One of your largest customers is asking for your GHG emissions data. It might be an updated Supplier Code of Conduct, a request to respond to a CDP or EcoVadis questionnaire or a survey asking about your Scope 1, 2 and 3 emissions and your SBTi targets.
You don’t have a sustainability team, you do not know what the terms mean, and you do not know what data you need to collect or how much time it will take.
Don’t panic, it is not as hard as you think, here’s how to get started.
What are they asking for?
First, the terms:
Scope 1: Emissions produced by your operations. These are from fossil fuels used in your facilities or your vehicles, emissions from your manufacturing processes, or any refrigerants leaked in HVAC systems.
Scope 2: Emissions produced by electricity, heating, or cooling you purchased
Scope 3: Emissions from your value chain, both upstream and downstream of your operations. This is the most complex category, including 15 categories. The good news is that only a few are material to your company, and you can get started with the most significant categories.
The terms and calculation methodology are described in The GHG Protocol, which is used by 97% of companies reporting emissions and is compliant with regulations that require GHG emissions reporting. For more detailed descriptions see: Cheat Sheet for GHG Protocol Terms
The data you will need
At a high level, the data you will need includes:
- Facilities list including location address, area, period of occupancy in the area, and number of employees at the locations
- Utility bills — for Scope 1 and 2 calculations
- List of any mobile assets like vehicles, planes, forklifts, and fuel purchase records or miles traveled
- Financial statements — to calculate purchased goods and services (the largest Scope 3 category for most companies)
- Travel records or expense reports — for business travel emissions
- Payroll or HR files with employee addresses — for commuting calculations
- Your total revenue and your customer’s revenue — to allocate your emissions proportionally to their share of your business
Calculating Emissions
Once you have the data, you can use the methodology prescribed in the GHG Protocol to compute the emissions.
The calculation formula looks simple and is the commonly used method to compute organizational emissions. The nuances are in the details.
What is Activity Data?
Activity data is the data that captures the amount of emissions associated with an operation or activity at your organization. For example, the amount of electricity consumed in terms of kilowatt hours or the number of miles driven by your delivery trucks. Sometimes, primary activity data is unavailable for certain activities. Secondary data can be used as a proxy to estimate activity. For example, the area of an office building can be used to estimate electricity consumption if electricity data it not available.
What is an Emission Factor?
An emission factor represents the amount of greenhouse gas emitted by one unit of an activity.
What is Global Warming Potential?
The GHG Protocol tracks six gases that warm the atmosphere. Each gas has a different “warming potential” and a different duration in the atmosphere. Emissions are expressed in terms of their carbon dioxide equivalent. “GWP” converts other greenhouse gas emissions to their carbon dioxide equivalent.
GHG Emissions consulting firms like Your Carbon Steps help you create your GHG Inventory list and identify the right activity data and emission factor for each item in your inventory.
Do it yourself or get help?
For your initial emissions inventory, it helps to work with an expert who understands the nuances of emissions calculations. They can help you work with the right activity data and use appropriate “Emission Factors” and “Global Warming Potential” to calculate emissions.
Spreadsheets, Tools and/or Consultants?
The experts/ GHG emissions consultants can get you started with spreadsheets to collect all the data, compute emissions, and document the methodology and the sources of the emission factors. Over time, you can review tools and train in-house staff to learn the GHG protocol and improve the data, set reduction targets, and plan decarbonization action.
How we can help
Your Carbon Steps specializes in working with companies in the early stages of their sustainability journey. Contact us and book a free 30-minute call with us.
We follow an easy 4 Step Process:
- Understand the request. Read what your customer is actually asking for — which scopes, which categories, which reporting framework (CDP, EcoVadis, or their own internal form). They’re not all the same.
- Help you identify and collect the data. Pull the documents listed above. In most cases, your finance team can do this in a few hours across two or three sources.
- Calculate your emissions. This is where our expertise comes into play. We follow the methodology and principles established by the GHG Protocol. We use best practices to fill data gaps, relying on industry averages and estimates when needed. Each activity data point maps to an emission factor that converts it into tonnes of CO₂ equivalent.
- Submit your response. Format the numbers to match your customer’s request, with clear documentation of your methodology for verification if needed.
In addition to meeting your immediate need to respond to your customer, we identify insights from the data that help you understand implications for your business operations.
You are receiving GHG emissions requests because your customers have set Scope 3 emissions reduction targets and are looking to improve the accuracy of their Scope 3 emissions data so they can implement programs to meet their targets. Once you have calculated your GHG emissions, you can proactively reach out to other customers and send them your emissions.
Resources
We have extensive resources to build your in-house capabilities and learn more about emissions accounting.
- Get started by watching our webinars
- GHG Emissions Accounting: Creating a GHG Inventory List
- Emissions Accounting and Activity Data and Emission Factors
- Carbon Footprint 101: Scope 1 Emissions
- Carbon footprint 101: Scope 2 Emissions
- Scope 3 Emissions
