GHG Protocol Reporting – Everything you need to know (& more)8 min read

A good understanding of Greenhouse Gas emissions and reporting their impact is becoming increasingly important to many companies in various sectors. So, let's start this year with some effective sustainable action. And to help you do so, we have created an overview on everything you need to know and how to effectively measure one of the most important sustainability reporting standards: the Greenhouse Gas (GHG) Protocol.
GHG protocol reporting

As the title already points out, in this article we will present a concise deep dive into the appropriate standard: the Greenhouse Gas (GHG) Protocol. 

A good understanding of greenhouse gas impacts is important as it enables companies to thoroughly understand their climate hotspots as well as to spark the proper responsive actions.

Indeed, measuring, reporting, and managing Greenhouse Gas (GHG) emissions (scope 1, 2, and 3) is becoming more and more mission-critical for many companies. Therefore, a good understanding of GHG impacts:

1) Enables companies to thoroughly understand their climate impacts;
2) Sparks the proper responsive actions and allows for a robust strategy;
3) Allows them to make environmental claims to stakeholders.

Recap: What is the GHG Protocol?

We have all heard of the term ‘Greenhouse Gasses’. It’s probably one of the most famous terms that needs reducing when it comes to sustainable action right?

Well, the Greenhouse Gas (GHG) Protocol was developed in the late ’90s and is the global standard framework for measuring and managing these greenhouse gasses (GHG).  Most of its listed corporations have reported according to the GHG protocol for years already. The framework is now also being adopted more and more by small and mid-size enterprises.

Source: Greenhouse Gas Protocol

The GHG protocol applies to measuring greenhouse gasses in both the public and private sector and provides standards that create a common ground for many sustainability certifications and reporting systems. 

As a result, GHG Protocol reporting is receiving an increasing amount of attention and is now increasingly adopted worldwide as the standard framework for measuring climate risks and climate performance. 

Indeed, other standards such as the Global Reporting Initiative (GRI) and the International Integrated Reporting Council (IIRC) are built on the GHG protocol. 

So, we know for sure; the GHG protocol should not be underestimated. It’s the base for every sustainability year report- and it’s tricky to measure.

Sign up below for our free webinar on how to effectively measure your scope 1,2, and 3 emissions on the 20th of January, 2020.

Sustainability Reporting: What are the GHG Standards?

We see that reporting on GHG is more and more required in company’s sustainability/CSR year reports and increasingly important in strategic decisions.

And as the GHG protocol report is a framework, it entails a couple of standards for different organizational levels that can help organizations to measure and achieve their missions and goals. The most important standards for sustainability reporting are:

  1. The Product standard: The Product Standard can be used to understand the full life cycle emissions of a product and focus efforts on the greatest GHG reduction opportunities. This is the first step towards more sustainable products.
  2. The Corporate standard: The GHG Protocol Corporate Accounting and Reporting Standard provides requirements and guidance for companies and other organizations, such as NGOs, government agencies, and universities, that are preparing a corporate-level GHG emissions inventory.
  3. The Corporate Value Chain (Scope 3) Standard: The Corporate Value Chain (Scope 3) Standard allows companies to assess their entire value chain emissions impact and identify where to focus reduction activities.
  4. The Project Protocol: The GHG Protocol for Project Accounting is the most comprehensive, policy-neutral accounting tool for quantifying the greenhouse gas benefits of climate change mitigation projects.

The protocol and the standards mentioned above look at both indirect– as well as direct emissions that occur in companies’ value chains (also called scope 1, 2, and 3 emissions- we’ll discuss that soon). 

Science-based targets & KPI’s

When it comes to the GHG standards, organizations often set science based targets and KPI’s. This helps them to make the claim that they operate ‘within the boundaries of the planet’, i.e. the Paris Agreement, whether that is ‘within the boundaries of 1.5. or 2 degrees scenario’.

Companies can formally submit their target to SBTI, which also verifies that such targets have been set in line with the SBTI methodology. The methodology allows for various types of target setting, which should be decided upon depending on the nature of the business

So: lots to do. 

What are Scope 1,2 and 3 Emissions and why do I need to measure them?

The GHG emissions are generated from all kinds of organizational activities throughout your supply chain. According to the GHG Protocol, these emissions can be categorized into three scopes: Scope 1,2, and 3. They are defined as follows:

Scope 1: Emissions from scope 1 are direct emissions. This means that they directly come from your company’s owned- or controlled source, such as company vehicle emissions.

Scope 2: Emissions in scope 2 cover the indirect emissions from purchased sources, such as your company’s consumed electricity or cooling. For example; this would entail the emissions from the burning of fossil fuels at a power station that generates your electricity. 

Scope 3: Emissions from scope 3 are the trickiest. They include all the other indirect emissions within your entire value chain, this includes the upstream supply chain (suppliers), as well as downstream GHG emissions e.g. occurring with customers. Think of emissions of your business travels, waste disposal transportation, or investments. For many organizations, the scope 3 emissions provide a dominant impact category.

Scope 3 Emissions – The Biggest Impact Reduction Potential

As you can imagine, scope 1 and 2 emissions are more easy to measure than scope 3 emissions. 

But, scope 3 emissions often provide a huge improvement potential, e.g. through the introduction of circular solutions. And although this impact is indirect, it is very strongly influenced by a company’s actions.

For example, think about product innovations to reduce waste processing impacts and the end of your supply chain, or the use of renewable materials to reduce upstream production impacts. 

Hence, to realize our ambitions in terms of circular economy, measuring and managing these emissions provide a critical success factor.  

Some claim that scope 3 emissions are not essential, because of the fact that the accountability for emissions lies with each actor in the value chain. 

However, experience with life cycle thinking already has already proven in the past that ownership over value chain (scope 3) emissions will drive true innovation and the emergence of circular innovations. 

The increasing awareness among many companies has caused them to take more accountability over their scope 3 emissions. Which providing big opportunities for reducing impact. 

And it’s actually doable

Often companies are well aware that scope 3 emissions are dominant factors in many sectors, and hence they want to work on it.

Given the fact that measuring and managing GHG emissions is becoming more critical to organizations’ sustainable missions, there is an increased need for solid technology, to help companies with this critical task.

And this is where we can definitely help you. 

Ecochain’s Environmental Intelligence Platform

Your direct, indirect and supply chain emissions are key metrics for your sustainability strategy en sustainability reporting.

And in order to pursue your sustainability strategy, you need to understand your environmental hotspots and potential alternatives to reduce emissions: the so called what-if scenarios (what happens if I replace a resource with a more sustainable resource). 

Our Environmental Intelligence Program provides you with all these benefits in one robust and reliable tool.

With our software you are able to:

1. Calculate your entire portfolio’s scope 1, 2, and 3 (upstream and downstream) emissions and compare them (to previous years).

2. Find the biggest hotspots in your emissions and identify the highest potential points for reducing your emissions.

3. Create what-if scenario’s on where you can reduce your carbon emissions and use this intel for reduction targets in your strategy.

Move your company towards carbon neutrality

Read more about the 5 steps you can take regarding GHG emissions to manage your climate strategy. Just click the button below.

Our software helps you ensure that your company is measuring all the GHG Protocol requirements and offers you all the necessary environmental calculations and results in a clear, accessible, and effective way. 

And the best thing? You’re not alone. We will be there for you every step in the progress. 

Our environmental specialists can support you in understanding your results and how to report them. 

Sounds great right? Interested in a free demo on what our software could do for you? Plan your demo below.

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Published

December 15, 2020

Lead Specialist

Roel Drost

Author

Zazala Quist

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