Greenhouse gas (GHG) accounting tracks and measures an organisation's output of GHGs. It involves collecting data, calculating emissions, reporting the results to an appropriate protocol or framework and working to reduce GHG production. It helps organisations understand the scope of their emissions, identify potential reduction opportunities, and is essential in their journey towards reaching emissions reduction goals.
Direct GHG emissions (Scope 1): emissions from sources owned or controlled by the organisation or its boundaries. For example, any emissions associated with manufacturing products.
Indirect GHG emissions (Scope 2): emissions from purchased sources such as electricity and heating used by the organisation.
Other indirect GHG emissions (Scope 3): emissions that are a consequence of the organisation's activities but occur from sources not owned or controlled by the organisation. These include distribution, employee travel, and using a company’s products or services.
Net GHG emissions can be calculated by measuring emissions emitted from sources in scopes 1,2 and 3 and adding these figures together.
Carbon accounting tracks and quantifies the carbon emissions from specific activities or sources. In contrast, GHG accounting measures the impact of all GHG emissions, including carbon dioxide, methane, nitrous oxide, and other gases. Thus, GHG accounting is broader. Both accounting methods identify areas where emissions can be reduced and measure the impact of reduction efforts.
GHG accounting certification verifies an organisation's ability to account for its GHG emissions correctly. Certification is necessary because it assures an organisation complies with international standards. These standards are set out by verified organisations and demonstrate a company’s legitimacy in its commitment to transparency and sustainability.
In New Zealand, the primary standard for GHG accounting is the Greenhouse Gas Protocol (GHG Protocol). This is an internationally recognised standard for GHG accounting and guides measuring, reporting, and managing emissions from all GHG sources, including direct and indirect emissions from energy use, industrial processes, waste, land-use change, and transport. The Protocol also provides direction on how to set reduction targets, develop GHG reduction strategies, and manage GHG emissions.
In New Zealand, there are several GHG accounting certifications available, including:
In summary, the GHG Protocol is a widely utilised framework for accounting for GHG. In contrast, other frameworks, like ISO 14064-1 and PAS 2050, are more in-depth standards that specify prerequisites and offer recommendations for GHG accounting and management at the organisational and product levels. These standards and guidelines provide a thorough GHG accounting and management method for businesses and organisations.
GHG accounting is becoming more critical as the climate movement gains more urgency and traction. It has never been more essential for businesses to show environmental responsibility, and GHG accounting is one of the first steps. GHG accounting allows organisations to make informed decision-making based on identifiable areas where emissions can be reduced. GHG accounting is increasingly becoming important for all organisations due to the increasing demand for regulations surrounding emissions and the expectation of sustainability initiatives.
Increase energy efficiency: Investing in energy-efficient equipment can help reduce energy consumption and, in turn, emissions.
Implement renewable energy: Using renewable energy sources such as solar, wind and geothermal is a great way to reduce emissions, as these sources do not require any fossil fuels.
Reduce transportation: Carpooling, public transportation, electric vehicles, and encouraging remote work are great ways to reduce petrol emissions.
Implement carbon offset programs: Organisations should offset any GHG emissions they cannot directly reduce by investing in offsetting projects like forestation initiatives.
Educate: Educate employees about the importance of reducing emissions and implementing sustainability initiatives at work and home.
Costs associated with GHG accounting will broadly vary depending on the size and goals of the organisation and the need for external advice and tools. The cost of ongoing monitoring and reporting will also vary depending on many factors.
Cost increases: Costs are associated with monitoring, reporting and potential investments in reducing emissions.
Supply chain management: GHG accounting may require companies to reassess their suppliers and other stakeholders in the value chain depending on their emissions level. Organisations may have to choose different suppliers if their emissions are too high and will remain the same.
Risk management: Companies may be exposed to increased uncertainty surrounding legislation and potential reputational damage if they do not take meaningful action to reduce their emissions.
Innovation: Companies will likely need to develop new technologies or processes to reduce emissions and reach their reduction goals.
Time: The process of GHG accounting is timely; with measuring, coming up with a plan and implementing that plan, a lot of resources will need to be redirected.
In conclusion, GHG accounting is an essential tool for regulating the effects of human activity on the climate and ensuring accountability for GHG reduction efforts. It can assist organisations in determining areas for improvement, setting realistic targets, and monitoring results. Organisations may make informed decisions on how to cut their emissions through GHG accounting, which will help lessen the effects of climate change.
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