What is greenhouse gas accounting?

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.

What are the steps involved in GHG accounting?

1. Establish a GHG emissions baseline: An organisation must start by calculating its current emissions levels based on the required GHG scope data, such as fuel consumption, electricity use, and waste disposal. 
2. Establish the goals: The next step is establishing emissions targets based on the organisation’s personal goals and objectives. 
3. Identify GHG reduction opportunities: Identifying potential sources of emissions that can be reduced is a crucial step. 
4. Develop an implementation plan: Develop an action plan that outlines how to reach the desired goals and what works best for the organisation. 
5. Implement the plan: Implement the procedure by changing processes, practices, and activities. 
6. Monitor and report progress: Track the plan's progress periodically and report results to stakeholders using a verified reporting framework. 
7. Evaluate and adjust: It is vital to keep evaluating the results by comparing the goals to actual performance. The organisation must make adjustments as needed to ensure the results are successful.

What are the GHG categories for accounting purposes?

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.

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How do you calculate GHG?

Net GHG emissions can be calculated by measuring emissions emitted from sources in scopes 1,2 and 3 and adding these figures together. 

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Carbon accounting vs GHG accounting

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.

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GHG accounting certification

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.

The GHG Protocol offers offers multiple online learning solutions to get busy professionals up-to-speed on the world's most widely used GHG accounting standards. Here are the offered courses:

1. Corporate Standard Training Webinar
2. Scope 2 Guidance Training Webinar
3. Corporate Value Chain (Scope 3) Standard E-Learning
4. Product Life Cycle Standard E-Learning
5. Policy and Action Standard E-Learning
6. Mitigation Goal Standard E-Learning
7. Partner Developed Courses
8. Designing MRV Systems for Entity-Level Greenhouse Gas Emissions
9. Global Covenant of Mayors eLearning Modules and Training Resource

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GHG accounting standards

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.

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What are GHG accounting certifications in NZ? 

In New Zealand, there are several GHG accounting certifications available, including: 

• Greenhouse Gas Protocol. The GHG Protocol comprises standards for estimating emissions from various sources, such as direct emissions from fuel burning and indirect emissions from purchased energy. It instructs businesses and organisations to assess and control their GHG emissions.
• CEMARS – Certified Emissions Measurement and Reduction Scheme 
• ISO 14064– International Organisation for Standardisation. ISO includes standards for quantifying, monitoring, and reporting GHG emissions and removals and designing and developing organisation- or project-level GHG inventories. It offers more specific criteria for GHG accounting and is a supplemental standard to the GHG Protocol.
• PAS 2060 – Specification for Carbon Neutrality. PAS is a publicly accessible specification created by the British Standards Institute (BSI) that offers direction for evaluating the products' and services' life cycle GHG emissions. It provides a framework for figuring out a product's or service's overall carbon footprint, including manufacturing, transportation, usage, and disposal emissions.
• The Climate Registry Standard – Reporting and Verification Protocol 

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.

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What is the importance of GHG accounting?

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.

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How can organisations develop strategies to reduce GHG emissions? 

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. 

Here are 6 benefits of implementing these strategies to a business according to Sustain Life:

1. Regulatory risk mitigation
2. Energy and cost savings
3. Supply chain resilience and efficiencies
4. Future-proofing the business
5. Brand positioning
6. Environmental and social benefits

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What is the cost of implementing GHG accounting? 

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.

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What are the potential impacts of GHG accounting on operations? 

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. 

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Summary

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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