March 27, 2022

Reporting

GHG Reporting: Everything You Need to Know

GHG Reporting: Everything You Need to Know
Contents

The World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) created the Greenhouse Gas Protocol (GHGP) as a reliable international standard for businesses to measure their emissions. 

Organizations have to act now to decrease and bring their GHG emissions to zero in the next few years if we have any chance of keeping global warming under a 1.5C increase compared to pre-industrial levels. Additionally, we can try to exceed the standards that local governments have pledged to further care for the environment. Businesses will eventually be accountable to act in accordance with the regulations that governments decide upon later. The GHGP is a guide that enables us to achieve net zero together.

If you aim to eliminate carbon emissions, then this is for you. In this article we'll highlight some of the GHG reporting points to explain the regulations and how Net0 abides by all of the standards so you don't have to worry about calculations, tools, and unclear regulations when reporting your emissions. 

Scope Emissions

To explain scope 1, 2, and 3 emissions briefly, scope 1 accounts for owned and controlled emissions by the reporting company, scope 2 accounts for purchased electricity used by said company, and scope 3 are anything else in the value chain. 

Scope 1 and 2 emissions reporting is always necessary under the GHGP's standards. For example, indirect emissions from purchased electricity can easily be counted for with proper utility bills. Some regions enable companies to report their emissions in a public GHGP database. Other companies choose to communicate their emissions reporting in a different way. This builds rapport as a carbon-reduced business which is increasingly important every year to consumers and investors. 

Scope 3 value chain emissions include upstream (indirect GHG emissions from purchased services and goods) and downstream emissions (indirect GHG emissions from sold goods and services). There are 15 categories of these emissions between up and downstream. 

value chain emissions flow chart scope 123

GHGP Corporate Standard

The GHGP Corporate Accounting and Reporting Standard is the most commonly used guide. Net0 adheres to all of the GHGP and localized standards so you will never need external tools. It is also an agile platform, adapting to changing regulations so you know the data you provide will always be counted for and offset with trusted, verified partners. 

Voluntary trading

The business goals highlighted in the GHGP confirm that voluntary trading in carbon markets is an important part of the reduction strategy. It is not sufficient that companies just reduce what they are using today. They must capture and attempt to remove the damage already done in the atmosphere. Involving themselves in cap and trade programs and limiting carbon credits every year, will serve as capital to fund the necessary renewable projects we need to switch over to all while undoing the harm already done. In this way, it is not just permitting the use of more fossil fuels but offsetting while creating something that is going to stick and be a long term investment. Something that we really need entering the next decade as things progress in the climate change area, and nations start implementing the policies they have been pledging for so long. 

Double counting

Climate Focus defines double counting as, "In the context of climate change mitigation, double counting is widely used to describe situations where a single greenhouse gas emission reduction or removal is used more than once to demonstrate compliance with mitigation targets."

Within the value chain, contracts can be set up between the entities to take responsibility or joint responsibility for different parts of the supply chain emissions to avoid double counting the reductions. The GHGP offers specific advice for financial departments in these matters.

Inventory program framework

The GHGP also advises on an inventory protocol with various approaches which you can find in detail in the corporate standard so reductions from a procurement standpoint can be made in the beginning. It includes estimations through scientific data and can be discussed internally between relevant members of your team to plan a suitable blueprint for you. Quantified uncertainty estimates can be tracked over time as comparisons, so changes can be made between sources, which helps as a guide to inventory management.

The point is to create feedback for analyses, qualitatively understand the causes to improve processes for inventory quality, collect information needed for relevant statistics, and provide valuable information to improve methodologies.

Setting targets

It's important to add measurable targets to be able to achieve your net zero goals over time. Although it is important to quicken the journey, companies need to strategize for realistic reductions and additions, such as renewables, and this is done with time. Since Net0 measures the emissions for you, you can now set achievable targets. This can't be done without having proper measurements of what is already being emitted.

The objective in setting your target is that every year your emissions should be lower. This will mean that proper reduction strategies have been utilized and that they are working. Making reasonable and effective decreases to CO2 emissions, adding alternatives every year, and offsetting are all necessary parts of the net zero journey according to the GHGP. 

Here are the 10 steps involved in setting targets to summarize the corporate standard:

