This guide provides a high level overview of the steps you should take to arrive at a business carbon footprint. It is an essential supporting document for anyone creating their first inventory or hoping to improve their processes.
This guide is for you if you need to calculate your scope 1, scope 2, and even scope 3 emissions, but you're not sure where to start. It can also be a helpful tool to help you improve your processes if you have already conducted your first GHG inventory.
Whether you're a high-growth tech company, a large industrial emitter, or a local business, this guide will provide a ton of value.
We at Breeze, a product of newOS Inc., are a team of people passionate about helping businesses contribute to GHG reductions and the reduction of environmental impact. We believe that the easier it is to measure your footprint, the more likely you are to know what to do about it.
This guide contains everything you need to familiarize yourself with the basics of carbon accounting, determine what data is relevant to your business, collect that data, and calculate your emissions. It is organized into the following 10 sections (click to jump to any section):
Section 1: Why measure carbon emissions?
Section 2: Essential steps to calculate your businesses carbon footprint (TL:DR)
Section 3: What are GHG emissions and why do they matter?
Section 4: Introduction to carbon accounting
Section 5: What you need to do to before collecting data
Section 6: How to collect activity data for your GHG inventory
Section 7: Maintaining GHG inventory quality and data validation steps
Section 8: Where to find emission factors, and how to pick the right ones
Section 9: How to calculate GHG emissions for your business
We hope you enjoy!
Whether you should measure your emissions yourself or hire a consultant will depend on your specific needs and resources. Here are a few factors to consider:
Expertise
If you are not familiar with emissions measurement and reporting, it may be helpful to hire a consultant, such as one of our partners, who has the necessary expertise and experience. A consultant can help you understand the various methods and standards for measuring and reporting emissions, and ensure that your calculations are accurate and reliable.
Time and resources
Measuring and reporting on your emissions can be a time-consuming process, particularly if you are a large organization with multiple facilities and complex operations. Hiring a consultant or using a carbon accounting platform like Breeze can help to free up time and resources within your organization so that you can focus on other priorities.
Cost
Hiring a consultant can be costly, especially if you are a small business with limited resources. If you have the necessary expertise and time to devote to measuring and reporting on your emissions in-house using a platform like Breeze, it may be more cost-effective to do so.
Ultimately, the decision to hire a consultant will depend on your specific needs and circumstances. It may be helpful to carefully consider your expertise, time and resources, and budget before deciding on the best approach for your organization.
Breeze is designed to make it easy for businesses of all sizes to accurately measure and track their emissions without the support of a consultant, and to generate high-quality reports that meet the latest standards and requirements.
With our platform, you can free up time and resources within your organization, and be confident that your emissions data is accurate and reliable. Plus, our platform is cost-effective and can help you save money by identifying opportunities for emissions reduction.
Section 1
Measuring carbon emissions is a smart move for businesses for a ton of reasons.
For one, it helps you figure out how much your company is contributing to climate change and find ways to reduce your environmental impact.
Not only is this good for the planet, it can also make your business look more attractive to customers who care about sustainability. Plus, cutting down on carbon emissions can save your business money by making you more energy efficient.
On top of all that, some countries have laws that require companies to report on their carbon emissions and try to reduce them.
Basically, measuring carbon emissions is a no-brainer for any business that wants to be more environmentally friendly, save some cash, and maybe even stay on the right side of the law.
There are several reasons why investors may care about the emissions of a company they invest in. These concerns are the reason that investors are beginning to request Environmental, Social, and Governance (ESG) disclosures, which include Greenhouse Gas (GHG) footprint data.
First, investors may be concerned about the potential financial risks associated with climate change. For example, if a company has high carbon emissions, it may be at risk of regulatory fines or other costs related to carbon pricing schemes or emission reduction targets. In addition, climate change could also lead to physical risks such as the destruction of assets due to extreme weather events, which could impact the company's financial performance. By measuring and reducing their carbon emissions, a company can mitigate these risks and potentially improve its financial stability.
Second, investors may also be motivated by ethical or environmental considerations. Many investors are increasingly considering environmental, social, and governance (ESG) factors when making investment decisions. By demonstrating their commitment to sustainability and reducing their carbon emissions, a company can potentially attract these types of investors and improve its reputation.
Finally, investors may also be influenced by the growing awareness and concern about climate change among the general public. As consumers become more aware of the environmental impacts of the products and services they buy, they may be more likely to choose companies with lower carbon emissions. This could lead to increased demand for low-carbon products and services, and in turn, improve the financial performance of companies that are able to meet this demand.
There are a wide range of sustainability reporting frameworks and standards to choose from. So many, that for some organizations making the right decision can be overwhelming.
Here are some of the most common frameworks, most of which are likely to become the go-to standards for GHG emissions reporting around the world:
IFRS ISSB
International investors with global investment portfolios are increasingly calling for high quality, transparent, reliable and comparable reporting by companies on climate and other environmental, social and governance (ESG) matters.
On 3 November 2021, the IFRS Foundation Trustees announced the creation of a new standard-setting board—the International Sustainability Standards Board (ISSB)—to help meet this demand.
