March 27, 2022

Reporting

GHG Reporting: Everything You Need to Know

GHG Reporting: Everything You Need to Know
Contents

The GHG Protocol is a standardised, global approach to quantifying, managing, and reporting greenhouse gas emissions. It provides a consistent, transparent framework for businesses and organisations to measure and manage their carbon footprints and set reduction targets.

The Protocol consists of three key components: the Corporate Standard, the Product Standard, and the Scope Standard. The Corporate Standard is used to measure and report an organisation's direct and indirect carbon emissions, while the Product Standard is used to calculate the carbon footprint of a product over its entire life cycle.

The Scope Standard provides guidance on how to allocate carbon emissions to the appropriate scope (i.e., direct emissions, indirect emissions, or other emissions) for reporting purposes.

Overall, the GHG Protocol aims to help businesses and organisations effectively manage and reduce their carbon footprint in a way that is consistent, transparent, and credible.

If your business and the sustainability team aim to eliminate carbon emissions, then this article 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.

Scopes of greenhouse gas emissions

The GHG Protocol defines four scopes of emissions, which are used to determine which emissions should be accounted for in a given study or project.

These scopes are:

  1. Scope 1 emissions are direct emissions from sources that are owned or controlled by the company or organisation being studied.
  2. Scope 2 emissions are indirect emissions from the generation of electricity, heat, or steam purchased by the company or organisation.
  3. Scope 3 emissions, which are all other indirect emissions that are a result of the company's activities, but are not included in Scope 2 (e.g., emissions from the use of a company's products). 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.
  4. Scope 4 emissions are emissions from the indirect impact of a company's activities on the climate (e.g., changes in land use or deforestation resulting from a company's operations).

The GHG Protocol provides guidance on how to calculate and report emissions in each of these scopes, helping companies and organisations understand and manage their greenhouse gas footprints.

value chain emissions flow chart scope 123

Carbon emissions reporting under the GHG Protocol

The reporting of scope 1 and scope 2 emissions is mandatory under the GHG Protocol Corporate Standard.

The reporting of scope 3 emissions is not necessarily mandatory, but it is strongly encouraged by the GHG Protocol.

The GHG Protocol does not specifically address scope 4 emissions. Because scope 4 emissions are not directly linked to a company's operations, the GHG Protocol does not require companies to report these emissions.

Net0 Analytics by scopes

GHGP Corporate Standard

The GHGP Corporate Accounting and Reporting Standard is the most commonly used guide.

Voluntary trading

The GHGP's business goals emphasise that carbon markets must play a role if the business aims to reduce emissions. 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.

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 finance 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 strategise 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 point of setting a target is that your emissions should be lower than they were the previous year. This will mean that proper reduction strategies have been utilised 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.

Net0 Simulations Targets

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

  1. Obtain senior management commitment - achieving carbon neutrality is easier when the whole team is onboard and the net zero emissions commitments are approved by the C-level executives.
  2. Decide on the target type - absolute (reduce 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 achieving your targets.
  3. Decide on a target boundary - decide on the GHGs in the boundary, geographies included, sources, and activities within the boundary.
  4. Choose the target base year - a fixed base year (e.g. "reduce emissions 25% 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 rolling forward at regular time intervals, usually one year, so that emissions are always compared against the previous year). With the Net0 simulator tool, you can predict emissions reductions from different sources and plot them over time.
  5. Define the target completion date - this is based on how quickly a company can realistically get to net zero carbon emissions.
  6. Define the length of the commitment period - for how many years the company will commit to reducing emissions down to net zero emissions.
  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 carbon footprint than you have emitted in the reporting year. Moreover, offsets are needed for any of the emissions that you presently can't avoid. Purchasing offset credits 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 greenhouse gases. 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 the business. All of these can be achieved by using Net0's emission management platform.
Recommended 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 centres. 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 society.

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, and 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, and 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. Net0 helps you to categorise the data your provide so you would not need to worry about manually separating the data.

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

To get an accurate idea of your company's emissions, you'll need to collect data from every level of the supply chain. This is called primary data. You will also need to supplement this information with secondary data, which are industry-related estimates that come from sources like government statistics or scientific studies. With Net0, you can track your progress and performance over time. This is especially helpful for high-priority activities.

Your sustainability team will also be able to set targets following the corporate standard, with regards to intensity and absolute. Net0's system features graphs and charts that can be customised according to specific dates, making data analysis easy.

set targets to reduce carbon emissions software platform

Achieving carbon neutrality through offset projects and carbon reduction

Whether you're following the corporate or value chain-specific protocols, one thing we all need is to offset and reduce our emissions so that the targets become lower every year until eradication is achieved.

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 carbon that is already in the atmosphere and they even recommend going a step further to remove past emissions.

GHG Reporting with Net0

Net0 is fully compliant with the GHG Protocol and offers a platform that categorises and reports emissions data for users. This eliminates the need for companies to study the entire protocol themselves. The platform provides a comprehensive view of an organisation's carbon footprint through the use of tables and graphs, without the need for industry-specific tools. The sources of emissions and overall picture are displayed on the dashboard for easy access and understanding. Additionally, Net0's data is all stored in one place, allowing for easy access to both detailed and overall information on an organisation's carbon footprint.

Not only does Net0 support the required reporting format by the GHG Protocol, but it also makes compliance easier for all companies - large and small.

emissions management software platform

Reducing carbon footprint and becoming carbon neutral

Adopting the GHG Protocol can make it easier for companies to become carbon neutral by providing a standardised framework for measuring and managing carbon dioxide emissions. By using the Protocol's Corporate and Product Standards, companies can accurately and consistently assess their carbon footprint and identify opportunities for reduction.

Carbon management software that follows GHGP standards makes becoming carbon neutral much easier.

If your company is interested in measuring and reporting its carbon emissions in accordance with the GHG Protocol, consider using Net0 to help you manage and reduce your carbon footprint. Net0 is a powerful software solution that provides an easy-to-use platform for tracking, analysing, and reporting greenhouse gas emissions. With Net0, you can accurately measure your carbon dioxide emissions, identify opportunities for reduction, and set and track progress towards your carbon reduction targets. Additionally, Net0's comprehensive reporting features make it easy to disclose your emissions data and show your commitment to achieving net zero emissions.

Take the first step towards reducing your carbon footprint and achieving carbon neutrality by booking a call with our team to manage and report your emissions in accordance with the GHG Protocol.

Profile picture of the co-founder of Net0

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This article has been brought to you by Sofia Fominova, a co-founder of Net0. For daily updates, news and industry insights, please follow Net0's business page on LinkedIn.


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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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