In a world that’s concerned about environmental impact, calculating your greenhouse gas (GHG) emissions is a necessity rather than a choice. It will provide you with a clear view of your business’s impact, empowering you to make smarter decisions, foster partnerships and build a resilient and profitable future.
BENEFITS OF GHG EMISSIONS CALCULATION
Calculating the GHG emissions of your business brings many benefits, including:
Efficiency: a GHG emission assessment highlights inefficiencies within your operations, whether it’s energy wastage or excessive raw material consumption. Armed with this knowledge, your business can make informed decisions to mitigate risks and optimise processes. Competitive advantage: GHG emission calculation isn’t limited to industry giants. Demonstrating your commitment to reducing emissions could open doors to partnerships with larger corporations and other businesses who are prioritising sustainability and want to work with organisations that share their values. Cost savings: a GHG emissions analysis can drive financial gains. It’s a cost-effective exercise that uses data you already collect, such as energy bills and purchase of raw materials. By identifying areas for improvement which are using a lot of energy, you can make changes that will reduce operational costs while aligning with green-conscious client and consumer demands.
Talent attraction and retention: KPMG research released in January 2023 showed that almost half of UK office workers, especially millennials, consider environmental, social, and governance (ESG) factors when choosing jobs. This is leading to a trend known as ‘climate quitting’ where employees look for a more environmentally friendly employer. Enhanced brand reputation: publicising your GHG emissions can enhance your brand’s image, especially if you have third-party verification. Aligning your business with sustainability can attract positive attention and increase brand loyalty. Access to capital: some investors are only interested in funding ethical and environmentally-responsible companies. Calculating your GHG emissions and introducing strategies to reduce your emissions could convince investors to work with you.
A MODULAR APPROACH
However, GHG emissions calculations is not a one-size-fits-all task. The diversity of industries, business sizes and operational complexities requires a structured approach.
Companies worldwide are adopting a standardised approach to GHG emission assessment, as standards offer a structured approach, providing a common language and methodology, which allow businesses to quantify their GHG emissions consistently. Standards are the building blocks for transparent reporting, setting targets and, eventually, reducing carbon emissions. But what standards can be used for GHG emissions calculation?
THE GHG PROTOCOL
One of the most widely recognised standards to calculate GHG emissions is the GHG Protocol. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) in the 1990s, it provides a comprehensive framework for measuring, managing and reporting GHG emissions.
When talking about the GHG Protocol at corporate level, the standard is based on three scopes: direct emissions from sources owned or controlled by the organisation, like fuel combustion; indirect emissions from the consumption of purchased electricity, heat, or steam and indirect emissions from activities that are not owned or controlled by the organisation, such as business travel and supply chain activities.
The three-scope approach of the GHG Protocol at corporate level provides businesses with a comprehensive understanding of their carbon footprint, capturing both emissions within their control and those from their value chain. As the focus shifts to Scope 3 emissions, companies across the value chain will increasingly consider their environmental impact, making environmental responsibility a competitive advantage.
STANDARDS AND BENCHMARKS
Another essential standard for evaluating GHG emissions at the corporate level is the ISO 14064 series. This sets a benchmark for GHG assessments and offers guidelines for organisations to quantify, report, and verify their GHG emissions and removals. In particular, ISO 14064-1 provides clear instructions for transparent and consistent GHG inventory reporting.
For calculating GHG emissions of products and services, the Carbon Footprint tool, based on ISO 14067, is widely used. This measures GHG emissions and reductions expressed as CO2 equivalents for specific products or services, covering activities such as manufacturing, energy consumption and both upstream and downstream transportation.
These standards and tools enable businesses to accurately measure their environmental impact, report transparently, and implement effective strategies for reducing their carbon footprint.
TERMS AND DEFINITIONS
It’s common for the terms ‘calculation’, ‘validation’ and ‘verification’ to become confused. They in fact refer to distinct steps in the process of assessing and ensuring the accuracy and reliability of GHGs information.
GHG emissions calculation refers to the process of determining the total amount of emissions of carbon dioxide and other greenhouse gases emissions associated with a particular activity, product, organisation, or individual, in terms of CO2 equivalents. Validation is the confirmation of a claim through the provision of objective evidence, that the requirements for a specific intended future use or application have been fulfilled (confirmation of plausibility). It helps ensure that the calculation is based on sound and credible information. Verification is an independent assessment to confirm whether the reported impacts accurately represent the actual emissions. A third-party verifier reviews the emission calculations and documentation to confirm their accuracy. This adds an additional layer of credibility and trust to the reported figures.
SUCCESS FOR SUSTAINABILITY
Understanding the standards used for calculating the GHG emissions is crucial for businesses striving for sustainability. Selecting the appropriate standard depends on the company’s business goals, the industrial sector and the stakeholders’ expectations.
Standards provide a structured framework for accurate measurement and reporting. Customised industry-specific standards further enhance transparency and help businesses align with sector-specific goals. By embracing the right standard, businesses can effectively measure their environmental impact, set meaningful targets, and pave the way for a greener future. Consulting with sustainability experts can help you navigate this decision and ensure accurate measurement, reporting and reduction strategies.