The regulatory demand for reducing Scope 1, 2, and 3 emissions is growing, presenting organizations with increasingly complicated decarbonization challenges. However, seeking solutions to minimize the environmental impact without first establishing a clear understanding of their carbon footprint, will undermine any potential for data-driven insights.
Collecting and distilling the information needed can be daunting, especially in the more difficult-to-abate parts of the business as the information is often not centralized and requires a cross-functional effort to collect. Organizations that understand their current carbon footprint can better measure and manage their future emissions. Executing this process thoroughly and accurately is an essential step in a successful emissions reduction strategy.
The process of removing greenhouse gasses (GHGs) can happen at any point in a decarbonization journey, but the earlier a comprehensive accounting of GHG emissions is performed, the quicker organizations can establish a baseline for emissions and get crucial data for tracking reductions over time. To begin the process of measuring the amount of GHG emissions produced in a specified time period, organizations should start by defining organizational boundaries, identifying emissions sources, and collecting data.
An organizational boundary is what separates the internal operations and activities of the organization from the outside and defines if emissions are related to an organization. Defining an organizational boundary is crucial because it helps to clarify the scope and purpose of the organization’s activities and responsibilities, as well as its relationship with other entities in its environment. This will allow organizations to discern which emissions are within their operating boundary (Scope 1 and 2), or value chain (Scope 3).
Organizations are structured in different ways and exert varying levels of control over wholly-owned ventures, subsidiaries, joint ventures, etc. Defining an organizational boundary will identify which parts of the organization will be included in the carbon reporting. Organizations can take a different approach based on what they have the most control over or the ability to make reductions. The GHG Protocol provides three organizational boundary approaches to choose from, including:
Organizations may also want to consider where they have the most opportunity to affect change and reduce emissions. If you can control energy consumption at your facilities, purchase energy-efficient equipment, and procure renewable energy, operational control may be a good approach. However, if you have more ability to affect emissions through actions that could only be taken as a building owner, such as replacing boilers or HVAC systems, then financial control may be a good approach. Finally, if you control a percentage stake in a company or are primarily involved in joint ventures, then equity share may be the best approach.
The Greenhouse Gas Protocol establishes comprehensive global standardized emissions accounting frameworks from which organizations can identify emission sources, calculation guidance, and opportunities for data quality improvements. This step provides a list of potential emission sources within an organizational boundary to be organized within the Scope 1,2 and 3 frameworks.
To accurately measure emissions, it's important to collect activity data from relevant sources, such as natural gas consumption, electricity consumption, and fleet fuel consumption. The GHG Protocol provides helpful guidance on the types of data required for each emission source. In addition to collecting activity data, organizations must also determine the appropriate emission factors for each type of emission source. These factors can vary based on factors such as geography, fuel or energy source used, and equipment efficiency. Using the standard formula for calculating emissions, which is activity data multiplied by emission factor multiplied by global warming potential, organizations can determine their total emissions. The GHG Protocol offers detailed guidance on calculating emissions for each scope, including the factors to use and data to collect, and provides guidance on reporting emissions, emissions management, and setting reduction targets.
Getting a handle on GHG emissions data is an intensive but necessary process for setting a decarbonization strategy up for success. Putting in the work for an accurate carbon footprint snapshot gives the benefit of having clear guidelines for where to focus decarbonization efforts and resources. But the benefits of this process are dependent on the accuracy of the data collected. For organizations that feel this effort is outside the bounds of their capabilities, partnering with an industry expert can help expedite the process, ensure the accuracy of the data collected, and allow for ongoing decarbonization strategy and recommendation.
As the decarbonization landscape becomes more complex, having a clear picture of emissions data is necessary to successfully navigate the field. Organizations that establish a comprehensive carbon footprint as a foundational part of their decarbonization strategy can better measure and manage their emissions reduction and track progress. The more that organizations can accurately quantify decarbonization efforts, the easier it will be to set and adhere to industry benchmarks and help move the needle toward a more sustainable future.
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