An increasing number of companies are committing to achieve net-zero emissions or to migrate to a lower carbon operational model. Measuring an organization’s carbon footprint is the first step to achieving that goal. The GHG Protocol Corporate Accounting and Reporting Standard provide guidance and requirements for organizations when preparing a GHG emission inventory. The GHG Emissions Calculation Tool, developed by GHG Protocol and WRI, provides a freely available calculator to estimate carbon footprint associated with specific sources of the organization.
Carbon footprint is a measure of total anthropogenic emissions of GHGs resulting from a business, activity, product or service. This measurement covers the accounting of seven greenhouse gases which contribute to global climate change by trapping energy within the earth’s atmosphere. In order to reduce an organization’s carbon footprint, it is crucial to allocate emissions by their source. By doing so, an organization can focus on a specific aspect of its business and undertake necessary steps to reduce its GHG emissions.
Understanding carbon footprint
GHG Protocol classifies greenhouse gases into three categories – Scope 1,2 & 3. It is safe to say that there is no company that operates without contributing to all emission categories. Scope 1 accounts for all direct emissions that occur from sources owned or controlled by the company. For example, fuel combustion and emissions from company-owned vehicles. Scope 2 category accounts for GHG emissions from the generation of purchased electricity that is consumed by the reporting organization. Investing in energy-efficient technologies and/or switching to less GHG intensive sources of energy can greatly reduce Scope 2 emissions.
The last category, also known as “value chain emissions” (Scope 3), is an optional category to disclose. It accounts for all other indirect emissions that occur from sources not owned or controlled by the company. As such, they are the most difficult ones to calculate due to several factors. Those include defined operational boundaries, large amount of data to process, data availability and/or data uncertainties, unclear reporting guidance, and others. Examples of Scope 3 activities include business travel, employee commuting, extraction and production of materials, end-of-life treatment of sold products, etc. Regardless of measurement complexity, to set realistic net-zero targets, organizations need to consider these emissions. They represent the largest portion of the corporate carbon footprint. The way to tackle Scope 3 emissions will greatly depend on the organization’s sustainability goals and wider corporate strategy.
GHG classification system
According to the GHG Corporate Protocol, all organizations are required to quantify Scope 1+2 emissions while disclosing Scope 3 emissions is not required when reporting. As previously mentioned, organizations are encouraged to take into consideration Scope 3 to fully understand the GHG impact of their operations. As for Scope 1 and 2 quantifications, GHG Protocol provides detailed guidance and requirements on reporting Scope 3 emissions in GHG Protocol Corporate Value Chain Accounting and Reporting Standard.
Reducing indirect emissions over a company’s value chain is certainly the best way to address challenges. However, some companies may go for a less complex option which is carbon offsetting. The concept of carbon offset is to neutralize Scope 3 emissions organizations cannot eliminate. That is possible by investing in projects that reduce or store carbon – tree planting, solar cookstoves, wind farms, etc. Although this option sounds like the most convenient and least complex one to choose from, carbon offset is not a long-term solution. In a way, the opportunity to offset organizations’ emissions allows big businesses and individuals to continue with unsustainable practices. Therefore regardless of the emission calculation complexity, organizations should make an effort and decarbonize their value chain by making sustainability their top priority.
Understanding a full GHG emission impact of a company is the only way to focus an organization’s effort on the greatest GHG reduction opportunities and consequently, achieve internally set sustainability goals.