The intention is for the ISSB to deliver a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ sustainability-related risks and opportunities to help them make informed decisions.
TCFD
Financial markets need clear, comprehensive, high-quality information on the impacts of climate change. This includes the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.
The Financial Stability Board created the Task Force on Climate-related Financial Disclosures (TCFD) to improve and increase reporting of climate-related financial information.
EU NFRD, SFDR & CSRD
he Non-Financial Reporting Directive (NFRD) is a comprehensive corporate reporting framework that requires large public-interest entities to disclose information about their environmental, societal, and governmental (ESG) impacts and risks. It is intended to help assess the sustainability of companies' activities and aligns with the EU Taxonomy, which defines environmentally sustainable activities.
The Corporate Sustainability Reporting Directive (CSRD) is an extension of the NFRD and expands its requirements to include all large companies, whether they are listed or not. This means that all large companies are publicly accountable for their impact on people and the environment and small and medium-sized Enterprises that have securities listed on regulated markets, except listed micro-enterprises. The CSRD is aligned with the EU Taxonomy which ensures that companies disclose their environmental performance information and their Taxonomy aligned economic activities.
The Sustainable Finance Disclosure Regulation (SFDR) is a law that applies to financial products and entities and aims to ensure that they disclose their sustainability-related information. The SFDR distinguishes disclosure requirements for financial products that claim to have ‘sustainable investment’ as their objective and those that claim to be promoting social or environmental characteristics. It is linked with the EU Taxonomy by including environmentally sustainable economic activities as defined by the Taxonomy Regulation in the definition of ‘sustainable investments’ in the SFDR.
Both B2B and B2C businesses can benefit from communicating their sustainability efforts to their customers. Here are a few reasons why:
Customer demand
Many consumers, particularly younger generations, are increasingly interested in supporting businesses that prioritize sustainability. By communicating your sustainability efforts, you can differentiate your business from competitors and potentially attract new customers.
Improved reputation
Demonstrating your commitment to sustainability can also improve your company's reputation, which can lead to increased customer loyalty and potentially drive more sales.
Cost savings
Implementing sustainability measures can often lead to cost savings, such as reduced energy costs. By communicating these efforts to your customers, you can demonstrate the value you are providing to them and potentially differentiate your business from competitors.
Legal and regulatory requirements
In some cases, businesses may be required to disclose information about their environmental impacts or sustainability efforts to customers, such as through mandatory sustainability reporting or labeling schemes.
Overall, communicating your sustainability efforts can help to build trust with customers and differentiate your business in a crowded market.
Measuring your company's carbon emissions and engaging your employees in sustainability efforts can be a powerful way to drive purpose and meaning within your organization. Here are a few reasons why:
Demonstrating your values
By taking action to reduce your carbon footprint and engage your employees in sustainability efforts, you can show your company's commitment to environmental responsibility and social impact. This can help to foster a sense of purpose and pride among your employees, and can also help to attract and retain top talent who value sustainability.
Improving engagement and productivity
Engaging your employees in sustainability efforts can also lead to increased engagement and productivity. Research has shown that employees who feel that their work has a positive impact are more likely to be motivated and productive. By providing opportunities for your employees to get involved in sustainability initiatives, you can create a sense of purpose and meaning that can drive better business outcomes.
Fostering innovation
Measuring your carbon emissions and engaging your employees in sustainability efforts can also encourage innovation. By challenging your employees to find new ways to reduce your company's environmental impact, you can foster a culture of continuous improvement and drive innovation.
Overall, measuring your carbon emissions and engaging your employees in sustainability efforts can be a powerful way to drive purpose, improve engagement and productivity, and foster innovation within your organization.
Government regulation can increase the need for carbon emissions calculation and disclosure in several ways.
In many countries around the world (including the US and EU) there are already mandatory climate disclosures for large companies, and disclosure requirements for all large and public businesses are likely to come within the next few years. Larger organizations will require emissions and other ESG data from their supply chains in order to comply with these requirements
These are a few of the main ways government regulation can increase the need for GHG accounting and disclosure:
Emission reduction targets
Governments may also set emission reduction targets as part of their efforts to combat climate change. In order to track progress towards these targets, businesses need to measure and report on their emissions.
Sustainability reporting
Governments may also require businesses to disclose information about their environmental impacts and sustainability efforts through mandatory sustainability reporting or labeling schemes. This may include information about carbon emissions and efforts to reduce them.
Carbon pricing schemes
Many governments around the world have implemented carbon pricing schemes, such as cap-and-trade systems or carbon taxes, to incentivize businesses to reduce their carbon emissions. In order to participate in these schemes, businesses often need to measure and report on their emissions to ensure compliance.
Overall, government regulation can increase the need for carbon emissions calculation and disclosure by creating a legal requirement for businesses to measure and report on their emissions in order to comply with carbon pricing schemes, emission reduction targets, or sustainability reporting requirements.
