🪴 Maixnor WU

Accounting for GHG Emissions

Nov 04, 20253 min read

Why is it important?

  • climate scientist underestimate recent warming effects
  • extreme weather anomalies reaching higher than ever before
  • Austria
    • average temperature deviation rising
      • +2.6 degrees on average, more in cities than in mountains

ESRS

GHG Protocol Standards

Corporate vs Product Carbon Footprint

  • product carbon footprint
    • technically hard to calculate
  • 2 different perspectives on the same emissions
    • e.g. apple, emissions of the whole company vs emissions per iPhone produced
    • not double-counting, since it is the same emissions, but different perspective
      • one could also argue everything is double counted…

Generally Accepted GHG Accounting Principles

  • relevance
    • report must reflect the actual emissions
  • completeness
    • include all emissions
  • consistency
    • consistency over time to allow for easy comparison
  • transparency
    • data sources
    • assumptions
    • calculations
  • accuracy
    • everything is an estimation
    • but the goal is to remove uncertainties and not over/underrepresent emissions

GHG Accounting Process Steps

  • get data
  • decide on boundaries and calculation schemes
    • also dependent on data available
    • boundaries for organization and for operations
      • scopes 1, 2, 3
  • analyse data and calculate GHG Emissions
  • stick to it and report correctly

Setting Organizational Boundaries

  • equity share approach
  • control approach
    • if there is operational control the emissions of the controlled entity are 100% of the controlling entity

Scope 1 Emissions

  • identify sources
    • stationary/mobile combustion, fugitive emissions, process emissions
  • select calculation approach
    • direct measurement, stoichiometric calculations, estimates
  • collect data and choose emissions factors
    • mostly emission data is written on the invoice
    • just not integrated yet in the ERP system of most companies
      • would allow for integrated calculations
    • data levels
      • primary: consumption in liters of fuel
      • secondary: mileage of car
      • tertiary: amount spent on fuel
  • apply calculation tool
    • convert all emissions to CO2eq
  • roll-up data to corporate level

Scope 2 Emissions

  • identify sources
    • electricity, steam, heat, cooling
  • select calculation approach
    • market based vs location based approach
      • location … geographic location
      • market … contracts, purposeful decision
  • collect data and choose emissions factors
    • metered electricity, utility bills
    • consumption in kWh
    • emissions per kWh from different energy providers
  • apply calculation tools
    • convert all emissions into CO2eq
  • roll-up data to corporate level

Scope 3 Emissions

  • GHG Protocol
  • screening
    • based on all 15 categories of GHG Protocol
    • identify significant categories based on estimated emissions
  • calculation
    • calculate and estimate as best as possible
  • update
    • update scope 3 every year
    • full inventory (scope 1 and 2 too) only every 3 years
      • or when significant change
  • not include
    • emission offsetting / emission trading → transparency
    • reflect actual emissions

Process

  • describe the value chain
  • data collection and initial assessment
    • supplier data
      • on invoice of supplier
    • hybrid data
    • average data (secondary process data)
      • e.g. aggregate miles of flights booked
    • spend-based data (tertiary accounting data)
      • e.g. aggregate of cost of flights booked
  • materaility and screening → Materiality Assesment
  • selection of relevant categories
    • based on data collected
  • selection of calculation methods and calculation
    • depends on data available
      • supplier-specific method
        • aggregate of all suppliers
      • hybrid method
        • aggregate of supplier data you have, extrapolate for the rest
      • average data method
        • take average of emissions per unit consumed you have, multiply by consumption
      • spend-base method
        • take average of emissions per expenses you have, multiply by expenses
  • results and interpretation

Neutrality vs Net Zero

Climate Transition Plan

  • compatibility with paris agreement
  • decarbonization levers
    • emission reduction
  • quantification of investments
    • climate change mitigation actions
  • locked-in GHG Emissions
    • e.g. a new plant has been built 5 years ago which is running on gas-generators
      • that plant will not be touched in the next 20 years probably
  • taxonomy regulation
    • plans on reaching higher alignment
  • business strategy

SBTi

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