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Sustainability 101: What’s carbon accounting?

Do you’re feeling a bit misplaced when folks consult with sure environmental sustainability matters and aren’t positive the place to begin in terms of studying extra? Sustainability 101 is a weblog sequence which you could flip to for details about completely different environmental phrases that will come up at work, throughout discussions with pals, and even at your annual vacation gathering.

Based on the Intergovernmental Panel on Local weather Change (IPCC), local weather science says we should restrict warming to not more than 1.5 °C above pre-industrial ranges to keep away from the worst impacts of local weather change. And, in keeping with the Science Based mostly Targets initiative (SBTi), “So as to restrict warming to 1.5°C and keep away from the worst results of local weather breakdown, international emissions should be halved by 2030.” To assist scale back greenhouse gasoline (GHG) emissions, many corporations are attempting to determine what their carbon footprint is to allow them to begin making adjustments.

Carbon accounting, or GHG accounting, is the method by which a company estimates the whole quantity of GHG emissions which might be generated by its actions inside a set of boundaries. The predominant normal used to information these estimations is the GHG Protocol Company Accounting and Reporting Commonplace, first launched in 2001.The GHG Protocol establishes complete international standardized frameworks to measure and handle GHG emissions from personal and public sector operations, worth chains and mitigation actions.

Defining and quantifying GHG emissions

GHGs have been first outlined in 1997, underneath the Kyoto Protocol, and have been restricted to a set of six particular person GHGs or courses of GHGs: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). Nitrogen trifluoride (NF3) was added later for a complete of seven gases that organizations following the GHG Protocol Company Accounting and Reporting Commonplace report on.(1)

The outlined requirements set by the GHG Protocol are necessary as a result of they offer corporations the identical normal to comply with once they report on emissions. This in flip makes it simpler for folks to check corporations’ efficiency.

 Generally, GHGs are reported in items of carbon dioxide equivalents or CO2e. CO2e is a approach of mixing the seven gases into one unit, by their results on the environment over 100 years. In the event you consider GHGs as a forex, consider CO2e as being the one forex everybody makes use of, and you may swap currencies primarily based on their change fee or so-called “emission elements”. Emission elements permit us to transform varied exercise information into GHG emissions and mix them into our one unit, CO2e.

For example, should you consumed 100 kWh of electrical energy, to estimate the emissions you’ll multiply that information by your emission issue. If we used the 2023 emission elements from america Environmental Safety Company (EPA), we might multiply the 100 kWh by 0.386 kg CO2e/kWh which implies you’ll generate 38.6 kg CO2e.

As a reminder, emissions of organizations are labeled into 3 scopes:

  • Scope 1: Direct emissions from operations owned by the corporate. Examples: Heating gasoline utilized in firm buildings, gasoline use in firm automobiles
  • Scope 2: Oblique emissions from the technology of bought electrical energy, steam, heating and cooling. Instance: Electrical energy utilized in firm buildings
  • Scope 3: All different oblique emissions that happen in an organization’s worth chain. Examples: Worker enterprise journey and commuting, provider emissions, emissions from transportation and distribution of product, emissions from use of bought merchandise

Previous to quantifying a company’s GHG emissions, it’s necessary to know the time boundaries reported on throughout the Scope 1, 2 and three stock per the GHG Protocol. Whereas Scopes 1 and a pair of have a look at emissions from the reporting yr, classes in Scope 3 can have a look at previous, current, or future years as outlined in Determine 1 from a GHG Protocol report.(2) The GHG Protocol takes a lifecycle perspective, which implies for sure classes, like “Scope 3, Class 11: Use of Offered Merchandise,” a company accounts for all of a product’s lifetime emissions within the yr it’s bought.

A table showing the time boundary of scope 3 categories
Determine 1. Time boundary of Scope 3 classes. Sourced from the GHG Protocol.(2)

Estimating GHG emissions

 Carbon accounting relies on estimations. Generally, there are three major strategies of estimating GHG emissions: Exercise primarily based, spend primarily based or a hybrid strategy that makes use of each.

Exercise primarily based: Emissions are estimated by amassing major information and multiplying the worth by the related emission elements. Examples of major information embody power or gasoline consumed or quantity of fabric bought.

It will also be estimated from secondary information, which is information that isn’t from particular actions inside an organization’s worth chain. Some examples embody common information, proxy information or trade common information.(1)

Spend primarily based: Emissions are estimated by figuring out the amount of cash spent on an exercise and multiplying the worth by the related secondary information emission elements. Emissions elements will be from an environmentally-extended enter output (EEIO) database, or they are often extra provider particular, primarily based on reported emissions and income info. (1)

Hybrid: Emissions are estimated by first following the activity-based strategy after which utilizing the spend primarily based strategy if there are gaps. This will increase the protection of the potential in-scope emissions sources. (1)

 Enhancing our information

One of many targets of GHG accounting is to make use of major information as a lot as doable, however it’s not all the time straightforward to entry that information. For Scope 1 and a pair of, major information is often accessible, however in Scope 3, a company is usually reliant on secondary information. This could be a problem when attempting to know how varied investments or design decisions are serving to to scale back GHG emissions.

Cisco has set a objective to succeed in internet zero GHG emissions throughout our price chain (Scopes 1, 2, and three) by 2040, and now we have additionally recognized two near-term targets on the best way to that bigger objective.  We’re frequently working to enhance our information, present correct emissions estimates and drive GHG emission reductions.

 Info relating to Cisco’s environmental, social, and governance (ESG) initiatives, targets and commitments, our newest impression, in addition to insurance policies and extra disclosures for specialised audiences, will be present in our 2022 Cisco Function Report and supplemental info in our ESG Reporting Hub.

1 https://ghgprotocol.org/websites/default/information/requirements/Scope3_Calculation_Guidance_0.pdf (pg. 14, 17, 21)

2 https://ghgprotocol.org/websites/default/information/requirements/Company-Worth-Chain-Accounting-Reporing-Standard_041613_2.pdf (pg. 33)




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