When it comes to environmental issues, greenhouse gases (GHG) have been center stage for many years. Over the decades, they have been mentioned so frequently in news headlines and government policy it seems impossible we still haven’t got global emissions under control.
In order to do so, first we have to start by understanding what they are, and how we should measure and report them, not least because, for something that gets talked about a lot, they’re usually only vaguely understood – until you’re faced with having to count them that is.
what are greenhouse gas emissions?
Greenhouse gas emissions, or GHGs, are a group of gasses that create a greenhouse effect in the atmosphere. They accumulate, trapping heat and reflecting it back to the planet’s surface. This additional heat is absorbed in land and particularly in water, creating an overall increase in global temperatures over time.
When we talk about GHGs, we’re referring to four different gasses and gas groups. These are:
- Carbon dioxide – this is a byproduct of burning organic material and is of particular concern when burning fossil fuels like oil and natural gas. It can be absorbed by plants through photosynthesis.
- Methane – methane is a byproduct of coal, oil and natural gas production, as well as livestock and agricultural activities. It’s also emitted from landfills as waste breaks down.
- Nitrous oxide – nitrous oxide is emitted as part of agricultural and industrial activities, as well as during the burning of fossil fuels, solid waste, and during wastewater treatment.
- Fluorinated gasses – unlike the other GHGs, fluorinated gasses are synthetic. They include hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and nitrogen trifluoride. They are released as a by-product of various industrial processes, and while less commonly found than the other GHGs, have a much higher warming potential.
why do GHGs matter?
Many GHGs are naturally occurring. The reason they get talked about so much is that the amount of GHGs released today from human-led activities vastly outpaces naturally occurring releases and the planet’s ability to absorb them. That’s leading to climate change.
The amount of carbon dioxide in the atmosphere has increased by 30% in the last 60 years, with the largest sources being oil and gas production, along with electricity generation and heavy industry. Left unchecked, emissions will continue to accumulate and cause worldwide temperature increases, which will further lead to extreme weather events and disasters like hurricanes and wildfires.
In fact, the climate crisis is already happening. Even if businesses were to cut their GHGs to zero tomorrow, the carbon dioxide in the atmosphere stays there for anywhere from 300 to 1000 years. It’s too late to stop the warming, but reducing emissions will slow the increase and help prevent future catastrophes.
who has to report GHG emissions?
The requirements for GHG reporting vary by jurisdiction. In Canada, for example, annual GHG reporting is required by industries that emit at least 10 kilotonnes of carbon dioxide equivalent (also called CO2e) as well as manufacturers in a variety of sectors such as: aluminum production, cement production, electricity generation, mining, and paper production.
In the United States, the GHG Reporting Program, or GHGRP, is an annual initiative that targets 41 different sectors in the mining, natural resources and manufacturing industry. Generally, reporting is required where these facilities emit more than 25 kilotonnes CO2e each year.
In addition to federal GHG reporting programs, businesses may find they are subject to reporting at the state or provincial level, or that they have to calculate GHG emissions as part of a voluntary ESG program. Alternatively, reporting may be a condition of doing business with certain investors and customers.
what are the benefits of GHG reporting?
The deadlines to meet our obligations under the Paris Agreement are approaching. By 2030, businesses should have reduced their carbon emissions by 30% from baseline numbers.
Beyond slowing climate change, however, monitoring, measuring and reducing your GHG emissions can provide a number of additional benefits, including:
- Enhanced Corporate Reputation and Brand Value
By disclosing GHG emissions and reporting on year-over-year reductions, you can build a positive reputation among customers, investors, employees, and other stakeholders. - Responsible Investment Opportunities
Businesses that actively engage in GHG reporting and reduce their carbon footprint are more likely to attract investors who are increasingly interested in ESG factors. - Cost Savings
Implementing energy-efficient technologies, adopting renewable energy sources, and optimizing processes can lead to reduced operational costs and enhanced competitiveness. - Reduced Regulatory and Legal Risks
Companies that proactively assess their climate risks are better positioned to adapt to evolving climate policies, while reducing the risk of potential fines, penalties, or reputational damage. - Improved Supply Chain Resilience
By evaluating the carbon footprint of suppliers and partners, you can identify vulnerable points in your supply chain. By working collaboratively you can minimize risks and reduce emissions. - Enhanced Employee Engagement and Talent Attraction
Employees are increasingly seeking workplaces that prioritize sustainability. GHG reporting signals a company’s commitment to addressing climate change, which can help to attract top talent. - Innovation and Competitive Advantage
Emission reduction targets often drive organizations to explore new technologies, products, and services. These innovations can lead to a competitive advantage.
what is greenhouse gas emissions reporting?
