Measuring and Managing Greenhouse Gas Emissions (GHG)

Climate change is a growing global concern, and businesses are increasingly expected to take responsibility for their environmental impact. One of the most important steps in sustainability is measuring and managing greenhouse gas (GHG) emissions. This helps companies identify areas for improvement, mitigate risks, and demonstrate leadership in sustainability. 

However, many organizations may not know where to start when it comes to measuring their emissions. In this blog, we’ll walk you through the key steps in measuring GHG emissions and ensuring compliance with international standards. 

Understanding the Greenhouse Gas Protocol 

The Greenhouse Gas Protocol (GHG Protocol) is the most widely recognized accounting framework used by governments and businesses to measure, report, and manage emissions. It provides a structured approach to quantifying emissions and serves as the basis for most global GHG standards and programs. 

Step 1: Define Organizational Boundaries 

Before measuring emissions, a company must determine the boundaries for reporting emissions based on its organizational structure. There are two main approaches to setting these boundaries: 

🔹 Equity Share Approach – A company accounts for GHG emissions based on its ownership share in an operation. The percentage of ownership determines the proportion of emissions that the company reports. 

🔹 Control Approach – A company accounts for 100% of emissions from operations over which it has control, even if it does not fully own them. Control can be financial (if the company has financial control over the operation) or operational (if the company controls day-to-day activities). 

Different reporting goals may require different boundary-setting approaches, and many businesses use both methods. 

Step 2: Define Operational Boundaries 

After establishing organizational boundaries, companies must categorize their emissions into direct and indirect sources. The GHG Protocol defines three categories of emissions, known as Scopes 1, 2, and 3. 

🔹 Scope 1 (Direct Emissions): These are emissions from sources that the company owns or controls, such as emissions from company-owned boilers, furnaces, and vehicles. 

🔹 Scope 2 (Indirect Emissions from Purchased Energy): These emissions result from the company's electricity, heat, cooling, or steam consumption. 

🔹 Scope 3 (Other Indirect Emissions): These include all other emissions related to a company’s activities but occur outside its direct control. Examples include emissions from suppliers, product transportation, and employee commuting. 

Companies can choose to report only Scope 1 and 2 emissions or include relevant Scope 3 categories for a more complete emissions profile. 

Step 3: Choose a Base Year 

To track progress over time, businesses must select a base year with complete and verifiable GHG emissions data. This serves as a reference point for measuring reductions and setting sustainability goals. 

Once a base year is established, companies can define their GHG reduction targets, which typically fall into two categories:  🔹 Absolute Emissions Target – A commitment to reducing total emissions over time.   🔹 Intensity Emissions Target – A commitment to reducing emissions relative to production output or revenue. 

For businesses setting voluntary or regulatory sustainability targets, annual recalculations of emissions are recommended to track progress and adapt to any structural changes. 

Conclusion 

Measuring GHG emissions is a crucial first step toward sustainability and regulatory compliance. By defining organizational and operational boundaries, categorizing Scope 1, 2, and 3 emissions, and selecting a base year, businesses can create a structured approach to emissions management. 

With effective tracking and reduction strategies, companies can improve efficiency, reduce environmental impact, and align with global sustainability goals. 

Thank you for reading our blog post. We hope you found it valuable and informative.

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