Get carbon accounting right

Carbon accounting involves measuring and tracking an organisation’s greenhouse gas (GHG) emissions to assess its environmental impact. It quantifies carbon footprints, helping businesses and individuals to understand and manage their contribution to climate change. Accurate accounting aids companies in developing strategies to reduce emissions and promote sustainable practices. The outputs are generally measured as carbon dioxide equivalents or CO2-e, which includes more than just carbon dioxide.

The Greenhouse Gas Protocol is an organization that provides the world’s most widely used global standards for carbon accounting and reporting, for both public and private sectors. It outlines how businesses can define organizational boundaries for GHG reporting and introduced the division of emissions into Scope 1, 2 and 3 to provide a clear overview of where a company’s emissions are occurring in its operations and its wider value chain. GHG Protocol serves to provide guidelines on what to report on, how the reporting should be done, and how data and emission factors can be collected and used.

Scope 1: direct GHG emissions from sources owned or controlled by the organization, such as on-site fuel combustion and process emissions, directly contributing to its carbon footprint.

Scope 2: indirect GHG emissions from the generation of electricity, steam, heating and cooling, that is purchased and used by the organization.

Scope 3: other indirect GHG emissions, occurring from sources not owned or controlled by the organization but by those that it’s indirectly responsible for up and down its value chain, for example, when we buy, use and dispose of products from suppliers.

GHG Protocol, SBTi, and The Paris Agreement
Companies seeking to set science-based targets must follow the standards of the GHG Protocol. Moreover, SBTi helps companies to set emission reduction targets in line with climate science and Paris Agreement goals based on the three scopes developed by the GHG Protocol.

GHG Protocol and CSRD
It is mandatory to report according to the GHG Protocol standards in the upcoming CSRD.

GHG Protocol, ESRS, and GRI
The connection between the GHG Protocol and ESRS is evident in the context of disclosing and reporting on GHG emissions. Most notably the connection is visible in the ESRS disclosure requirements “E1-5 – Energy consumption and mix” and “E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions”.

The connection between GHG Protocol, ESRS, and GRI is established through the disclosure requirements that specifically reference adherence to the principles, requirements, and guidance provided by the GHG Protocol and GRI 305. This interconnected approach ensures a standardised and comprehensive framework for reporting GHG emissions, reflecting a commitment to transparency and environmental responsibility.

GHG Protocol and CDP
More than 9 out of 10 Fortune 500 companies reporting to CDP use GHG Protocol.

Emission factors are coefficients that quantify the amount of greenhouse gas emissions produced per unit of specific activity, such as fuel combustion or energy consumption. They serve as conversion factors, helping to estimate emissions by multiplying them with relevant activity data, facilitating the assessment of environmental impact in various sectors.