Section 2
If you're looking to calculate your business's carbon footprint, it's important to follow a few essential steps to ensure that your calculations are accurate and reliable. In this section, we'll provide a quick overview of the key steps involved in calculating your carbon footprint, so you can get started right away. Each of these steps is explained in significantly more detail below.
Section 3
GHG emissions, also known as greenhouse gas emissions, are gases that trap heat in the Earth's atmosphere and contribute to global warming.
These gases include carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O), and they come from things like burning fossil fuels, farming, and waste management.
GHG emissions matter because they cause climate change, which can lead to all sorts of problems like more extreme weather, droughts, and heatwaves. Reducing GHG emissions is super important for tackling climate change and protecting the planet.
Greenhouse gases (GHGs) like carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) are important because they trap heat in Earth's atmosphere and make life possible here. But when we burn fossil fuels and do other things that release these gases into the air, it traps extra heat and contributes to climate change. CO2 is the most well-known GHG, but it's not the only one – methane (CH4) and nitrous oxide (N2O) are also big contributors. And things like refrigerants, farming, and industrial processes can also release GHGs.
Fossil fuels like coal, oil, and gas are the biggest source of GHGs, responsible for about 75% of GHG emissions in North America. But deforestation and agriculture also release GHGs. When GHG levels in the atmosphere go up, it causes the planet to heat up. That can lead to more extreme weather, sea level rise, ocean acidification, and a lot of other problems.
To help reduce GHG emissions and slow down climate change, companies around the world are measuring and cutting back on their own emissions. By understanding how much GHGs your company is responsible for, you can figure out where to make changes and track your progress towards a low-carbon or no-carbon business model.
The Kyoto Protocol is an international treaty that was adopted in 1997 to address the problem of climate change. The Protocol sets binding targets for the reduction of greenhouse gas (GHG) emissions for countries that have ratified it. The six GHGs covered by the Protocol are:
Carbon dioxide (CO2)
CO2 is the most well-known GHG and is emitted through the burning of fossil fuels, deforestation, and other activities. It is the primary contributor to global warming and is responsible for the majority of GHG emissions.
Methane (CH4)
CH4 is a potent GHG that is emitted through the decomposition of organic matter in landfills, the production and transport of fossil fuels, and livestock farming. It has a warming effect that is 25 times greater than CO2 over a 100-year period.
Nitrous oxide (N2O)
N2O is emitted through the use of nitrogen-based fertilizers in agriculture, the burning of fossil fuels, and other activities. It has a warming effect that is 298 times greater than CO2 over a 100-year period.
Hydrofluorocarbons (HFCs)
HFCs are synthetic GHGs that are used as refrigerants and in other industrial processes. They have a warming effect that is thousands of times greater than CO2 over a 100-year period.
Perfluorocarbons (PFCs)
PFCs are synthetic GHGs that are used in the production of aluminum and other industrial processes. They have a warming effect that is thousands of times greater than CO2 over a 100-year period.
Sulfur hexafluoride (SF6)
SF6 is a synthetic GHG that is used in the electrical industry as an insulating gas. It has a warming effect that is 23,500 times greater than CO2 over a 100-year period.
These six GHGs are considered the most important because they are the primary contributors to global warming and climate change. Reducing emissions of these GHGs is essential for mitigating the impacts of climate change and protecting the planet.
CO2, CH4, and N2O are the most relevant GHGs for businesses because they are the most commonly emitted gases from combustion of fossil fuels and are the primary gases measured in GHG inventories. These gases are emitted through a range of activities that are relevant to businesses, such as the burning of fossil fuels for energy, industrial processes, and transportation.
Measuring and reducing emissions of CO2, CH4, and N2O is therefore critical for businesses that want to understand and reduce their environmental impact and mitigate the risks associated with climate change. Many companies are now setting GHG reduction targets and implementing strategies to reduce their emissions of these gases in order to meet these targets.
In addition, CO2, CH4, and N2O are also the GHGs that are most commonly regulated under carbon pricing schemes and emission reduction targets, which means that businesses may be required to measure and report on their emissions of these gases in order to comply with these regulations.
There are many common business activities that emit greenhouse gases (GHGs). Some examples include:
Energy use
The burning of fossil fuels such as gasoline, oil, and gas for energy is a major source of GHG emissions. Businesses that rely on fossil fuels for energy, such as manufacturing and transportation companies, are likely to have significant GHG emissions.
Industrial processes
Many industrial processes, such as the production of cement, steel, and chemicals, emit GHGs as a byproduct.
Agriculture
Agricultural activities such as livestock farming and the use of nitrogen-based fertilizers can also emit GHGs, including methane (CH4) and nitrous oxide (N2O).
Waste management
Landfills and waste treatment facilities can emit GHGs, particularly CH4, as organic waste decomposes.
Transportation
Transportation is another significant source of GHG emissions, particularly for businesses that rely on shipping and air travel.
There are many different business activities that can contribute to GHG emissions, and the specific activities that are most relevant will depend on the industry and operations of the business.
Every company's emissions matter because they contribute to the overall levels of GHGs in the atmosphere, which drives climate change.
While it is true that the emissions of a single company may seem small in the grand scheme of things, it is important to recognize that the combined emissions of all businesses, as well as households and other sectors, add up to a significant portion of global GHG emissions.
