5 Steps to Complete Your GHG Reporting
Now that you know the importance of completing GHG reports, it’s time to dive into how to do so. Below are five steps your organization can follow:
1. Decide who is responsible for completing GHG reports
The first thing you need to do is decide who will complete these reports in your company. The following are some options and an explanation of each approach:
Sustainability/EHS Team
This team has a record of all ESG-related initiatives and reports in the organization. They are aware of the greenhouse gases the company emits and how it’s doing so. However, certain employee information like how everyone is commuting to work or records of business travel may not be accessible to them, as they lay with the Finance Team or HR. Certain pockets of information may be missing using this method, so an accurate GHG report may be hard to create.
Finance Team
Contrary to the Sustainability/EHS Team, the Finance Team does have access to all the company’s business costs in each location/facility. However, it may still be inaccurate for this team to complete the GHG report as they do not have the full picture of exactly what carbon emissions may result from your Scope 1, 2, and 3 emissions and the right Emissions Factors or Global Warming Potentials to use during the calculation process (more on this later!).
Sustainability/ EHS Team working with the Finance Team
With information from both sides, the Sustainability/EHS Team working alongside the Finance Team can paint an accurate picture of GHG emissions. The Sustainability/EHS Team can provide their expertise and knowledge to the Finance Team, who have the necessary skills and additional employee/company information to make accurate calculations.
We recommend using the final approach so you can have accurate GHG reports which showcase your organization’s true emissions. If you do not have access to a sustainability team, consider an external sustainability analyst or consultant (which you’ll certainly have access to with EcoOnline).
2. Establish your GHG scope and framework
After having all the necessary stakeholders in place, you must decide which activities will be included in your GHG report. The Greenhouse Gas Protocol highlights two different consolidation approaches you can follow.
Equity Share Approach
This approach includes emissions from operations your company has an ownership stake in. For instance, if your organization is located on a certain floor of a building with 10% equity in that building, the company would only report 10% of greenhouse gas emissions.
Control Approach
The Control Approach, which is much more commonly used, is when you include greenhouse gas emissions from the operations which your company is in control of, whether operationally or financially.
Once you’ve decided on an approach, make sure you familiarize yourself with the framework you must comply with in your region such as the TCFD, SEC, SECR, etc.
3. Collect your data
Now that you’ve decided on your organization’s approach and understood your respective framework, you must begin to collect the relevant data. Because this encompasses so much within the organization, this will include a variety of reports. From business travel costs and electricity bills, to how employees get to work every day and the waste they generate while in the office, make sure you have all the right data.
Collect all the relevant Scope 1 and 2 emissions data that applies to your organization. Where can you find these? Look at natural gas bills, the amount of fuel used to power your vehicles and equipment on-site, as well as heating, cooling, and electricity bills to name just a few sources.
Right now, Scope 3 reporting isn’t mandatory, but you can begin to have the methods in place to collect this type of information. For instance, set up a company-wide survey to learn how employees commute to work. You can also log all business travel as well as any transportation or distribution activities.
4. Make the necessary calculations
Pull out your calculators because now it's time to complete some equations (thankfully, you’ll have the Finance Team on your side to help during this step). After collecting all your data, the first thing you should do is be wary of units. For instance, your electricity bill could either be in kilowatt hour (kWh) or gigajoule (GJ). Also, bear in mind that a single type of activity like your electricity bill could produce more than just one type of greenhouse gas.
Now it’s time to convert these values to quantities of greenhouse gases. Let’s use the following example of a natural gas bill from a company located in the UK. Their bill this month amounted to 11,737 cubic meters (m³). This amount, found in your bill, must then be multiplied by an Emissions Factor (EF). What’s that? Emissions factors delineate how much greenhouse gas was released according to a certain activity and are often in a ratio of unit of greenhouse gas and that of an organization’s activity. For instance, in the case of your electricity bill, it would be in CO₂/kWh.
Now, back to our example. We already mentioned your natural gas bill is 11,737 m³. Greenhouse gases emitted from using natural gas include carbon dioxide, methane, and nitrous oxide. You must gather the right emissions factor for each gas. You can obtain this information from your local service providers or government institutions. All the following emissions factors are according to the average UK network*:
The Emissions Factor for CO₂ = is 2,034.37g CO₂/m³
The Emissions Factor for CH₄ = 0.1096g CH₄/m³
The Emissions Factor for N₂O = 0.0035906g N₂O/m³
Now, we need to convert our natural gas bill amount to a quantity of greenhouse gas. We do this by multiplying the total amount of natural gas used by the emissions factors.
11,737 m³ x 2,034.37g CO₂/m³ = 23,877,400.7g CO₂
(the m³ unit is canceled out)
11,737 m³ x 0.1096g CH₄/m³ = 1,286.37g CH₄
(the m³ unit is canceled out)
11,737 m³ x 0.0035906g N₂O/ m³ = 42.14g N₂O
(the m³ unit is canceled out)
Now we have measurements in units of different greenhouse gases, to account for how much each gas is being released during a specific activity. Because each of these amounts is a different gas, we need to convert them into one uniform unit. How do we do this? Global Warming Potentials (GWP). Global Warming Potentials are ratios which show the effect of a certain amount of greenhouse gas juxtaposed with the same amount of carbon dioxide. (Stay with us! You’re almost there.)
Let’s continue with our example of the natural gas bill. You have the three above amounts which must each be multiplied by a Global Warming Potential. These values might change, so make sure you’re using the most recent, which you can currently find in the sixth assessment report done by the Intergovernmental Panel on Climate Change (IPCC). If this is not the first time you are completing your GHG reports, stick with the Global Warming Potentials you initially used.
According to this report, the following are the Global Warming Potentials needed for our calculations:
GWP of CO₂ = 1
GWP of CH₄ = 29.8
GWP of N₂O = 273
So, let’s take the results we got when multiplying by the EF seen above and multiply those by the corresponding GWP. It’s easier to convert the above values to metric tonnes so you can get the same resulting unit which will be in tonnes of carbon dioxide equivalent (tCO₂e).
23,877,400.7g CO₂ or approx. 24 tonnes x 1 = 24 tCO₂e
1,286.37g CH₄ or approx. 0.001286 tonnes x 29.8 = 0.0383228 tCO₂e
42.14g N₂O or approx. 0.00004214 tonnes x 273 = 0.01150422 tCO₂e
Now that all the values are in the same unit, we can add them to get the total GHG emissions value.
24 tCO₂e + 0.0383228 tCO₂e + 0.01150422 tCO₂e = 24.04982702 tCO₂e
Congratulations! You have now gotten the value of total GHG emissions from your natural gas bill. This method of calculation should be replicated for each of your company’s Scope 1, 2, and 3 activities to get the total amount of GHG emissions it is responsible for.
5. Submit your GHG report
The final step is to make sure your GHG reports and all the data you’ve gathered is compliant with your respective regional framework. As mentioned above, different frameworks apply in different areas around the globe. Have you tried our Sustainability Compliance Navigator Tool yet?
Try it now to find out what compliance frameworks you should be following based on your location when completing your GHG reports.
Remember to always make these reports easily accessible to an external auditor. Once you’ve made sure everything is in order, you can now submit your GHG reports to your regional regulatory body.
*These numbers may be out of date depending on when you are reading this eBook