How can you account for indirect greenhouse gas emissions in your carbon footprint report?

Fostering transparency and trust through the disclosure of complete environmental impact is essential in cultivating strong relationships with stakeholders, showcasing a steadfast dedication to sustainability. Accurate accounting of indirect emissions serves as a proactive measure to mitigate risks, safeguarding against reputational harm. By pinpointing critical areas within supply chain, targeted enhancements can be implemented, fostering greater efficiency, potentially curbing costs, and nurturing stronger ties with suppliers. Proactively considering indirect emissions not only establishes leadership within industry but also encourages innovation while influencing industry standards.

Accounting for indirect greenhouse gas (GHG) emissions in your carbon footprint report is essential for informed decision-making, transparency, and achieving your sustainability goals. By accounting for indirect emissions, you gain a deeper understanding of your climate impact, identify critical reduction opportunities, and demonstrate your commitment to environmental responsibility

Important to account for indirect emissions as they cover almost 70% of an organizational total emission. It is covered under Scope 3 emission category as per GHG protocol. While reporting for ESG, it is very important to account for indirect emissions.

Accounting for indirect emissions is a crucial aspect of a comprehensive sustainability strategy, providing a more accurate reflection of an organization's environmental impact and aiding in informed decision-making and stakeholder engagement. By considering both direct and indirect emissions, an organization can gain a more holistic understanding of its environmental impact. This approach aligns with the principles of a broader concept called Scope 3 emissions accounting in the context of greenhouse gas (GHG) emissions. Holistic Environmental Impact. Stakeholder Communication. Performance Comparison. Global Goals and Compliance Strategic Decision-Making.

The most contributors of GHG gasses are mainly direct emissions however indirect emissions/embodied carbon can also contribute by a large amount of carbon dioxide.

The most difficult emission to calculate is scope emission as scope 3 emission account for all the indirect emission caused by the supply chain of the organisation. Scope 2 emission is the emission caused by the electricity used by organization for consumption or primary fuel which your using in your activities. It's easy to decarbonize your scope 2 emission for example if you just purchase the renewable energy for your consumption you can reduce your scope 2 emission.

Types of indirect emissions are: 1. Electricity consumed in the organization purchased from local grid 2. 15 different sub-categories in Scope 3 emissions. These are upstream and downstream activities including travelling of employees, transportation, purchase and sell of products.

These three categories provide a comprehensive framework for organizations to assess and address their indirect emissions, contributing to a more thorough understanding of their overall environmental impact and supporting sustainable business practices. Scope 2 Emissions: These are indirect emissions associated with the generation of purchased electricity, heat, or steam. Scope 3 Emissions: Scope 3 emissions are broader and encompass all other indirect emissions that occur in the value chain of the reporting organization but are not classified as Scope 1 or Scope 2. Biogenic Emissions: Biogenic emissions are specific to the combustion or decomposition of biologically based materials.

Transport emissions, extraction of raw material, business trips, emissions due to transport, office applications, services, construction, waste and all classified under embodied carbon.

There are two main categories of indirect greenhouse gas (GHG) emissions: Scope 2 and Scope 3. 1.Scope 2 emissions: Electricity, steam, heating, or cooling: These emissions arise from the energy you purchase and use in your operations. Even though you don't directly generate them, they occur at the power plants or facilities supplying your energy. 2. Scope 3 emissions: These are all other indirect emissions throughout your value chain, not directly owned or controlled by you. They're a broad category encompassing various activities and sources.

By following these steps, organizations can quantify and report their Scope 2 emissions accurately, enabling them to better understand their carbon footprint and take informed actions to reduce their environmental impact. Data Collection: Gather data on the amount and types of energy (electricity, heat, or steam) your organization purchases. Emission Factors: Apply emission factors to the energy consumption data. Methodology: Choose between the two main methods for calculating Scope 2 emissions: Location-Based Method or Market-Based Method Calculation: Multiply the energy consumption data by the applicable emission factors to calculate the associated greenhouse gas emissions. Reporting: Document your methodology and emission calculation

Scope 2 emissions are calculated from the total electricity consumption. We directly multiply the total electricity consumption in kWh with the emission factor of the local grid electricity. This is simplest way to calculate Scope 2 emission.

Location-based method is easier since grid average emission factors are readily available from public data sources. However, it does not account for any renewable energy sourced. Market-based method is more complex but provides specificity based on actual power generation sources contracted, including renewable energy. Market-based method better reflects emissions reduction efforts from energy procurement decisions. Tracking energy consumption at facility level provides greater visibility into usage patterns and opportunities to optimize. Centralized data management systems are essential. Regular meter calibration, data validation checks, and verification of conversion factors are key to ensure measurement accuracy over time.

Measuring Scope 2 emissions involves determining the greenhouse gas (GHG) emissions associated with the purchase of electricity, steam, heating, or cooling for your operations, starting from : 1. Data gathering: Collect details like annual energy consumption from your bills or meter readings. 2. Emission factor selection: Obtain emission factors from your energy supplier or certificate provider. 3. Calculation: Multiply your energy consumption (kWh) by the appropriate emission factor (kg CO2e/kWh).

