What you need to do to before collecting data
Now you know the background and basics of emissions calculations. However, before you can begin collecting data and performing the calculations you need to do a little groundwork to ensure you will have a complete and accurate carbon footprint that will be consistent over time.
Setting boundaries 🔲
In carbon accounting, setting boundaries refers to the process of defining the scope and coverage of an organization's GHG (greenhouse gas) emissions inventory. This involves identifying the sources of GHG emissions within the organization, as well as the activities, products, and services that are included in the inventory.
Setting boundaries is an important step in carbon accounting because it helps to ensure that the organization's GHG emissions inventory is comprehensive and accurate. It is also important for establishing the baseline for GHG reduction efforts and tracking progress over time.
There are two types of boundaries every organization must set, and several different approaches to setting boundaries in carbon accounting. The specific approach that is used will depend on the goals and needs of the organization.
Organizational boundaries explained 🏢
In carbon accounting, the organizational boundary defines which facilities, or places, are relevant to your carbon footprint.
Organizational boundaries are important in carbon accounting because they help to ensure that the organization's GHG emissions inventory is comprehensive.
Overall, setting clear organizational boundaries in carbon accounting is essential for accurately tracking and reducing GHG emissions.
There are three main approaches used in setting organizational boundaries:
Operational Control
This is the most commonly used and simple to understand boundary approach. Except in rare circumstances, we recommend all companies use the operational control method of setting organizational boundaries.
Basically, if a company or one of its subsidiaries has the authority to make and implement operating policies at a particular operation, it has operational control over that operation. This is often the case when a company or its subsidiary is the operator of a facility – they'll have the power to make and implement policies there. This criterion is used by many companies when reporting on emissions from facilities they operate.
It's pretty rare for a company or subsidiary not to have operational control if they're the operator of a facility.
Financial Control
If a company has the power to make financial and operating decisions for another company in order to make money from that company's activities, it has financial control over the operation. This means that the company has the ability to direct the policies of the other company to get economic benefits. It's all about who has the power to make money-making decisions and who stands to gain from those decisions.
Equity Share
With the equity share approach, a company tracks its GHG (greenhouse gas) emissions based on how much of a stake it has in an operation.This makes sense because the company's share of equity reflects its economic interest in the operation – basically, how much control it has over the risks and rewards. So if a company has a big stake in an operation, it makes sense that it would be responsible for a bigger share of the GHG emissions. This is just one way to account for GHG emissions, but it's a pretty straightforward and fair way to do it.
Operational boundaries explained 🚃
As opposed to organizational boundaries, which define which sites and assets are included in your GHG inventory, operational boundaries define which activities will be included in your GHG inventory and how they will be classified.
Carbon emissions are separated into scopes 1, 2, and 3 in order to provide a consistent and standardized way of measuring and reporting GHG (greenhouse gas) emissions. This also helps ensure that GHG inventories reflect the impact of specific activities and, more importantly, the ability companies have to reduce the emissions they take responsibility for.
Scope 1 emissions are direct GHG emissions that are under the control of the organization, such as emissions from company-owned vehicles and on-site energy generation. An oversimplified explanation for scope 1 emissions would be emissions from anything you burn at sites you control.
Scope 2 emissions are indirect GHG emissions that result from the consumption of purchased electricity, heat, or steam. A simple rule for remembering which emissions are scope 2 is that it includes any energy you buy.
Scope 3 emissions are all other indirect GHG emissions that are not included in Scope 1 or Scope 2, such as emissions from the production of raw materials, transportation of goods, and disposal of waste. This the "everything else" category, and as such it is the most complex to map and measure scope 3 emissions.
Separating emissions into these three scopes allows organizations to track and report on the GHG emissions from different sources and activities, which can be useful for understanding the organization's carbon footprint and identifying opportunities for reduction. It also allows organizations to compare their GHG emissions to those of other organizations and benchmark their performance.
To set operational boundaries, you should review your operations and supply chain, determine which of the main categories of emissions are relevant to your organization, and justify why. It is also important to note any exclusions, whether because you don't have those activities in your operations or because you are unable to collect adequate data.
What is mapping? 🗺
Once you've determined where you will be tracking data (organizational boundary) and which emissions sources are relevant to your organization (operational boundary), it is worthwhile to quickly go through a mapping exercise.
Mapping is the process of determining which sources are in use at which sites. This allows you to make sure you are collecting all the data you need each time you do the inventory. If applicable, it is best to do this exercise with site managers because they will know best what is in use on their sites.
By the end of the mapping exercise you should know all of the fuel and energy sources in use at each of your sites, and as a result you should have the first data collection sheet!
If you plan to use a carbon accounting tool like Breeze, mapping reports can be generated automatically based on the data uploaded in the previous period.
Building an Inventory Management Plan (IMP) 📄
Organizational and Operational boundaries, among other important details about your GHG inventory process, are generally included in an Inventory Management Plan, or IMP.
The purpose of an IMP is to ensure that the organization's GHG emissions inventory is accurate, complete, and consistent over time.
An IMP typically includes information on the scope and coverage of the emissions inventory, the data sources that will be used to gather emissions data, the methods and tools that will be used to calculate emissions, and the quality assurance and quality control measures that will be applied to ensure the accuracy and reliability of the data. It may also include details on how the organization will communicate its GHG emissions data to stakeholders, such as employees, shareholders, and regulators.
An IMP is an important tool for managing and improving an organization's GHG emissions inventory over time. It helps to ensure that the inventory is reliable and can be used to track the organization's progress towards reducing its GHG emissions and meeting its sustainability goals.
Free GHG inventory boundary template 🆓
We provide all Breeze customer with a simple, straightforward GHG Inventory Boundary template so you can be sure you have checked all the boxes before jumping into data collection.
Click here to get access to the template and populate your own data!