Therefore, reducing the emissions of every company, including small ones, can help to mitigate the impacts of climate change and protect the planet.
Overall, every company's emissions matter because they contribute to the global problem of climate change and because taking action to reduce emissions can have financial and reputational benefits for the company.
Section 4
Carbon accounting is the process of tracking and measuring an organization's GHG emissions. It involves identifying the sources of GHG emissions within an organization and calculating the total amount of GHGs emitted over a specific period of time - usually one calendar or fiscal year.
Carbon accounting is important because it helps businesses to understand and quantify their GHG emissions, which can be a key step in reducing them. By understanding where GHG emissions are coming from, businesses can identify opportunities to reduce their emissions and set targets for reducing them.
But who makes the rules of carbon accounting? That is where the GHG Protocol comes in.
The GHG Protocol is the result of a 20-year partnership between World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
In their words, “The GHG Protocol establishes comprehensive global standardized frameworks to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains and mitigation actions.”
They supply the world's most widely used greenhouse gas accounting standards. The Corporate Accounting and Reporting Standard provides the accounting platform for virtually every corporate GHG reporting program in the world.
Learn more about the organization and the reporting standards here.
One of the foundational concepts of GHG accounting, and sustainability in general, is the principle of Materiality.
Materiality is a concept that defines why and how certain issues are important for a company or a business sector. A material issue can have a major impact on the financial, economic, reputational, and legal aspects of a company, as well as on the system of internal and external stakeholders of that company.
According to the GHG Protocol, information is considered to be material if, by its inclusion or exclusion, it can be seen to influence any decisions or actions taken by users of it (e.g. strategic decisions from executive leadership or investment decisions from investors).
A material discrepancy is an error (for example, from an oversight, omission or miscalculation) that results in a reported quantity or statement being significantly different to the true value or meaning.
As a rule of thumb, an error is considered to be materially misleading if its value exceeds 5% of the total inventory for the part of the organization being verified.
In the process of conducting a GHG Inventory, it is always important to consider materiality to ensure you cover all relevant sources of emissions - it can also save you a lot of time. But there are other principles in carbon accounting as well.
RelevanceEnsure the GHG inventory appropriately reflects the GHG emissions of the company and serves the decision-making needs of users – both internal and external to the company.
Completeness
Account for and report on all GHG emission sources and activities within the chosen inventory boundary. Disclose and justify any specific exclusions.
Consistency
Use consistent methodologies to allow for meaningful comparisons of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series
Transparency
Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.
Accuracy
Ensure that the quantification of GHG emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable assurance as to the integrity of the reported information.
All carbon emissions calculations are based on a single essential formula composed of two components.
All carbon emission calculations rely on the same basic components: Activity (or usage) Data and Emission Factors.
Activity Data
Actual or estimated data points on volume of fuels consumed, amount of energy purchased, distance traveled, etc.
Emission Factors
Simple factors that quantify the amount of CO2 equivalent released per unit of an activity. These are generally measured and published by governments, scientific non-profits, or utility providers. For example, in Ontario (2022), 28g of CO2e is emitted per kWh of electricity purchased.
The product of these two values is the mass of greenhouse gas that has been emitted from the activity in question, usually measured in kilograms (kg) or tonnes (MT) of CO2-equivalent, or CO2e.
GHG emissions are classified into three scopes, as defined by the GHG Protocol.
Emissions are classified into these three scopes because it allows you to identify and track your greenhouse gas emissions from different sources, which is important for understanding the impact of your operations and for setting reduction targets.
Scope 1 emissions refer to direct greenhouse gas emissions from sources that are owned or controlled by the organization, such as fuel combustion in boilers or vehicles.
Scope 2 emissions refer to indirect emissions from the generation of purchased electricity, heat, or steam.
Scope 3 emissions refer to all other indirect emissions that occur in the value chain of the organization, such as the extraction and production of purchased materials and waste disposal.
Scope 1 and 2 emissions are considered to be under the direct control of the organization and can be targeted through efficiency improvements and the use of renewable energy. Scope 3 emissions are typically more challenging to address as they are outside of the direct control of the organization, but they can still be influenced through supply chain management and the use of sustainable products and services.
By understanding the breakdown of your emissions across these three scopes, you can prioritize and design effective strategies for reducing your overall emissions.
CO2 equivalent, or CO2e, is a measure of the global warming potential of different greenhouse gases (GHGs). It is used to compare the emissions of different GHGs on an equal footing, based on their relative warming effect.
To calculate CO2e, the emissions of a particular GHG are multiplied by its global warming potential (GWP), which is a measure of how much the gas contributes to global warming compared to CO2. The resulting CO2e value represents the equivalent amount of CO2 that would have the same warming effect as the GHG in question.
CO2e is often used in the context of GHG emissions reporting and carbon accounting, as it allows businesses and other organizations to compare and track the warming effect of their GHG emissions across different gases. It is also used in the design of carbon pricing schemes and other policy tools that aim to reduce GHG emissions.