There are different methods to do that and the most common one is using emission factors data base. starting from collection data related to quantities and units of whatever source you are measuring and use the emission factor to convert it to CO2 equivalent.

Scope 3 emission account for all the indirect emission caused by the supply chain of the organisation and surprisingly accounts for 95% emission of the organisation. There is certain standards provided by the different organisations to calculate scope 3 emissions, for example you can divide your scope 3 emissions into upstream and downstream where upstream account for purchasing of your raw materials and converting those raw materials into the goods and it also account for all the emissions coming from the various activities used in different upstream process. Downstream emissions account for all the activities used while the distributing your goods to your consumers and the usage of those goods.

Scope 3 emissions are calculated in a different way unlike Scope 2 and Scope 1, since it include 15 different sub-categories: 1. Purchased goods and services 2. Capital goods 3. Fuel and energy related activities 4. Upstream transportation and distribution 5. Waste generated in operations 6. Business travel 7. Employee commuting 8. Upstream leased assets 9. Downstream transportation and distribution 10. Processing of sold products 11. Use of sold products 12. End of life treatment of sold products 13. Downstream leased assets 14. Franchises 15. Investments

To measure your scope 3 emissions we need: 1. Identify relevant categories: The GHG Protocol defines 15 categories of Scope 3 emissions, but not all are equally important for every company. Analyze your operations and value chain to identify the categories most significant to your footprint, such as: Purchased goods and services or Transportation and distribution 2. Choose calculation methods: For each category, there are different methods to quantify emissions, depending on data availability and resources.Common methods include Spend-based, Activity-based orSupplier data 3. Gather data: 4. Perform calculations:Apply the chosen methods and emission factors to your data to estimate emissions for each category. 5. Reporting and analysis:

Biogenic emissions refer to the release of gases or particulate matter into the atmosphere that originate from natural biological processes. These emissions are produced by living organisms and can include compounds such as methane, carbon dioxide, volatile organic compounds (VOCs), and nitrogen oxides. Vegetation, microbes, and animals contribute to biogenic emissions.

Transparent, accurate indirect emissions reporting demonstrates commitment, supports benchmarking, and helps identify hotspots to focus reduction efforts. Identify any estimates or assumptions made where primary data is lacking. Detail year-on-year changes in emissions, especially any recalculations or changes in methodology or boundaries. Provide context on emissions relative to business metrics like revenue, production volume, or other normalizers. Report absolute emissions and intensity metrics. Discuss reduction targets, initiatives in place, and future plans to manage or mitigate indirect emissions. Obtain external assurance or verification for more credibility, especially for public reporting.

I came across an organization that started accounting with an assessment of the it's significance relevance scope 3 emissions. Develop an action plan and strategize in collecting data especially from suppliers and contractors of the upstream and downstream. Accounting an indirect emissions for scope 3 is a process (may take time) to reach its completeness.

GHG protocol standard divide the scope 3 emission into two parts one is upstream emission and the second part is downstream emission. Upstream are the all supporting activities which usually take the raw materials and convert that in the finish good. Downstream are all supporting activities which usually take your finished good and distribute it to the customer. Divide your own activities in these two streams and then check the emission of all that activities and try to find out different methodologies which you can use to reduce those emissions. For example if you distributing your goods to consumers with the help of petrol vehicles causing emissions so you can convert those vehicles to EV and reduce the emission from the downstream.

Reporting your indirect emissions, encompassing both Scope 2 (purchased energy) and Scope 3 (value chain emissions), plays a crucial role in achieving environmental transparency and accountability as well as demonstrating your commitment to sustainability and informing stakeholders about your environmental impact throughout: 1. Choose your reporting framework 2. Gather and analyze data 3. Calculate emissions 4. Prepare your report 5. Transparency and disclosure: Be transparent about any limitations in your data or reporting methods. Disclose your climate goals and reduction strategies for both Scope 2 and Scope 3 emissions and Consider external verification of your report for increased credibility.

Compile a list of categories pertinent to organizational materiality and defined boundaries, focusing on scope 2 and scope 3 - the 15 categories of indirect emissions. Engage cross-functional teams responsible for each identified category, emphasizing the significance of emission accounting. Document the data collection and QA/QC procedures, ensuring comprehensive coverage in the initial assessment to identify both major and minor emission categories. Prioritize efficiency with an 80:20 principle, allocating efforts to capture 80% of emissions with minimal time, rather than overly investing in calculating the remaining 20%.

Scope 3 emissions are those that occur in the value chain of the organization, both upstream and downstream. This includes emissions from the extraction, production, and transportation of materials and fuels used by the organization, as well as emissions from the use and disposal of its products and services by its customers. To account for indirect emissions in a carbon footprint report, an organization needs to identify and quantify the sources and amounts of Scope 2 &3 emissions associated with its activities. This can be done by using emission factors, life cycle assessment, or supplier-specific data. The organization should also report the methodology, assumptions, and uncertainties involved in the calculation of indirect emissions.