Simply put – you can’t manage what you don’t measure! To increase your competitive advantage, prepare for impending regulations, and do your part to slow down climate change, businesses need to measure and reduce their carbon footprint (otherwise known as their greenhouse gas (GHG) emissions).
Why measure GHG emissions?
In 2015, Canada signed the Paris Agreement and committed to holding global average temperature rise to less than 2 oC, and ideally to less then 1.5oC, above pre-industrial temperatures. In 2018, the Intergovernmental Panel on Climate Change (IPCC)’s Special Report on Global Warming of 1.5 oC emphasized that the global average temperature rise needed to be held to less than 1.5 oC to minimize the chance of passing tipping points that could lead to catastrophic global warming. In keeping with this goal, the IPCC indicated that GHG emissions needed to be reduced by at least 45% below 2010 levels by 2030. In June 2021, under the Canadian Net-Zero Emissions Accountability Act, Canada committed to reducing our national emissions by 40-45% by 2030 and to be net zero by 2050.
Since the signing of the Paris Agreement, thousands of large companies have made net zero commitments and are disclosing their GHG emissions and climate risks, often at the requests of their investors. Smaller companies are increasingly coming under pressure to measure and reduce their carbon footprints as larger companies look to reduce their value chain emissions. For example, in its 2022 Sustainability Report, Amazon announced that it will require its vast network of suppliers to report their GHG emissions and set climate goals.
Climate disclosure regulations are also on the horizon for publicly traded companies in Canada. On July 5, 2023, the Canadian Securities Administrator (CSA) welcomed the publication of the ISSB IFRS S1 and S2 disclosure standards and indicated their intention to adopt disclosure standards based on the ISSB standards. which require the reporting of GHG emissions.
In 2024, as required by the OSFI B-15 guideline, major Canadian banks and insurers will be mandated to disclose their GHG emissions and climate risk and will eventually be requiring their clients to disclose theirs as well.
In addition to preparing for current and upcoming regulations, businesses that measure and manage their carbon emissions responsibly can enhance their brand value and make themselves more attractive to potential lenders, investors, customers, and employees and capture cost savings through reduced energy and resource use. Therefore, there are many compelling reasons why businesses of all sizes should measure and reduce their GHG emissions.
What do we measure?
When we measure greenhouse gases, we typically include carbon dioxide (CO2), methane (CH4), nitrous oxide (N20), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6) emissions as material to the organization. The emissions are expressed as a carbon dioxide equivalent (CO2e) by multiplying the emissions of each greenhouse gas by its respective global warming potential.
GHG emissions are divided into three categories or scopes – Scope 1, 2, and 3.
Scope 1 emissions refer to direct GHG emissions that occur from sources that are controlled or owned by an organization. Examples include emissions from natural gas used for space or water heating, refrigerant loss, process-generated emissions, and transportation emissions from vehicles owned by the company.
Scope 2 emissions refer to indirect GHG emissions associated with any purchases of electricity or steam.
Scope 3 emissions are the result of activities not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. Examples include business travel, employee commuting, waste disposal, and transportation and distribution of raw and finished materials to name a few.
How do we measure?
To measure GHG emissions, we follow the widely used Greenhouse Gas Protocol standards and account for Scope 1 and 2 emissions, and Scope 3 emissions as material to the organization. The general process involves identifying the organizational and operational boundaries and emissions sources of the organization, collecting activity data for the various sources (e.g., natural gas usage and electricity usage via utility bills) and calculating the carbon footprint. The carbon footprint is calculated by multiplying the activity data by the appropriate emission factor by the global warming potential to express the carbon footprint in tonnes of carbon dioxide equivalent.
How Achieve Sustainability Can Help
Achieve Sustainability can help you determine your baseline carbon footprint. We can also assist you to set emission reduction targets and identify and prioritize opportunities to reduce your emissions over time, which frequently result in cost savings. In addition, we can help and advise with reporting your footprint internally or externally as desired. Reach out today at info@achievesustainability.ca for a complimentary consultation.
