.

  1. Identify emissions associated with your company’s operations.
  2. Categorise them into either ‘direct’ or ‘indirect’ emissions (known as Scope 1, Scope 2 and Scope 3 emissions).

What are scope emissions? When discussing carbon or greenhouse gas emissions, you will often hear the reference to scope emissions 9 times out of 10. Therefore, it is important you understand the terminology and their definition.

  • Scope 1 emissions are direct emissions that are either owned or controlled by the company.
    • Company facilities
    • Company vehicles
  • Scope 2 emissions are indirect emissions through purchasing of electricity.
    • Purchased electricity.
  • Scope 3 emissions are indirect emissions that are a consequence of the company but from sources not owned or controlled by it. Scope 3 emissions can be split into both upstream and downstream scope 3 emissions:
  • Upstream scope 3:
    • Purchased Goods and Services
    • Capital Goods
    • Fuel and Energy Related Activities
    • Upstream Transportation and Distribution
    • Waste Generated in Operations
    • Business Travel
    • Employee Commuting
    • Upstream Leased Assets
  • Downstream scope 3:
    • Downstream Transportation and Distribution
    • Processing of Sold Products
    • Use of Sold Products
    • End-of-Life Treatment of Sold Products
    • Downstream Leased Assets
    • Franchises
    • Investments

(Image source: World Economic Forum)

For more information and guidance on scope 3 emissions calculations, use GHG Protocol Corporate Value Chain (Scope 3) Standard.

Step 3 – Set your baseline year for your GHG Inventory (Chapter 5: Corporate Standard)

An Inventory baseline can be used by your company as a basis for setting and tracking progress towards a GHG target or Net Zero target. It can also be referred to as a target base year. Things to consider when choosing a baseline year:

  • Either the most recent complete year (either calendar year or financial year), that you have access to good quality data.
  • Determine the year which most accurately represents your company, and how it operates.

i.e. you should choose a base year the earliest relevant point in time in which you have reliable data.

Step 4 – Identifying and calculating your emissions (Chapter 6: Corporate Standard)

Once you have completed all the above steps, with the help of the GHG Protocol Corporate Standard, you can calculate your GHG emissions using the following steps:

  1. Identify GHG emissions sources.
  2. Select a GHG emissions calculation approach.
  3. Collect activity data and choose emission factors.
  4. Apply calculation tools.
  5. Roll-up GHG emissions data to corporate level

Here you can really utilise the Corporate Standard and head to Chapter 6, page 42 to guide you through this calculation process.

After reading this you might be feeling more confident in having a go at developing your own GHG Inventory for your company or the company you work for. Or if need some help and support in understanding your company’s carbon emissions, either Contact Us or email us at [email protected] or get in touch using our LinkedIn page.