  1. Obtain senior management commitment - you can't achieve your goals without the support of the hierarchy. 
  2. Decide on the target type - absolute (reduce absolute emissions over time) or intensity based (reduce the ratio of emissions relative to a business metric over time) which you can discuss with your team internally. Net0 does all of the calculations in its intuitive system and makes it a reliable guide to achieve your targets.
  3. Decide on a target boundary - decide on the GHGs in the boundary, geographics like country or regions included, sources, and activities within the boundary. 
  4. Choose the target base year - a fixed base year (an actual GHGP example is: reduce CO2 emissions 25 percent below 1994 levels by 2010). You can also use a multi year average. The other option is a rolling target base year (which is defined as, according to the GHGP, the base year rolls forward at regular time intervals, usually one year, so that emissions are always compared against the previous year). You can do this with the Net0 simulator tool and simulate a chart by date that shows what your emissions will look like later when reduced by certain sources.
  5. Define the target completion date - this is based on how quickly a company can realistically decrease emissions to zero. 
  6. Define the length of commitment period - for how many years the company will commit to reducing carbon to zero, which will inevitably have to be achieved anyways.
  7. Decide on carbon offsets or credits - the offsets are needed per the GHGP to offset the damage that has already been done to the atmosphere so they request you offset more than you have emitted in the reporting year. Moreover, offsets are needed for any of the emissions that you presently can't avoid. Purchasing offsets like wind power project contributions as an example, will fund that renewable project that we will be able to enjoy as an alternative energy source when it is completed. It's a win-win. It is not an excuse to emit more CO2.
  8. Establish a target double counting policy - avoid counting an offset more than once in your value chain as stated in the double counting section above.
  9. Decide on the target level - this will include taking into account all of the previous steps to set the correct level for you.
  10. Track and report carbon reduction progress - check the performance of your strategy. It will ensure you are successfully decreasing your emissions. It will also help you re-evaluate the next steps in an agile race to net zero. You can modify your steps when necessary for a robust and profitable future that will help the environment and keep you and your staff in business. All of these can be achieved through using Net0's emission management platform.
Related content

If you want to learn more about reporting your carbon emissions, please read our suggestions from our free library:

• Article: How to Reduce Upstream Emissions With the Gold Standard Framework for Supplier Engagement
• Article: 10 Reasons Net0 Is the Best Carbon Accounting Platform
• Article: Why Communicating Your Efforts to Be Carbon Neutral Is Important

GHGP Corporate Value Chain Accounting Reporting Standard 

The GHGP Corporate Value Chain Accounting Reporting Standard gives standards for different carbon emission areas including cities, companies, projects, products, corporations, value chains and their scope 3 emissions, and for mitigation goals. When this standard was developed they took into account the life cycle of the product and the entire value chain. 

Scope 3 emissions are the hardest to count since they happen outside of the company walls with vendors and distribution centers. However, scope 3 emissions reporting is giving a competitive edge to value chains and investors, and smart consumers are beginning to overlook brands that are not regenerative, eco-friendly, transparent, or giving back to societies. 

This standard covers all upstream and downstream emissions which happen before and after the production of the product of the reporting company. Net0 easily does these calculations for you with any data you provide. You can discuss with your value chain what emissions you would be accountable for to avoid the double counting we have discussed above. 

Measuring scope 3 emissions also benefit risk vs. opportunity factors in the value chain, potential liabilities down the line, and help gain a complete understanding of the impact on their entire supply chain and product life cycle. This can guide inventory and procurement decisions, regulations within the company, and segue into better product design, in addition to preventing environmental harm. Evaluating the emissions on a broader scale will help pinpoint exactly where adjustments can be made.

In this analysis the other benefit is seeing where there is a gap in your market for a new or improved product. The scope 3 inventory as discussed in brief above has increased supply chain benefits. This will give companies space to create new products that will be environmentally friendly. It is a chance to replace old, outdated, and harmful products with sophisticated designs, better materials, and more productive life cycles that lean into the circular economy. This will also catch the investor's eye and open up new opportunities to increase product development while you're saving the planet.

Inventories 

Scope 3 inventories are based on relevance, completeness, consistency, transparency, and accuracy. The consolidation approaches of the emissions are by equity share, financial control, or operational control. 

  • Equity share - the reporting company accounting for GHG emissions from operations with regards to its equity share in the operation. This relies on the rights of the company from risks and rewards in that operation.
  • Financial control -  This approach states that the reporting company will account for 100% of the GHG emissions that it has financial control of, (not including those of which it owns an interest).
  • Operational control - This approach states that the reporting company will account for 100% of the GHG emissions that it has operational control of (not including those of which it owns an interest).

For details about how to set these apart from scope 1 and 2 inventories you can see the GHGP directly and discuss that with your inventory and accounting teams. However, with Net0, you don't have to separate your emissions. You add your data simply with what you wish to provide the system and our reports will automatically categorize your emissions in an itemized way. 

Setting the boundary

What you include in your scope 3 emissions reporting is referred to as the boundary. Companies that report scope 3 still must disclose the exclusions and reasons for those. 

Biogenic CO2 emissions (i.e., from biomass combustion), aren't included in the scopes but will be reported publicly. This also goes for GHG removals such as biological GHG sequestration. 

When mapping the scope 3 inventories the reporting company must account for all parts at least to the minimum level, as close to 100% completion as possible. 

After setting the boundary

Now you'll want to collect primary data from others in the value chain regarding their emissions and secondary data which is industry-related estimates like from government statistics or scientific studies. You can track performance over time, especially with the high priority activities. 

