Making Sense of the Jargon: A Simplified Guide to Carbon Reporting Terminology
GHG, Scopes 1,2 and 3, tCO2e, ESG, GRI, SBTi, cradle-to-gate, cradle-to-grave, upstream, downstream, fugitive emissions (sounds like something from a crime movie), GWP, emission factors, spend based method, activity based method, emissions intensity reporting, and the list goes on…
But the good news is that whilst the experts (that’s us) need to know all of this, many of them you don’t need to know.
So, here’s a summary of what is good for you to know.
GHG - an abbreviation for greenhouse gases. Simply put these are the nasty gases that we produce in our businesses (and personal lives) that are impacting the environment and are responsible for the increased average temperature of the planet. The most common one is carbon dioxide.
Scopes 1, 2 and 3. These are a way to separate three different sources of emissions into separate buckets so that each can be reported individually. Scope 1 is fuel consumption. Think fuel in vehicles, trucks, ships, manufacturing equipment, generators and fugitive emissions.
I love the sound of fugitive emissions, it conjures up a prisoner on the run in a movie which is exciting and potentially scary or full of suspense. But fugitive emissions are not nearly that interesting. They are the gas leaks from equipment, like refrigerators and air conditioners. It may be gas that’s leaked during servicing of the equipment, or it can be the gradual release of gases as the equipment ages and is less robust.
Scope 2 is electricity usage.
Scope 3 covers everything else a business consumes.
Carbon reporting use where possible, activity based data. For example, litres of fuel, airline miles travelled, kilowatt hours of electricity. However, where there is no activity data, we use spend based data. That is, we use the amount spent and apply the emissions factor to that.
Emissions factors. There are 10s of thousands of them, with more being added as data becomes available. I know, that’s a lot, but the good news is you don’t need to know the details of any of them. These are the numbers we use in our calculations and they are applied based on the allocations we apply to the business costs.
At the end of the day, there are two numbers that are reported. Total carbon emissions reported in tonnes of carbon dioxide equivalents (tCO2e). This figure is a total of the Scopes 1, 2 and 3 emission figures.
The second number is the emissions intensity figure. This is the figure of emissions per unit of production in the business. Examples include:
An electricity company would use emissions per megawatthour of electricity generation,
A farmer would use emissions per tonne of produce
A tech company may use emissions per equivalent full time employee
A consulting company, like mine, would use emissions per dollar of revenue
As the requirements for reporting carbon emissions increase, we will start to see more emissions intensity figures. I believe that these will become a requirement on food packaging, white goods will not only have their energy ratings but also the emissions intensity figures. We will be making buying decisions based on emissions intensity figures before long.
We are proud to advise that this article was written by the team and not produced by AI.
Photo by Emiel Maters on Unsplash