What data you will need

The complete guide on what data you'll need to include, and when to use spend or activity data

In this guide:

A quick intro to carbon accounting and Scope 1, 2 & 3 emissions

Carbon accounting refers to the measurement of the carbon (or more accurately, the greenhouse gas) emissions resulting from your business activities. Greenhouse gases are often measured in terms of their carbon dioxide equivalence (CO2-e), which is why you may see the terms “carbon accounting” and “GHG accounting” used interchangeably.

When we measure emissions, we split them into three overarching categories (scope 1, scope 2 and scope 3 emissions) depending on how directly these emissions occur in relation to your business activities.

Scope 1 emissions: direct emissions from owned or controlled sources. These typically come from burning fuel in company-operated equipment (such as company cars), and leakages of refrigerants & other GHGs.

Scope 2 emissions: indirect emissions associated with the purchase of electricity, steam, heat, or cooling. For most businesses, scope 2 emissions can be thought of as the emissions resulting from generating the grid electricity that you purchase.

Scope 3 emissions: all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. The most common activities which result in scope 3 emissions are: business travel, employee commute, working from home, waste, purchased goods and services, capital goods, and upstream/downstream transport and distribution.

In general the formula used to calculate emissions is very simple: Emissions (kgCO2-e) = Activity Data (e.g. kWh) x Emissions Factor (e.g. kgCO2-e/kWh).

What emissions sources should I include in my boundary?

There are a few factors to consider when determining your emissions boundary:

  • Organisational boundary: what is the structure of your organisation in terms of entities, parent companies and subsidiaries? Your organisational boundary determines which company operations to include. Typically a reporting company should include the activities of its subsidiaries.
  • Operational Control: which emission sources are under your organisation’s operational control? These should be included in your emissions boundary. This is the most common method of determining an emissions boundary, and is the method that Trace uses by default.
    • Operational Control is defined as having the ultimate authority to design and implement operating, health & safety or environmental policy over a given activity.

You could also define your emissions boundary based on:

  • Financial Control: a consolidation approach whereby a company accounts for 100 percent of the GHG emissions over which it has financial control. It does not account for GHG emissions from operations in which it owns an interest but does not have Financial Control.
  • Equity Approach: where an organisation accounts for GHG emissions from operations and assets according to its share of equity in the operation

It is important to note that all Scope 1 and Scope 2 emissions are mandatory inclusions for a GHG inventory.

What data should I use in my measurement?

The formula used to calculate emissions from a given source is very simple (emissions data x emission factor = emissions). The beauty of using Trace is that you only have to worry about providing the emissions data, we provide the emission factors and perform the calculation.

We categorise your emissions data into two types:

  • Activity data: this is direct data such as kWh (for electricity), L (for fuel) or km travelled by bus (for commuting).
  • Spend data: this is the amount a business has spent on an emissions generating activity.

The data you provide depends on which emissions source we’re talking about, and what data you have available. Activity data is preferable in obtaining the most accurate calculation possible, however it’s not always available. See below for the most common applications of each data type:

Activity Data

  • Scope 1 (direct emissions, e.g. fuel) and 2 (electricity).
  • Where data is available: purchased goods (kg), capital goods (units), transport and distribution (kg.km), business travel (pax.km, hotel nights), commuting (pax.km), waste (kg or L)

Spend Data

  • Purchased goods and services
  • Capital goods
  • Business travel

Can anything be excluded?

There are a couple of reasons you may exclude certain emissions sources.

  1. Out of Scope
    Operational control is the key concept to consider here. If you don’t have authority to introduce and implement operational, health & safety, or environmental policy over an emissions source, it can be considered out of scope (Eg; taxes or admin fees).

  2. Relevance Test
    Emissions sources are relevant, and should be included, when any two of the following conditions are met (as per the GHG Protocol – Corporate Standard (WBCSD and WRI, 2004)):
    • the emissions from a particular source are likely to be large relative to the organisation’s electricity, stationary energy and fuel emissions
    • the emissions from a particular source contribute to the organisation’s greenhouse gas risk exposure (i.e. will the impacts of climate change pose a serious risk to the viability of this emission source over a timeframe suitable to the organisation)
    • the emissions from a particular source are deemed relevant by key stakeholders
    • the responsible entity has the potential to influence the reduction of emissions from a particular source
    • the emissions are from outsourced activities that were previously undertaken within the organisation’s boundary or from outsourced activities that are typically undertaken within the boundary for comparable organisations.

Our emissions boundary tool

Get a copy of our free Emissions Boundary Tool.

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