Quick Start Guide to Developing a Green House Gas Inventory

18 Apr 2023

What You Need to Know to Begin Your GHG Inventory

As climate change becomes one of the major challenges of our time, it is increasingly important for companies to develop and implement carbon mitigation strategies to reduce greenhouse gas (GHG) emissions and strengthen climate resilience. The creation of a comprehensive and accurate inventory of GHGs is a foundational step in the process.

What is a GHG inventory?

A GHG inventory is intended to reflect all emission sources generated by a company.

Sadly, many companies struggle to create an accurate GHG inventory for their business activities, as it can be challenging to ensure relevance, completeness, consistency, transparency, and accuracy of GHG emissions quantification. Another challenge is that GHG emissions quantification sometimes reflects only a portion of a company's business activities, leaving out major scope 1, 2 and value chain (scope 3) GHG emissions sources.

How can my company create a GHG inventory?

The following important considerations will assist you in creating a complete GHG inventory for your company:

• Determining your organizational boundary;
• Choosing a base year;
• Identifying your emissions sources; and
• Knowing what data to collect.

Incorporating these best practices during the GHG inventory will ensure a comprehensive and accurate GHG calculation for your company.

Determining your organizational boundary

Understanding your company's organizational structure is essential for maintaining consistency in identifying business operations for GHG accounting purposes. To determine the organizational boundary within which your company will report, consider the equity share approach which accounts for GHG emissions based on the companies share of equity in the operation. Alternatively, consider the control approach which accounts for GHG emissions based on operations that it has 100% financial or operational control over.

A clearly defined organizational boundary ensures all relevant facilities, buildings, and operations are captured within the GHG inventory. The operational control approach is the most common approach used across the industry.

Choosing a base year

The base year used for your company's GHG inventory should reflect the full operations of your business for a calendar or fiscal year, typically 12 months. The base year serves as the benchmark for future comparisons of emissions. Thus, selecting a base year with current, high-quality data is advised in order to provide relevant comparison.

Identifying your emission sources

It is vital to identify GHG emissions sources from buildings and facilities that are relevant to, and fall within, your established organizational boundary.

• Scope 1 GHG emissions come from combustion sources that your company or controls (e.g., boilers used to heat buildings, company-owned vehicles, and refrigerant leakage from air conditioners).
• Scope 2 GHG emissions are those resulting from energy purchases, such as electricity and steam.
• Scope 3 value chain GHG emissions are caused by activities that your company does not own or control, but which are a result of its operations, such as purchased goods and services, business travel, employee commuting, and others.

While the majority of businesses will have a few scope 1 emission sources, an office-based corporation may have few or none. For other companies, purchased electricity may be their largest source of GHG emissions.

Consider these questions when identifying emission sources pertinent to your business:

What types of energy do we purchase? What is the stationary equipment, such as boilers and heaters, and mobile equipment, such as vehicles, trucks, lawn equipment, owned or controlled by my company? Do we combust waste gases from our operations? Is refrigerant used? Do we purchase gases? What value chain categories under scope 3 apply to our operations?

Knowing what data to collect

The information needed to create your GHG inventory varies depending on the type of emission source. To gather the correct data for your GHG inventory, you must know what to look for. When creating your data gathering method, keep the following in mind, because you will need this information:

• The types of utilities used (electricity, natural gas, steam, etc.);
• The annual quantity and units of purchased utilities (monthly/annual) from utility bills;
• The type of fuel used for process-related combustion (natural gas, diesel, propane, etc.);
• The annual quantity of fuel burned for process-related combustion; and
• The model and year of company owned vehicles (on-road and off-road), the fuel used, and the annual distance travelled by the vehicles or purchased fuel receipts.

Note that each scope 3 category has specific data requirements.

In order to achieve consistency, accuracy, relevance, transparency, and completeness of the inventory outcome, it is best practice to review the GHG data internally and have an inventory management plan that documents the inventory process.

Ready to create a GHG inventory? Intertek can help!

With climate change now front and center, companies should have a GHG inventory for their activities. Do you have questions about this topic or GHG emissions in general? Do you need assistance preparing your GHG inventory? Contact our experts at Intertek. We're here to help!