Carbon accounting tools like Breeze will automatically calculate the emissions of various GHGs and convert the resulting emissions into units of CO2e for ease of reporting and comparability.
There are two calculation methods for scope 2 emissions outlined by the GHG protocol. These only apply to scope 2 purchased energy. You may need to calculate your emissions using both of these methods, depending on where you are reporting them.
The location-based method uses emission factors that are based on a regional average of the grid mix. These do not vary based on the utility you purchase energy from, or any RECs, GOs, or PPAs you may purchase.
The market-based method, on the other hand, uses the most specific emission factor available - the best case being an emission factor provided by your utility directly. Market-based emissions are generally required in countries or regions with regulations such as cap-and-trade or certifications for renewable energy such as RECs and GOs. If you purchase a renewable energy certificate (REC), you can apply a lower emission factor to the certified energy (often zero) which in turn reduces your scope 2 emissions. Correspondingly, if you do not purchase certified renewable energy, you must apply a residual mix emission factor, which is often higher than the location-based factor because it does excludes any renewable energy sold as RECs or GOs.
In general, location-based emissions are easier to measure and track than market-based emissions, but both types of emissions are important for understanding and reducing your true impact. By tracking both location-based and market-based emissions, organizations can get a more comprehensive understanding of their GHG emissions and identify opportunities for reduction.
Section 5
Now you know the background and basics of emissions calculations. However, before you can begin collecting data and performing the calculations you need to do a little groundwork to ensure you will have a complete and accurate carbon footprint that will be consistent over time.
In carbon accounting, setting boundaries refers to the process of defining the scope and coverage of an organization's GHG (greenhouse gas) emissions inventory. This involves identifying the sources of GHG emissions within the organization, as well as the activities, products, and services that are included in the inventory.
Setting boundaries is an important step in carbon accounting because it helps to ensure that the organization's GHG emissions inventory is comprehensive and accurate. It is also important for establishing the baseline for GHG reduction efforts and tracking progress over time.
There are two types of boundaries every organization must set, and several different approaches to setting boundaries in carbon accounting. The specific approach that is used will depend on the goals and needs of the organization.
In carbon accounting, the organizational boundary defines which facilities, or places, are relevant to your carbon footprint.
Organizational boundaries are important in carbon accounting because they help to ensure that the organization's GHG emissions inventory is comprehensive.
Overall, setting clear organizational boundaries in carbon accounting is essential for accurately tracking and reducing GHG emissions.
There are three main approaches used in setting organizational boundaries:
Operational Control
This is the most commonly used and simple to understand boundary approach. Except in rare circumstances, we recommend all companies use the operational control method of setting organizational boundaries.
Basically, if a company or one of its subsidiaries has the authority to make and implement operating policies at a particular operation, it has operational control over that operation. This is often the case when a company or its subsidiary is the operator of a facility – they'll have the power to make and implement policies there. This criterion is used by many companies when reporting on emissions from facilities they operate.
It's pretty rare for a company or subsidiary not to have operational control if they're the operator of a facility.
Financial Control
If a company has the power to make financial and operating decisions for another company in order to make money from that company's activities, it has financial control over the operation. This means that the company has the ability to direct the policies of the other company to get economic benefits. It's all about who has the power to make money-making decisions and who stands to gain from those decisions.
Equity Share
With the equity share approach, a company tracks its GHG (greenhouse gas) emissions based on how much of a stake it has in an operation.This makes sense because the company's share of equity reflects its economic interest in the operation – basically, how much control it has over the risks and rewards. So if a company has a big stake in an operation, it makes sense that it would be responsible for a bigger share of the GHG emissions. This is just one way to account for GHG emissions, but it's a pretty straightforward and fair way to do it.
As opposed to organizational boundaries, which define which sites and assets are included in your GHG inventory, operational boundaries define which activities will be included in your GHG inventory and how they will be classified.
Carbon emissions are separated into scopes 1, 2, and 3 in order to provide a consistent and standardized way of measuring and reporting GHG (greenhouse gas) emissions. This also helps ensure that GHG inventories reflect the impact of specific activities and, more importantly, the ability companies have to reduce the emissions they take responsibility for.
Scope 1 emissions are direct GHG emissions that are under the control of the organization, such as emissions from company-owned vehicles and on-site energy generation. An oversimplified explanation for scope 1 emissions would be emissions from anything you burn at sites you control.
Scope 2 emissions are indirect GHG emissions that result from the consumption of purchased electricity, heat, or steam. A simple rule for remembering which emissions are scope 2 is that it includes any energy you buy.
Scope 3 emissions are all other indirect GHG emissions that are not included in Scope 1 or Scope 2, such as emissions from the production of raw materials, transportation of goods, and disposal of waste. This the "everything else" category, and as such it is the most complex to map and measure scope 3 emissions.
Separating emissions into these three scopes allows organizations to track and report on the GHG emissions from different sources and activities, which can be useful for understanding the organization's carbon footprint and identifying opportunities for reduction. It also allows organizations to compare their GHG emissions to those of other organizations and benchmark their performance.
