Carbon Accounting 101
Updated: Jan 20
What are Greenhouse Gasses?
Simply put, Greenhouse Gasses (GHGs) are gasses that warm the earth. Here’s how it works:
Sunlight (solar radiation) reaches the earth.
Some of the sunlight is absorbed by the earth's surface and atmosphere, and some of it is reflected back into space. The light is absorbed by Greenhouse Gasses in the atmosphere and re-radiated as heat in all directions. This has a warming effect on the earth.
The main Greenhouse Gasses are Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), Sulfur Hexafluoride (SF6), and Nitrogen Trifluoride (NF3).
We need Greenhouse Gasses to keep the earth warm and at the desired temperature equilibrium to harbor life. Some amount of Greenhouse Gasses are good, and they are crucial for keeping the earth at a livable temperature. Having too many Greenhouse Gasses, however, warms the earth above the temperature equilibrium and threatens the earth systems that were designed for milder temperatures.
Many human activities put additional Greenhouse Gasses into the earth's atmosphere. Some examples include: burning fossil fuels, mixing cement, manufacturing steel, using fertilizer, and leaking refrigerants.
Greenhouse Gas “Emissions” are created when we perform GHG-creating activities like the ones listed above, which further increases the temperature of the earth.
Note: not all GHGs are created equal. All GHGs have a “Global Warming Potential” (GWP) which represents the total impact a particular gas has on warming the earth. Carbon Dioxide (CO2) is used as the baseline gas and has a GWP of 1. Other more potent gasses like Methane (CH4) and Nitrous oxide (N2O) have GWPs of 25 and 298, respectively.
How are Emissions categorized?
GHG emissions (also referred to as "Carbon emissions") are broken down into 3 categories, or “Scopes.”
Scope 1 emissions are directly related to your operations (think company-owned cars / trucks and boilers / furnaces used in a manufacturing process).
Scope 2 emissions come from purchased energy (think electricity bills).
Scope 3 emissions are made up of the emissions that exist in your supply chain (think 3rd party shipping, product end-of-life treatment, emissions from companies you invest in).
Source: GHG Protocol
Check out our "Scope 3 Spotlight" blog post to learn more about Scope 3 Emissions.
How are Emissions calculated?
The GHG Protocol is the globally recognized standard for calculating emissions. At a high level, the steps are as follows:
Identify Emission Sources: define all of the operations, assets, and entities within your organization that produce GHG emissions. This process involves reviewing operational processes, conducting interviews, and analyzing process documentation. The deliverable is a full list of Emission Sources for your organization. For example: Truck #1000 is owned by your company and it uses gasoline as fuel to deliver your products to your customers. Truck #1000 is an Emission Source.
Once you have identified Emission Sources, you can start to Collect data. Each Emission Source will have Emissions that occur during its operation. These data may be collected daily, weekly, monthly, or yearly. The more frequently data are collected, the more insight you will have into real-time emissions activity. So, let’s say Truck #1000 provides fuel usage reports once per week. You would create one Emission every week to record the amount of fuel burned by Truck #1000 in the given week. Emissions will be created for every Emission Source that has been defined. These can be created manually or integrated directly from a system that contains the source data.
The next task is to Calculate Emissions. Different metrics are used to calculate emissions, such as Emission Factors (global averages), Mass Balance, Flow Rate, and Fuel Use. After selecting one of these Calculation Approaches, you are ready to complete the Emission calculation. Note, it is recommended to use a validated calculation tool to complete the emission calculation.
CarbonSuite's software solutions help you automate your entire Carbon Accounting process, from identifying emission sources to collecting data and calculating emissions. We also have built-in quality controls to ensure that you are producing the most accurate emissions reports from day one. Ready to learn more? Check out our product at offerings at https://www.carbon-suite.com/our-product
Okay I’ve calculated my Emissions, how do I report them?
You’ve done the hard work, now it’s time to publish your findings. Just like producing and auditing financial statements, identifying, collecting, and recording carbon emissions processes require meticulous accuracy. Reporting standards can differ widely depending on your specific region and its jurisdiction’s regulations.
We update CarbonSuite’s functions frequently to keep up with global reporting standards to ensure that you stay in compliance and take full advantage of the benefits of reporting your company’s GHG Emissions. https://www.carbon-suite.com/our-product
Once you have calculated and reported your company’s Emissions, you are ready to start building out your strategy to reduce your Emissions. Set a Science Based Target, broadcast it to the public, and get to work!
Ready to get started? Contact us at email@example.com today.