Carbon Accounting for Corporates – GHG Protocol

The Greenhouse Gas Protocol is a worldwide standard by which businesses are required to calculate and report their greenhouse gas emissions. It provides a standardized framework for businesses and organizations to measure, report, and manage their emissions. The Protocol collaborates with various entities to establish standards applicable across diverse sectors and facilitate the reduction of greenhouse gas emissions. The Protocol prioritizes the use of primary data to tackle climate change, making this challenging issue more feasible.

Understanding the fundamental concepts and components of a process is the first step towards learning it. The procedure of GHG accounting is lengthy and divided into several steps. However, you will discover the scopes and the types of actions that fall under each of these scopes in this chapter.

GHG Reporting Principles

Relevance

GHG accounting must align with the intended purpose, goals and framework to accurately measure emissions and meet organization requirements. Inventory information must be relevant to the needs of the organization and its stakeholders. 

Completeness

GHG accounting must include all emissions and removals within the reporting boundary, covering significant sources and activities for a complete carbon footprint. If any activity or data point is excluded, the industry is required to disclose this information together with a suitable justification.

Consistency

Consistent GHG accounting enables meaningful comparisons, trend analysis,accurate reflection of emissions changes and tracking of reduction efforts. The industry needs to constantly gather data and periodically improve the data’s quality.

Accuracy

The industry must uphold the highest quality standards in order to preserve the accuracy of inventory activities, data sources, and data quality.

Transparency

Transparency in GHG reporting promotes openness, accountability and trust by providing clear and accessible information on emissions. To preserve data transparency and openness, industry must disclose information on inventories, accountability and data quality.

Things to Know before Carbon Accounting

Organization Boundaries :- Organizational boundaries refer to the scope or extent to which an organization includes facilities, entities or activities in their GHG reporting. It includes explaining the organizational entities for accounting and reporting emissions according to the Consolidation approaches like- Equity based approach and control approach

Operational Boundaries :- Operational boundaries play a crucial role in greenhouse gas (GHG) reporting as they define the scope of emissions to be considered. The primary step in setting operational boundaries is to select which sources of GHG emissions should be included in the reporting and categorization of sources in direct and indirect sources of emissions.

Inventory :- An organized and thorough record of the greenhouse gases released or eliminated during a certain time period by a particular organization, such as a nation, business, or enterprise, is called a greenhouse gas inventory (GHG inventory). Quantifying and monitoring greenhouse gas emissions and removals—substances that contribute to the greenhouse effect and global warming—is the goal of developing a greenhouse gas inventory.

Base year :- A base year is a designated reference year that is used to gauge future emissions and modifications. Selecting a base year is crucial for determining emission reduction objectives, gauging the effectiveness of mitigation strategies, and reviewing the development made in the reduction of Greenhouse gas emission.

Emission factor :- An emission factor is a coefficient that relates the quantity of a specific activity to the amount of greenhouse gas emissions produced. It is a numerical value expressing the average emission rate of a given greenhouse gas for a particular activity or process. Emission factors are essential tools in calculating and estimating emissions from various sources, and they play a crucial role in greenhouse gas inventories, environmental impact assessments, and climate change mitigation efforts.

CO2 equivalent (CO2e) :- The unit of measurement known as “CO2 equivalent” (CO2e) is used to express the total impact of different greenhouse gases (GHGs) in terms of the amount of carbon dioxide (CO2) that would be required to cause the same level of global warming over a given period of time. When comparing and aggregating the effects of various greenhouse gases—each of which has a distinct warming potential—this idea is crucial. The ratio used to determine a greenhouse gas’s CO2 equivalent is called the Global Warming Potential (GWP). The greenhouse gas potential (GWP) of a gas is its relative capacity to trap atmospheric heat over a given period of time when compared to carbon dioxide. For GWP calculations, the most popular time periods are 20, 100, and 500 years.

Biogenic CO2 emissions :– The term “biogenic CO2 emissions” describes carbon dioxide released during the burning or breakdown of biological materials, such as plants or organic matter. Biogenic CO2 emissions include carbon that was recently a part of the atmospheric carbon cycle, in contrast to fossil fuels, which release carbon that has been sequestered for millions of years. By means of photosynthesis, carbon from the atmosphere is incorporated into biogenic materials.

Activity data:- Activity data refers to quantitative information about the processes, operations, or activities that result in the emission or removal of greenhouse gases (GHGs). In the context of greenhouse gas inventories and climate change assessments, activity data are a fundamental component used to estimate the amount of emissions or removals associated with specific human activities.

Direct Emissions:- Greenhouse gases that are directly released by sources that an entity owns or controls are referred to as direct emissions or scope 1 emissions. Burning fossil fuels to produce energy, industrial processes, waste management, and agriculture are some of the activities that cause these emissions. In order to evaluate and control their carbon footprint, set emission reduction goals, and support efforts to mitigate climate change, organizations must track and report their direct emissions.

Indirect Emissions:– Indirect emissions, which are also referred to as scope 2 and scope 3 emissions, are greenhouse gas emissions resulting from an entity’s operations that are not directly owned or controlled by it. Emissions from purchased energy, such as electricity, are included in Scope 2, and emissions from suppliers, transportation, and product use are included in Scope 3. For a thorough understanding of an organization’s environmental impact and the development of successful sustainability strategies, indirect emissions must be tracked and addressed.

Grid:– A power grid, also known as “the grid,” is a complex network that connects power generation sources, such as power plants, with consumers. Transmission lines, substations, and distribution systems are all part of it, allowing for the efficient transfer of electricity over long distances. In order to maintain a steady and dependable power supply for residences, companies, and industries, the grid is essential for balancing supply and demand. Smart grid technologies facilitate the integration of renewable energy sources while simultaneously increasing grid reliability and efficiency.