To set operational boundaries, you should review your operations and supply chain, determine which of the main categories of emissions are relevant to your organization, and justify why. It is also important to note any exclusions, whether because you don't have those activities in your operations or because you are unable to collect adequate data.
Once you've determined where you will be tracking data (organizational boundary) and which emissions sources are relevant to your organization (operational boundary), it is worthwhile to quickly go through a mapping exercise.
Mapping is the process of determining which sources are in use at which sites. This allows you to make sure you are collecting all the data you need each time you do the inventory. If applicable, it is best to do this exercise with site managers because they will know best what is in use on their sites.
By the end of the mapping exercise you should know all of the fuel and energy sources in use at each of your sites, and as a result you should have the first data collection sheet!
If you plan to use a carbon accounting tool like Breeze, mapping reports can be generated automatically based on the data uploaded in the previous period.
Organizational and Operational boundaries, among other important details about your GHG inventory process, are generally included in an Inventory Management Plan, or IMP.
The purpose of an IMP is to ensure that the organization's GHG emissions inventory is accurate, complete, and consistent over time.
An IMP typically includes information on the scope and coverage of the emissions inventory, the data sources that will be used to gather emissions data, the methods and tools that will be used to calculate emissions, and the quality assurance and quality control measures that will be applied to ensure the accuracy and reliability of the data. It may also include details on how the organization will communicate its GHG emissions data to stakeholders, such as employees, shareholders, and regulators.
An IMP is an important tool for managing and improving an organization's GHG emissions inventory over time. It helps to ensure that the inventory is reliable and can be used to track the organization's progress towards reducing its GHG emissions and meeting its sustainability goals.
We provide all Breeze customers with a simple, straightforward GHG Inventory Boundary template so you can be sure you have checked all the boxes before jumping into data collection.
Click the button below to get access to the template and populate your own data!
Download the Free GHG Inventory Boundary Template
This template includes placeholders and guidance for setting your Organizational and Operational boundaries.
Get the template
Section 6
Collecting data for use in the calculation of your carbon footprint is generally the most time-intensive part of carbon accounting. This is because for most organizations this involves reaching out directly to site managers, utility providers, landlords and building managers, and accounting teams, at the very least. Why? Because these are the people who have access to the data you need.
It is becoming increasingly common for vendors to provide emissions data directly to customers based on the products and services used. Some good examples are Google Cloud and Apple products. Where available, supplier-provided emissions data is the highest quality data and should be included in your GHG inventory as published.
The remaining data used in calculating emissions falls into two main categories: actual and estimated.
Actuals, as implied, are the actual usage quantities of fuels, purchased electricity, and other sources of emissions. This data is generally extracted from invoices or online portals and can be used to calculate emissions with simple, reliable emission factors.
Estimations are usage quantities that are not based on actual consumption but are calculated using educated guesses, audits, or proxies. For example, calculating the electricity consumed in an office based on the square footage and an average consumption per square foot in that region. While estimating often does provide a reasonable backup for calculations where actuals are not available, you should always work to improve the quality of data over time and eliminate estimations wherever possible.
Collecting scope 1 and 2 data is generally easier than collecting scope 3 data. Here are the most common scope 1 categories and some common ways to collect the data.
Office Heating (Scope 1)
Most buildings are heated with either electricity or natural gas. If your building uses natural gas, it should be included in the scope 1 emissions of your carbon footprint.
If you pay for your natural gas, the consumption value [in units of volume (e.g. m3) or energy (e.g. kWh)] will be on the invoices. If utilities are managed by the building, request utility information from your landlord or building manager
Fuel From Company Vehicles (Scope 1)
If your company owns or leases vehicles for its employees these may be relevant to the scope 1 emissions of your carbon footprint.
Fuel usage values are generally included on invoices from suppliers and on receipts from fuel stations.
Office Electricity (Scope 2)
Office electricity consumption is included in the scope 2 emissions of your carbon footprint.
If you pay for your electricity, the consumption value [in units of energy (e.g. kWh)] will be on the invoices. If utilities are managed by the building, request utility information from your landlord or building manager.
Scope 3 data can in many cases be more complicated to collect and trust than scope 1 and 2 data. In many categories, the only way to determine usage quantities is to estimate using your best guess or using economic activity data (i.e. amount of money spent per category).
Below are some common scope 3 categories and recommendations on how to collect data for them.
Category 1: Purchased goods and services
Category 2: Capital goods
Category 8: Upstream Leased Assets
Category 5: Waste
Category 6: Business travel
Category 7: Employee commuting (including work-from-home)
If you use an emissions source on a site but are unable to collect actual data, you should estimate your consumption to fill the gap.
While there are no comprehensive guides to estimating data across each scope and category, we have provided several guidelines and examples to help you perform these calculations.
These are a few basic principles to follow when estimating activity data for your GHG inventory:
If estimation is necessary for your inventory, you should try to improve the quality of your estimations over time. Here are some ways to do that:
Estimating to fill scope 1 and 2 gaps can be done using the following best-practices based on the GHG Protocol.