Unfortunately, estimating your GHG emissions is not as simple as looking at your business’s utility bills for the past year. Calculations use published emission factors that are specific to individual industrial processes and activities.
Among the various frameworks available for calculating GHG emissions, the Greenhouse Gas (GHG) Protocol, or GHGRP, stands as a widely recognized and respected methodology for measuring and reporting corporate greenhouse gas emissions.
Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it provides a standardized and transparent methodology for companies to measure and manage their carbon footprint accurately.
In order to successfully reduce GHG emissions, it is important to take a holistic approach that isn’t limited to activities within your facilities. As such, the GHG Protocol requires reporting on scope 1, 2, and 3 emissions.
- Scope 1: Direct emissions from sources that you own or control, such as emissions from company-owned vehicles or on-site manufacturing processes.
- Scope 2: Indirect emissions generated from purchased electricity, heat, or steam consumed by the company.
- Scope 3: Indirect emissions occurring in your value chain, including emissions from suppliers, customers, and transportation of goods.
Successfully measuring or estimating emissions from all three scopes means collecting information from a variety of different people and departments within your organization, as well as others up and down the supply chain.
the GHG protocol corporate standard
Because the GHG Protocol is meant to be used by organizations regardless of sector or location, it is in fact divided up into a number of different standards, including a community standard for municipalities, and a product standard to help organizations understand emissions throughout a product’s full life cycle.
The Corporate Standard is designed to provide guidance for businesses on estimating their climate impacts as well as potential risks and opportunities in their operations. Completing reports in accordance with the standard involves six steps.
step 1: organizational boundary and scope definition
For businesses new to sustainability reporting, the first step is to identify the organizational boundary and define the scopes. This involves determining the extent of the company’s operations, subsidiaries, and joint ventures to be included in the reporting.
step 2: data collection
- Accurate data collection is crucial for credible sustainability reporting. To start,
Identify the sources of emissions within each scope - Consider the type of energy used, fuel consumption, and business activities
- Contact relevant departments, such as procurement, operations, and finance, to gather the necessary data
Along with being accurate, data collection needs to be done as efficiently as possible. This phase is often where sustainability programs go off the rails. Reporting teams may spend so much time collecting data they don’t have time to bring value to the organization through implementing changes that work towards reduction targets.
step 3: emission calculation
Once the data is collected, calculate the emissions for each scope using the emission factors provided in the GHG Protocol. These factors are region-specific and help convert energy consumption data into equivalent greenhouse gas emissions.
The GHG Protocol Corporate Standard provides calculation tools and guidance including cross-sector calculators for emissions sources like stationary combustion that are present in a large number of businesses, as well as geographically- and sector-specific tools.
step 4: setting targets and goals
As part of your sustainability journey, it’s essential to set ambitious yet achievable sustainability goals. These targets can be based on various factors, such as reducing absolute emissions, improving energy efficiency, or promoting renewable energy use. Ensure that the goals are measurable and time-bound to track progress effectively.
Sustainability reporting isn’t a one-time event, and the changes needed to achieve documented targets can involve capital expenditures or process alterations. As such, it’s important to document year-over-year progress toward achieving targets and provide context for when you may be behind timelines, or where your efforts exceed expectations.
step 5: verification and assurance
When possible, it’s recommended to seek external verification or assurance of the reported data. Independent verification adds credibility to the report and demonstrates the company’s commitment to transparent and accurate reporting.
step 6: reporting and communication
Transparency is a critical component of sustainability reporting. Consumers, investors, and the community are all expecting companies to be open about their efforts to reach global GHG reduction targets.
Once your report is complete, a copy should be made publicly available. This is usually done through a company website, or the report may also be included with other documents like financial reports.
Ready To Start?
The GHG Protocol offers a robust framework for measuring and reporting greenhouse gas emissions, providing a solid foundation for those venturing into sustainability reporting.
By following the protocol, you can embark on your reporting journey with confidence, ensuring transparency, credibility, and a positive impact on both your business and the community.
Unfortunately, however, calculating GHG emissions and keeping them up to date can be time consuming. And it can be frustrating if all your team does is spend all year collecting data and building reports, with no time left to follow through on achieving targets.
Thankfully, the AMCS Sustainability Platform can help streamline the process. Data can be populated directly from source using internet-of-things (IoT) integrations or entered directly by the people who have the information at hand, rather than going through a tangle of spreadsheets and email chains.
Results are then converted into standardized units, and run through published emission factors to determine your overall carbon footprint. This simplifies compliance with standards like the GHG Protocol, as well as making it easy to produce customized reports tailored to the needs of company leadership, stakeholders, and investors.
If you need a platform to support your GHG reporting, contact us to learn more about how AMCS experts can help.