Carbon Accounting 101: Why its important and how to get started

hi i'm melissa raid chief sustainability officer at in this video i'm going to cover some key concepts and definitions that you should know before compiling your emissions inventory so before we get started let's talk about some terminology we're talking about emissions accounting which is often used interchangeably with terms like carbon inventory carbon accounting carbon footprint emissions footprint emissions inventory and sometimes just the shorthand carbon but what we're talking about here is quantifying the greenhouse gases that your business emits and subsequently its impact on climate change greenhouse gases you may remember this term from grade school these are gases that naturally occur in the atmosphere and allow earth to be a habitable planet by trapping heat that is emitted from the sun and bounces off the earth's surface back into the atmosphere as we all know greenhouse gases have drastically increased in concentration since the industrial revolution and are in fact now causing too much warming co2e or carbon dioxide equivalence the emissions accounting process entails taking all of the different greenhouse gases that exist things that include methane and carbon dioxide standard emissions from a cartel pipe as well as some nastier things like fluorinated gases that are commonly used in refrigerants and rolling them up into a common unit of measure co2e so that we can compare all the different emitting activities on a single playing field so this is why we call it carbon accounting there is in fact some math involved here and if we really get into the weeds on how we convert the different greenhouse gases into co2e it's based on global warming potential which is the amount of energy that each of these gases absorbs and holds over a certain period of time so let's look at methane for example methane has a global warming potential of 28 which means it holds 28 times as much heat as carbon dioxide so one metric ton of methane equals 28 metric tons of co2e so if methane has a higher global warming potential than carbon dioxide why are we always talking about carbon dioxide and not any of these other greenhouse gases the reason is because all of these gases methane included are much less stable so even though methane is a more powerful insulator than co2 and can hold more heat it's also a lot less stable so it sticks around in the atmosphere for a much shorter period of time so overall co2 remains the most critical greenhouse gas so if this sounds overwhelming take a deep breath because it kind of is but i'm here to walk you through the nuances to hopefully make it more manageable for you so you may have heard of companies making bold climate pledges things like carbon neutral net zero or zero emissions these all have slightly different meanings which i'm not going to go into here but we do have a blog post that walks through the nuance but what they all rely on is carbon accounting and looking across emitting activities to roll them up into a single impact on climate change so let's start talking about what that means for you as a business there's this old adage what gets measured gets managed and that rings true when it comes to carbon accounting saying you want to reduce your emissions without carbon accounting is kind of like saying you want to lose weight without ever stepping on a scale dieting eating right exercising they're gonna feel great and they will probably move you in the right direction but until you step on that scale you won't be able to quantify the impact of those activities and when you think about setting a goal weight or in this case your emissions reduction target you'll never be able to identify that number unless you know where you're starting from so before we start calculating your carbon footprint you need to understand the categories of emissions which all that means is their source and whether that's something that you directly control or somebody else does so at a very high level you can break emissions into two primary buckets direct emissions which is everything your business owns or controls and indirect emissions which are things that support the operation of your business but you don't own or control directly so direct emissions include things like the fuel used in company cars heating oil or natural gas used to power building systems diesel used to power equipment whereas indirect emissions include things like purchase electricity which although your company purchases it's produced off-site at the electricity plant so it's an indirect emission so indirect emissions can further be broken down into upstream everything your business purchases or acquires and downstream anything related to the sold good or service that you produce next we need to know about scopes aka scopes one two and three and the purpose of scopes is just to help organize your emissions into more granular buckets so this might seem a little confusing but stick with me scopes allow you to identify how much co2 you emit based on everything it takes your business to operate so let's focus on scope one first i want you to think of these as burn scope 1 emissions include all those fuels that you burn directly think of this as the gas and company cars the heating oil or fuel used to power equipment if your company pays the fuel bill directly and owns the asset you have scope 1 emissions so now let's move on to scope 2 which i want you to think of as buy scope 2 emissions are associated with things like purchase electricity steam heating and cooling and these are considered indirect because while your company consumes this energy it's generated off-site somewhere else so you can't directly control it scope 3 emissions are indirect emissions associated with everything else that supports your business operation there are 15 categories of scope 3 emissions unless you own physical assets the majority of your emissions will likely be scope three and i have a spoiler alert they're also the most difficult to measure so again a good shorthand for remembering the scopes are the three b's scope one burn scope two buy and scope three beyond so let's bring it all together with an example let's think of something like a t-shirt manufacturer they might start off by measuring the emissions associated with the energy that they use at their factories that they own this would include maybe things like the diesel to power their equipment the electricity to keep everything on the heating oil to keep their workers warm and that's a great start that's their scope one and two but to really understand the full impact of its business operation it needs to look at these more nebulous scope 3 emissions and that includes things that are upstream as well as downstream from the point of sale of those t-shirts so just an example of what that might include some upstream emissions could include the energy that it takes to process the fibers that eventually become the cotton that gets sewn into these t-shirts as well as the transit miles it takes to deliver that raw material to the factory to be sewn into t-shirts those are both upstream scope 3 emissions a downstream scope 3 emission could be at the end of life of those t-shirts as it decomposes in a landfill the emissions that come from that process and that's just a sampling of what it could look like so i know that that's a lot to take in and it might seem overwhelming but it gets easier the more familiar you are with this emissions accounting framework and if you want to take a lot of the guesswork out of calculating these emissions identifying what's a relevant source for your business i have great news the free emissions management platform helps put into practice everything we've learned in this video so i invite you all to come check it out on and thanks for tuning in

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