Mobile Combustion
To estimate emissions from mobile fuels without access to primary consumption data, we recommend collecting as much information as possible on distance travelled, vehicle type, fuel used, and if possible, spend data. Consumption can be estimated in a variety of ways depending on the available data. E.g. if only spend data is available, determine the average price per unit of fuel and divide the spend data by that value to determine the total volume used. State the estimation methodology in the document you use to calculate them.
Stationary Combustion
For natural gas emissions, estimations can be performed using facility square footage and building type combined with a US Department of Energy (CBECS) estimation factor (Source, table c24).
For other stationary emissions, follow a similar procedure to that recommended for Mobile Combustion.
Purchased Energy
For purchased electricity emissions, estimations can be performed using facility square footage and building type combined with a US DOE estimation factor (Source, table c14).
Fugitive Emissions
We recommend using the US EPA “Screening Method” which determines annual leakage of refrigerant gases based on the gas, the total storage capacity, and the annual leakage rate of the given equipment type (Source).
When estimating any type of data, including scope 3, there are two main methods:
Use trusted estimation factors
Estimate using other methods
There are also trusted scope 3 category calculation tools and methodologies that can make your life easier, including these ones:
When preparing your activity data for calculation, there are only a few essential values you need for each data point.
These should be all you retain in your final upload document (if you are using Breeze) or your final calculation spreadsheet (if you are doing your calculations manually.
The columns you need are:
A few additional points to note:
If you are creating your first list of data points, you can use this template to jumpstart the process.
It contains all the required columns, as well as some additional columns to help you organize your data.
Get started with this free template now!
Get the Free Carbon Accounting Data Template
If you are creating your first list of data points, you can use this template to jumpstart the process. It contains all the required columns, as well as some additional columns to help you organize your data.
Get the Template
Section 7
Getting good quality data is usually the biggest challenge when it comes to tracking a company's GHG (greenhouse gas) emissions. That's why it's super important to set up strong data collection processes when you're designing your company's GHG inventory program.
By focusing on collecting high quality data, and validating it regularly, you'll be able to get a more accurate picture of your GHG emissions and use that information to make better decisions about how to reduce them.
It's definitely worth the effort to get this right!
It's important to develop data collection procedures that allow the same data to be efficiently collected in future years. These procedures are often outlined in the inventory management plan, or IMP.
There are several key considerations when developing data collection procedures that will allow the same data to be efficiently collected in future years:
By following these steps, you can develop data collection procedures that allow the same data to be efficiently collected in future years, which is essential for tracking progress and making informed decisions about GHG emissions reduction.
There are several steps that companies can take to validate and ensure the quality and reliability of activity data for GHG (greenhouse gas) calculations:
By following the above steps, you can be confident that you have completely validated your data and can move forward to calculation.
However, if you want to go step by step through each of the QC validations we use in our consulting projects, you can download this QA/QC checklist.
It is divided into pre-calculation and post-calculation validations, so you can be sure you have a complete and accurate inventory!
Get Your Free activity data QA/QC checklist
Get this template for performing detailed QA/QC on your GHG emissions data.
Get Your Template
Section 8
Emission factors are basically numbers that tell you how much of a particular greenhouse gas (GHG) is produced by a certain activity or process. For example, an emission factor might tell you how much CO2 is produced when you burn a gallon of gasoline, or how much methane is produced by a single cow per year.
Emission factors are important because they help us understand and track GHG emissions from different sources. By using emission factors, we can estimate how much GHG is being produced by different activities and processes, which is crucial for understanding our overall GHG emissions and figuring out how to reduce them.
Emission factors can be based on a variety of things, like the type of fuel being burned, the efficiency of a process, or the type of animal or plant being grown. They're usually expressed in terms of the amount of GHG produced per unit of something else, like per gallon of gasoline burned or per flight.
Overall, emission factors are a really useful tool for understanding and tracking GHG emissions, and they're an important part of carbon accounting and GHG reporting.
However, knowing where to look for the right emission factors that you can trust, and selecting the right ones for the specific activity you're measuring, can be difficult at the best of times.
In Breeze, we use AI to recommend the best emission factor for your source based on our library of templates and trusted emission factors. Even so, it is useful to be familiar with the common publishing authorities and principles of selection so you can be sure you're making the right decision.
The best-practices for emission factor selection vary based on the activity, the scope, and the calculation method - whether location- or market-based.
Scope 1 Emission Factors
Emission factor selection for scope 1 data is fairly straightforward. The objective is to find the emission factor that best represents the activity in question (e.g. natural gas for heating) and apply it consistently. Unless there is a specific reason not to, you should use the same scope 1 emission factor across your entire inventory for the same fuel. You should use the most recently available emission factor available from a trusted source.
Scope 2 - Location-Based Emission Factors
When selecting a scope 2 emission factor for location-based calculations, it is best to find emission factors from a trusted authority and apply the most recently available factor.
Scope 2 - Market-Based Emission Factors
Selecting market-based emission factors for purchased energy can be a challenge because the best emission factors are utility-specific, however most utilities do not publish emission factors. In the absence of a utility-specific emission factor, you should use the best available residual-mix emission factor available for your region from a trusted authority. If there is no utility specific emission factor and no residual mix emission factor available, you should use the same emission factor as you would use for the location-based emissions.
