One of our service offers is helping our clients determine their Climate Active carbon footprint and obtain Climate Active certification from the Commonwealth Government. Over the last few months, we’ve received many calls of organisations wanting to find out more about Climate Active accreditation, which resulted in the publication of Part 1 of this series.
In Part 2 of this series, we will discuss more details about scope 1, 2 and 3 emissions and what emission sources typically form part of a Climate Active carbon footprint. In the final blog post of this series, we will go into more details about how to get certified under Climate Active.
What are scope 1, scope 2 and scope 3 emissions?
Scope 1 emissions are emissions directly generated at your operations, such as burning natural gas or driving company cars, or refrigerant gases in your air conditioning equipment.
Scope 2 emissions are caused indirectly by consuming electricity. These emissions are generated outside your organisation (think coal-fired power station), but you are indirectly responsible for them.
Scope 3 emissions are also indirect emissions and happen upstream and downstream of your business. Examples are waste, air travel, the consumption of goods and services, contractor emissions, or leased assets.
Figure 1: Emission sources and scopes – graphic adjusted from the Corporate Value Chain Accounting and Reporting Standard
Supply chain emissions/Scope 3 categories
According to the GHG Protocol, specifically the Corporate Value Chain Accounting and Reporting Standard, there are 15 categories of supply chain/scope 3 emissions
Upstream supply chain emissions
- Purchased goods and services
- Capital goods
- Fuel- and energy-related activities (not included in scope 1 or scope 2)
- Upstream transportation and distribution
- Waste generated in your operations
- Business travel
- Employee commuting
- Upstream leased assets
Downstream supply chain emissions
- Downstream transportation and distribution
- Processing of sold products
- Use of sold products
- End-of-life treatment of sold products
- Downstream leased assets
While this list looks a bit overwhelming, not all emission sources will be relevant. It’s important to prioritise your data collection efforts and focus on your most significant and relevant emission sources. You can ask questions such as whether you expect the emission source to be large relative to your scope 1 and scope 2 sources, or whether you have influence over the activity, or whether your stakeholders deem the emission source relevant.
The graphic below shows a graphical representation of a typical Climate Active boundary for emission sources.
Figure 2: Typical Climate Active boundary for emission sources
What are the benefits of calculating supply chain/scope 3 emissions?
Just looking at your scope 1 and scope 2 emissions can give you a distorted picture of your environmental impact. Going through the list of upstream and downstream scope 3 emission sources is a great exercise to identify the carbon intensity of your value and supply chain. It encourages the quantification and reporting of emissions from various suppliers, which can help you drive greater emission reductions. It will also have a snowball effect by not only you focusing on reducing your direct emission sources, but also encouraging your suppliers to reduce theirs.
For many organisations scope 3 emissions can represent a much larger emission source than scope 1 and scope 2 emissions, and it is often eye-opening to calculate your carbon footprint across all three scopes. Also, the more scope 3 emission sources you include in your carbon inventory, the more credibility your statement of carbon neutrality will have.
Understanding scope 3 emissions will help you plan for potential future carbon regulations and can guide corporate procurement decisions and product design.
What emission sources are in a typical Climate Active footprint?
A Climate Active carbon footprint encompasses many emission sources across the three carbon accounting scopes. One of the first steps in getting certified under the Climate Active program is to determine your carbon footprint boundary.
You need to include all emissions that you have direct control or ownership of, such as natural gas, transport fuel usage by your vehicles, and electricity consumption in your operations. You also need to identify all emissions that are a consequence of your activities but are outside of your direct ownership or control, such as waste and contractors’ transport.
You must also include emissions from third party electricity use under your organisation’s control even if they are offsite, such as outsourced data centres, if these emissions are large relative to other emission sources.
You don’t need to include every single emission source, but you must assess all other direct and indirect emissions to determine whether they are ‘relevant’.
The relevancy test
Under Climate Active, particular emissions sources are relevant when any two of the following conditions are met:
- The emissions are likely to be large relative to your electricity, stationary energy and fuel emissions
- The emissions contribute to your GHG risk exposure, and including and addressing them will help you to avoid future costs related to energy and emissions
- The emissions are deemed relevant by your key stakeholders (such as major customers, suppliers, investors or the wider community)
- You have the potential to influence an emissions reduction
- The emissions are from outsourced activities that were previously undertaken in-house, or from outsourced activities that are typically undertaken within the boundary for comparable organisations. Data centres and transport are typical examples of this.
If an emission source is relevant, you must include it in your carbon footprint boundary. You can exclude emissions that are not relevant, but you should disclose these in your public reporting documents.
You may find that many emission sources will be relevant, but you don’t have to collect data for all of them. For instance, if the associated emissions constitute less than 1% of the total carbon footprint, you can include the source in your boundary, but you don’t have to calculate its associated emissions.
There are many more questions to be answered, so stay tuned for Part 3 of this blog post series. If you are going through Climate Active certification for the first time, the whole process can seem a bit confusing. Engaging a registered consultant such as 100% Renewables will ensure a smooth and easy process. Please download our Climate Active brochure to find out more about how we can help you with your Climate Active certification.
100% Renewables’ staff are registered consultants with Climate Active. If you would like to achieve certification, or prepare for certification, please contact Barbara.
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