Environmental reporting
Preparing a carbon report
Greenhouse gas protocol
The Greenhouse gas protocol (GHG protocol) is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions.
The GHG protocol provides a standard and guidance for organisations preparing a GHG emissions inventory. Using this approach will help:
- companies prepare a GHG inventory that represents a true and fair account of their emissions, through the use of standardised approaches and principles.
- simplify and reduce the costs of compiling a GHG inventory
- provide business with information that can be used to build an effective strategy to manage and reduce GHG emissions
- increase consistency and transparency in GHG accounting and reporting among various companies and GHG programmes
Steps
1. Define the organisational boundary
Business operations vary in their legal and organisational structures; they include wholly owned operations, incorporated and non-incorporated joint ventures, subsidiaries, and others. In setting organisational boundaries, a company must select an approach to define the businesses and operations that constitute the company for the purpose of accounting and reporting GHG emissions.
2. Identify sources of emissions within the organisational boundary
For effective and innovative GHG management, setting operational boundaries that are comprehensive with respect to direct and indirect emissions will help a company better manage the full spectrum of GHG risks and opportunities that exist along its value chain. Companies should disclose what boundaries are being used and what emissions sources are included.
- Direct GHG emissions are emissions from sources that are owned or controlled by the company. For example, emissions from combustion in owned or controlled boilers, furnaces and vehicles.
- Indirect GHG emissions from electricity purchased. Indirect emissions are a consequence of the activities of the company but occur at sources owned or controlled by another company. For example, GHG emissions from the generation of purchased electricity consumed within the defined boundary of the company.
As a minimum, companies should be ensuring their GHG inventories include the above information.
- Other indirect GHG emissions - are a consequence of the activities of the company, but occur from sources not owned or controlled by the company. Some examples include activities are extraction and production of purchased materials; transportation of purchased fuels; and use of sold products and services. Companies may choose to include information on indirect emissions.
Companies may already have data on fuel usage from transportation and utility bills from electricity suppliers and will need to convert this information into CO2 equivalents. To do this, you will need to refer to Defra’s conversion factors.
Other useful links
- Defra news release: Business risks of climate change need to be faced, not ignored - Pearson
- Carbon Disclosure Project
- Climate Disclosure Standards Board
Page last modified: 21 June 2007