Scope 3 Emission Factors
Finding the right scope 3 emission factors can be challenging. Wherever possible, you should request specific emission factors from suppliers and vendors of goods and services you purchase. If those are unavailable, follow the same principles as you would for scope 1 emission factors. Seek the emission factor that best represents the activity you are measuring, from a trusted publishing authority, and use the most up-to-date emission factor possible.
There are several factors that can help you determine whether you can trust an emission factor publishing authority:
Reputation
Look for emission factor publishing authorities that have a good reputation and are widely recognized as reliable sources of information.
Transparency
Look for emission factor publishing authorities that are transparent about their methods and sources of data, and that make their data and assumptions available for review.
Peer review
Consider whether the emission factors published by the authority have been subject to peer review, which is a process by which other experts in the field review and validate the data and methods used.
Consistency
Check to see if the emission factors published by the authority are consistent with other sources of similar emission factors, and if they are consistent over time, if possible.
By considering these factors, you can get a sense of whether an emission factor publishing authority is reliable and trustworthy. It's important to use high quality, reliable emission factors in order to ensure that your GHG (greenhouse gas) emissions calculations are accurate.
Here are some of the most popular, reliable, trusted sources of emission factors available for free. You will find these emission factors used in the vast majority of corporate GHG inventories globally.
UK DEFRA (Department for Environment Food and Rural Affairs)
Access them here
DEFRA is the go-to emission factor authority for many organizations and carbon accounting platforms - especially those outside the USA. They publish regularly, they are easy to navigate and understand, and are highly reliable emission factors.
US EPA (Environmental Protection Agency)
Access them here
The US EPA provides a range of useful emission factors, including the best set of emission factors for US grid electricity. They are published regularly and are another highly trusted source for emission factors.
Environment and Climate Change Canada (ECCC) National Inventory Report (NIR)
Access them here
In Canada, the ECCC publishes emissions reports and tables regularly as part of their submission to the United Nations Framework Convention on Climate Change (UNFCCC). They provide electricity for each province, as well as emission factors for a variety of other common and uncommon fuels and industries.
Australia's Department of Climate Change, Energy, the Environment and Water (DCCEEW)
Access them here
Australia publishes local energy emission factors, among others, via the DCCEEW's National Greenhouse Accounts Factors.
New Zealand Department of Environment (DOE)
Access them here
The New Zealand Department of Environment regularly publishes a very simple set of emission factors for fuels, local energy use, and a variety of other scope 1 and 3 categories.
Greenhouse Gas Protocol - Global Warming Potential (GWP) Values
Access them here
The GHG Protocol published a summary of the GWPs of various greenhouse gases. These GWPs can be used to convert the various gases into units of CO2e.
Bonus: Climatiq Data Explorer
Access it here
While Climatiq is not a publishing authority, they provide a simple, easy to use, comprehensive emission factor database that can be used to find emission factors for uncommon activities.
These are some of the most commonly used emission factor sources, but this list is not complete. Every day, more countries and non-governmental organizations publish high-quality emission factors for specific regions and activities. Be sure to check with your local governments and environmental organizations for the most up-to-date information!
All of these authorities publish high quality, trusted emission factors, and they are all included in every Breeze plan.
Section 9
Once you have followed the steps above - set your boundaries, collected data, and selected emission factors - you are ready to calculate your emissions.
At Breeze, we recommend you do this in the platform. Simply upload your spreadsheet and the calculations will be done automatically in alignment with the GHG Protocol.
However, if you would like to do these calculations yourself, below are the steps to follow.
The easiest way to convert activity data into carbon emissions values is by using Breeze.
If you don't already have an account
To calculate your carbon emissions in Breeze, follow these steps:
If you already have an account
👍 Create your free Breeze account
Starting with the activity data spreadsheet you created in Section 7, with each data point on one line, follow these steps:
Once you have done this for each of your data points, you can add the emissions values together to arrive at your final emissions for the period! It is common practice to sum and report the total emissions for each scope, as well as the grand total.
The steps for Google Sheets are very similar to the steps above in Excel.
Starting with the activity data spreadsheet you created in Section 7, with each data point on one line, follow these steps:
Once you have done this for each of your data points, you can add the emissions values together to arrive at your final emissions for the period! It is common practice to sum and report the total emissions for each scope, as well as the grand total.
Section 10
By taking these steps, you can take meaningful action to reduce your organization's GHG emissions and help mitigate the impacts of climate change.Schedule a demo of Breeze 🎙If you are not already using Breeze, consider thanking us for this guide by scheduling a demo of our carbon accounting platform or just go ahead and create an account! We promise it's easier than doing this all manually.
Breeze brings together everything you need—your team, your activity data, emission factors, unit conversion factors, and more—so you can understand and reduce your carbon emissions. Wherever you operate, whatever your industry, whatever your size. Stop spending time trying to count your emissions. Focus on making meaningful change.