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Greenhouse Gas Footprints The low carbon economy is coming By Bradley Fowler
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exist in compiling a carbon footprint. Just as with financial accounting, organizations are advised to seek outside help in setting up a carbon accounting and reporting system.
What is a carbon footprint? Also known as a greenhouse gas inventory, a carbon footprint is an estimate of all the greenhouse gas (“carbon”) emissions from an organization’s operations. These are categorized as: Direct emissions (also called “Scope 1”) that physically occur at sites under the direct ownership or control of the organization (e.g., on-site combustion of fossil fuels for heating). Energy indirect emissions (“Scope 2”) that are due to imported electricity, heating or cooling, where the actual emission source is under another organization’s control (e.g., grid electricity consumption). Other indirect emissions (“Scope 3”) that include all other emissions related to the organization (e.g. business travel, emissions associated with consumables, water use, waste disposal, etc.). Reporting of these emissions is voluntary under established practice and organizations need to decide which emissions are relevant. Standards and guidelines have been established to guide organizations in identifying emissions sources and estimating the associated emissions. However, the field continues to evolve and many complexities
Know your audience A greenhouse gas inventory must be designed to meet the needs of its audience. A key question is who will be interested in the results and what will they want to learn? Interested parties have diverse needs and the inventory must reflect these. Likely audiences include: Environmental regulators: Are you obliged to report your emissions under environmental legislation? If so, it is likely that the regulations will specify in some detail how the inventory should be compiled. Most regulations in Canada are currently targeted at medium-to-large direct emitters of greenhouse gases on a facility basis. Typically, the majority of building emissions are from grid electricity consumption; these are indirect, since the actual emissions occur at the generating facility, and in most cases are not likely to exceed current emissions thresholds for reporting, although there are likely some exceptions. However, reporting regulations are evolving and a potential future switch from facility-based to organization-based reporting thresholds would likely include organizations with control of many buildings. Securities regulators: The stance of securities regulators has recently shifted to be far more pro-active in requiring that risks associated with both greenhouse gas emissions in particular and climate change in general be disclosed. If your organization is faced with material f inancial risks associated with climate change then they may need to be disclosed. As well as potential liabilities arising directly from emissions and the costs to reduce them, this
The low carbon economy is coming. This will affect the way all businesses operate. Risks and opportunities abound. Faced with a shif ting landscape of government regulations and stakeholder interests, is your company ready to manage these risks and seize the opportunities as they arise? The first step in answering this question is to understand your carbon footprint and identify who is interested in it and why it matters to them. Once the footprint is understood and the stakeholders are identified, it is possible to develop a strategy to manage the associated risks and to develop opportunities to realize value for your business.
28 Building Strategies & Sustainability
includes risks such as exposure to severe weather events and flooding due to the changing climate, increases in the cost of insurance or difficulties obtaining insurance, and so on. Investors: Investors in public companies are increasingly interested in the greenhouse gas emissions and carbon management strategies of those companies. Ethical investors have a special interest in this area, but investors in general are coming to expect that companies understand and manage their carbon footprint. Public sector organizations are likely to face similar scrutiny. Many governments internationally are adopting emissions or energy reduction targets for their own operations, and buildings are a major contributor to these emissions. Tenants: Efforts to reduce your emissions will have an impact on your tenants. Measures such as energy efficiency may be beneficial for both parties. There is a need for a dialogue to understand how the carbon management goals of both tenants and manager/owner can be synchronized to realize value for both parties. Employees: Increasingly, employees expect to see their personal ideals reflected in the organizations they work for. With increasing public awareness and concern about climate change -- particularly among t he you n g er g ener at ion -- c a rb on management can be beneficial for recruitment and lead to improved employee satisfaction and retention. The local community: Your carbon inventory and management plan can support activities to promote your organization in the local community. What is a greenhouse gas? Greenhouse gases (GHGs) are responsible for causing global warming and climate change. The major GHGs (defined under the Kyoto protocol) are carbon dioxide