The climate emergency is finally shaking up our society: national and international climate objectives are becoming clearer, programs aiming at carbon neutrality are multiplying and laws aiming at limiting gas emissions are appearing on all sides. The business world has not escaped this revolution. Indeed, more and more companies are committing, voluntarily or by obligation, to report their emissions and to reduce them. These carbon reports are now very frequent and standardized.
What is included in a corporate carbon report ?
The GHG Protocol, a 20-year partnership between World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) was the first organization to define reporting standards for greenhouse gas emissions, particularly for companies. All information related to corporate carbon reporting can be found here.
A company’s carbon report describes in detail all the emissions related to the company’s activities along the entire value chain. The major difficulty is to determine the boundaries of the emissions’ reporting scope and to assign responsibility to the right organization. Or put more crudely, to determine to what extent one counts and how far one is responsible. For this purpose, the GHG protocol has defined some concepts of boundaries and scopes of emissions.
“The major difficulty when it comes to carbon accounting is to determine the boundaries of the emissions reporting scope and to assign responsibility to the right organization”
What are the boundaries and scope of emissions?
Initially, an organisation has to define the organisational boundaries, which are the physical sites, goods and facilities taken into account in the carbon report. Defining the organisational boundaries can be tricky for complex organisations with, for example, shares in or control of another organisation. However, for most organisations, this part is quite intuitive.
Then, the company has to define the sources of emissions that will be taken into account in the calculation method. These sources are divided into 3 scopes of emissions:
|Scope 1||Direct emissions from sources owned or controlled by the organization. In concrete terms, these are the emissions that take place within the physical limits of the company as defined previously.||Combustion of stationary and mobile sources, non-combustion industrial processes, ruminant emissions, refrigerant leaks, biomass, etc.|
|Scope 2||Indirect energy emissions associated with the production of electricity, heat or steam imported for the organization’s operations.||Elecricity, heat, steam.|
|Scope 3||Other indirect emissions produced by the organization’s activities that are not accounted for in Scope 2 but are related to the complete value chain. They are believed to have the most significant impact of the three scopes in terms of quantity averaging 80% of the total emissions.||Business travel, commuting, inputs, waste, inbound and outbound logistics, etc.|
Generally, the responsibility for Scope 1 and 2 emissions is attributed to the reporting company. Responsibility for Scope 3 emissions is not attributed to the reporting company but to the company that owns these emissions within its Scope 1 and 2. However, even if a company is not responsible for its Scope 3 emissions, it can have an impact on them through various reduction levers.
Generally, the responsibility for Scope 1 and 2 emissions is attributed to the reporting company.
For example, company X uses a third-party transportation company Y to make deliveries of its product. The emissions from the delivery trucks are part of company Y’s Scope 1 and company X’s Scope 3. The responsibility for these emissions is therefore attributed to the delivery company Y. However, Company X can reduce these transportation emissions by using less heavy and efficient packaging, choosing another greener transportation company that uses electric trucks,… It can also be pointed out that one’s scope 1 and 2 are another one’s scope 3.
The 3 scopes of emissions are themself divided into 23 emissions categories, allowing you to precisely target the GHG flows within your organization. Those categories are represented in the following figure.
The objective of scope separation is to determine who is responsible for a source of emissions. But more importantly to include all significant emissions linked to a company’s activities through the entire value chain of a product and on which it can have a reduction impact. This is the reason why it is an essential element found among all public carbon reports.
Now what? You did a carbon report and you want to make something out of it? Or you would like to start the exercise of doing a carbon report. Both subjects are addressed by Tapio.
Tapio, an All-in-One Carbon Management Software, makes it easy and cost-effective to manage your carbon emissions by facilitating the aggregation of the data. With an overview of your carbon emissions, we give you the foundations on which to take action.