You'll also set your targets like with the corporate standard, with regards to intensity and absolute. These can be analyzed with ease in Net0's system with our graphs and charts that can be filtered with customizable dates.

set targets to reduce carbon emissions software platform

Achieving carbon neutrality through offsets and reductions

Whether you're following the corporate or value chain specific protocols, one thing we all need is to offset and reduce our emissions so our targets become lower every year until eradication is achieved. You can also recalculate your baseline emissions every year to make measurable and decreased allowances.

The Paris Agreement and the GHGP make it clear that offsets are necessary, not an excuse to emit more. We have to capture and remove the CO2 that is already in the atmosphere and they even recommend going a step further to remove past emissions. With carbon credits, the idea is that you have less credits every year to emit and offset. You can accomplish all of this in Net0's carbon accounting platform with over 140 offsetting programs to choose from. 

GHG Reporting with Net0

The GHGP has specific calculation tools on their site regarding industries and small businesses specifically. However, Net0 does all of the calculations with the data you provide, gives insights on reductions, offers offsetting projects, certifies to prove your carbon neutrality to stakeholders, and provides investor-grade reporting so you can communicate your efforts with clear and informative data. Since Net0 fully complies with all GHGP standards, your organization doesn't need to study the entire protocol because our platform categorizes and reports everything for you. You can see your carbon footprint all in one place with tables and graphs without having to find industry-specific tools. The sources of emissions and the big picture are all laid out for you on the dashboard. It's also beneficial that Net0's data is all stored in the same place so you can see details and the big picture of your carbon footprint all at once. 

emissions management software platform

Measure

Maximize your capabilities when you oversee how your processes flow in one place. In order to reduce carbon emissions, precisely measure all three scopes of emissions. The GHGP is the best standard to hold your business accountable and Net0 enables you to be able to see these processes and progression through its intuitive tools and precise graphs and charts over time frames of your choice. 

measure your carbon footprint chart

Reduce 

Understand what your carbon footprint is through Net0's analytical insights done through AI. Realize the sources of your emissions and set achievable targets to reduce them over time. Changing and improving processes and company protocols will become clearer. Use the Net0 simulator tool with predictive analysis to evaluate where your company will be in the future when making reductions of different carbon emissions sources.

set carbon reduction targets chart

Offset

Net0 offers over 140 diverse and verified offsetting projects so your company can offset your present and unavoidable emissions while you switch to alternatives.

offset carbon emissions software platform

Report

Net0 offers GHGP compliant, categorical reports in real-time, which is what investors and stakeholders value when they consider backing a business. Stakeholders will take you seriously and trust you as you pursue your milestones and achieve them. You can generate reports based on benchmarks, actions, offsets, and emissions.

Certify

The GHGP also emphasizes the necessity for ecolabelling which automatically generates through a hosted certificate in Net0's platform when you offset your emissions. You can use these certificates or badges on premises, your website, and product packaging. There is no need to get carbon neutral certified from an outside source as Net0 does it all for you.

get carbon neutral certified, certificate of carbon neutrality

Final takeaways

The GHGP is the best system to measure and report your emissions but you don't have to study and memorize the entire protocol to improve the atmosphere or your company routines. With carbon management software that is GHGP-compliant, you can follow all of the recommendations easily by just entering your data into the system and being accountable for your action plans.

This could seem like a lot of work for your company to do. That's why Net0 was invented. Book a demo with us for free and experience what our platform has to offer in terms of making your life easier by cutting costs and time. You'll be able to ask an expert any questions about how the platform works on your call.

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FAQ

What’s the difference between gross zero and net zero?

Again, net zero is coming to a balance between emissions and those which have been removed from the atmosphere. Gross zero means stopping all emissions, period.

Again, net zero is coming to a balance between emissions and those which have been removed from the atmosphere. Gross zero means stopping all emissions, period.
How soon can we start?

You can usually start using the system within a week of contract signature. Book a call with us to start.

You can usually start using the system within a week of contract signature. Book a call with us to start.
Do you help with setting up the processes?

Yes, our team will help you set up the platform and provide you with guidance on how to use it.

Yes, our team will help you set up the platform and provide you with guidance on how to use it.
What type of clients have you successfully helped?

We work with companies from different industries, from professional services and tech businesses to construction companies and manufacturing sites.

We work with companies from different industries, from professional services and tech businesses to construction companies and manufacturing sites.
What sets Net0 apart from others on the market?

Net0 offers simplicity, automation, no-code integrations, and provides an activity-based approach meaning the calculations are done by co2e tonnage and not by how much money was spent on the activity that led to emissions.

Net0 offers simplicity, automation, no-code integrations, and provides an activity-based approach meaning the calculations are done by co2e tonnage and not by how much money was spent on the activity that led to emissions.
Why do companies choose to work with Net0?

Net0 is the most comprehensive solution to recording, measuring, tracking, offsetting, and certifying emissions all in one place and in minutes. Net0 also enables organizations to invite anyone they want to contribute to the dashboard, being all-inclusive and simple to use.

Net0 is the most comprehensive solution to recording, measuring, tracking, offsetting, and certifying emissions all in one place and in minutes. Net0 also enables organizations to invite anyone they want to contribute to the dashboard, being all-inclusive and simple to use.

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