This article sets out the requirements for setting a complete emissions boundary for your organisation.
Calculating the emissions from your business involves the following steps:
Establish the emissions boundary
The first step in calculating the carbon account is to determine which entities (organisational boundary) and which related emission sources (emissions boundary) need to be included in the carbon account.
Pathzero requires the organisation to provide its ABN (if Australian) or equivalent international business number and company URL to identify the organisation.
Under the GHG Protocol, Pathzero applies the “Operational control approach” to determine which related entities would be included within the organisational boundary.
Under the Operational control approach, the organisation reports 100 per cent of the operations over which it has “the full authority to introduce and implement its operating policies” – ((GHG Protocol – Corporate Standard (WBCSD and WRI, 2004))
Requirement: All operations over which the reporting entity has operational control must be included in the organisational boundary.
Scope of emissions
To help differentiate between emission sources, emissions have been classified into the following scopes (adapted from the GHG Protocol).
Table 1: Emission source scopes
All stationary energy and fuels used in buildings, machinery or vehicles in the organisation’s control (e.g. natural gas, fuels used in generators or vehicles)
Emissions from the generation of purchased electricity, heat, cooling and steam (i.e., energy produced outside the organisation’s control boundary but used within the organisation).
Emissions that occur as a result of the activities of the organisation but occur from sources outside the organisation’s control boundary.
Requirement: The direct (Scope 1) and indirect energy (Scope 2) emissions of all organisations in the organisational boundary must be included in the Emissions Boundary.
Requirement: All other (Scope 3) emissions identified as a direct result of the organisation’s operations must be assessed for relevance. This includes indirect emissions outside the operational control (as defined) of the organisation.
Relevance test (adapted from GHG Protocol – Corporate Value Chain (Scope 3) Standard)
You must consider emission sources relevant if at least two of the following criteria are met:
- The emissions from a particular source are likely to be large relative to the organisation’s electricity, stationary energy and fuel emissions.
- The emissions from a particular source contribute to the organisation’s greenhouse gas risk exposure.
- The emissions from a particular source are deemed relevant by key stakeholders.
- The responsible organisation could influence emissions reduction from a particular source.
- The emissions are from outsourced activities previously undertaken within the organisation’s boundary, or from outsourced activities typically undertaken within the boundary for comparable organisations.
Emission sources should be quantified wherever possible, with conservative estimates used where data is unavailable, and non-quantification used only when estimations are not practical.
An emission source can be “non-quantified” in the carbon inventory under the following scenarios:
- Immateriality (i.e. <1 per cent for individual items and no more than 5 per cent collectively).
- Quantification is not cost effective relative to the size of the emission (in this case, an uplift factor* must be included).
- Data is unavailable (a data management plan must be put in place to provide data within five years and an uplift factor* included).
- Initial emissions non-quantified but repairs and replacements quantified.
* An uplift factor is an upwards adjustment to the total carbon inventory to account for relevant emissions, which can’t be reasonably quantified or estimated.