A guide for businesses. Greenhouse Gas (GHG) Reporting
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1 A guide for businesses Greenhouse Gas (GHG) Reporting
2 Summary Greenhouse Gas (GHG) regulation Global warming became everyone s business when the Climate Change Act (2008) set a goal of reducing the UK s greenhouse gas by at least 80% by 2050¹. And since October 2013, all UK quoted companies must now report on their greenhouse emissions under the Companies Act 2006 (Strategic Reports and Directors Reports.) -80% Greenhouse Gas Sulphur hexafluoride (SF6) Nitrous Oxide (N2O) Does it affect your business? The filing of a Greenhouse Gas (GHG) report, as part of a company s annual Directors Report, became mandatory from 1st October 2013 for all UK incorporated companies that are listed: on the main market of the London Stock Exchange; Carbon Dioxide (CO2) Perfluorocarbons (PFCs) Methane (CH4) Hydrofluorocarbons (HFCs) on a European Economic Area market; or whose shares are dealing on the New York Stock Exchange or NASDAQ. All other companies, including small businesses, are encouraged to voluntarily report their emissions too. What do you need to report? The GHG Protocol Corporate Standard provides guidance for companies preparing a GHG emissions inventory of the six greenhouse gases
3 It s not mandatory for me, why should I bother? There are many good reasons for reporting other than your company s legal requirement to do so: By calculating your current GHG emissions, you can start to identify where future reductions could be made and set targets to keep you on track Ultimately, reducing your emissions will save your business money Demonstrating a commitment to minimising your company s environmental impact will show your customers, and other stakeholders, that you take your corporate social responsibilities seriously. Defra (the UK Department for Environment, Food and Rural Affairs) estimates that GHG reporting will contribute to saving four million tonnes of CO 2 emissions by 2021². Keep on track Companies must file a GHG report every year this information will become part of the annual Directors Report You must provide data for the previous 12 month period Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Plan ahead Even if your year end is some way off, start thinking now about collecting your data and the methodology you will use to report your emissions Sept All companies with reporting years ending on or after 30 September 2013 must comply with the new GHG reporting legislation (which came into force on 1 October 2013.)
4 How should organisations report their emissions? Your Facilities or Energy Manager will probably take responsibility for compiling the GHG report and ensuring it complies with the reporting regulations. Here are some steps to follow: Before you start Use these steps to help you plan how you will work through the process: 1. Determine the boundaries of your organisation For companies who own 100% of the assets they operate, reporting will be straight-forward: you would report on the impact of everything you own and operate. Your organisation may have a more complex structure with some entities either part-owned or owned but not operated by you. To help you decide your approach to boundary setting, refer to the Climate Disclosure Standard Board s Climate Change Reporting Framework (CCRF) 2. Determine the 12-month period for which you need to collect data The reporting period should be the same as your financial year so that you can easily compare your environmental impact with your financial performance. 3. Outline your organisation s key environmental impacts You need to understand the extent of your organisations direct impacts. These will fall into one or more of six categories: greenhouse gases; water; waste; materials and resource efficiency; biodiversity/ ecosystem services; emissions to air, land and water. You must identify and explain which are relevant and how they are defined. 4. Measure this impact You should develop and report at last three Key Performance Indicators (KPIs) associated with your key environmental impacts. To collect the best quality data, focus on the most important sources such as magnitude or size, financial significance or importance to your stakeholders. It is important to ensure the data collected from different departments within your organisation is comparable. You need to agree a common reporting format, which may involve creating standard spreadsheet templates or entering data into secure internet or intranet databases. Using an Environmental Management System (EMS) is widely recognised as a reliable way to ensure good data management. 5. Report your findings The information you present in your final report should be balanced and transparent. It should include: Your organisation s climate strategy to provide context to the data you are reporting. Also include the process you followed to create your report, a summary of the stages outlined above; Outline the risks and opportunities that climate change poses to your organisation. Demonstrate your progress against targets, including both successes and any setbacks. Outline how you are tackling any issues or how you plan to address them; And don t forget With the exception of the first mandatory reporting year, you must include the emissions data from the previous year with your latest data. Emissions must be shown as an intensity ratio or ratios, such as emissions per unit of sales revenue or floor space. If you are a listed company, the new legislation requires you to report on your environmental impact in your annual report. This will form part of a new section called the Strategic Report.
5 Conversion Factors Your organisation uses energy in a variety of ways, all of which are measured in different units such as kilowatts and litres. For reporting purposes, all the energy you consume must be converted into common units of kg carbon dioxide equivalent (kgco 2 e) **. You can do this by using GHG conversion factors. The government has created a useful online tool to help businesses convert their activities, such as fuel consumption and generated waste, to carbon emissions. Click here to use the tool: Example: To convert from litres of petrol to kgco 2 e emissions multiply by litres x = kgco 2 e
6 What makes an effective report? Your report should provide a clear overview of the operations for which emissions data has been reported. This checklist will help you: Relevance the data you report must reflect your organisation s environmental impact Accuracy take the time to ensure that the information you report is correct Quantitative any KPIs (key performance indicators) you use must be measurable Completeness be thorough by quantifying and reporting on all sources of environmental impact within your business. Your report must include any exclusions and the reasons why they have not been included Consistency use consistent methodologies so that you can assess and make valid comparisons of your emissions over time Comparativeness use accepted KPIs over your company s version of measurement indicators. Transparency this is key to producing a thorough report. Keep a log of all calculations so you can explain how your data was compiled. Go Global Remember that you need to report all emission sources for your company, not just those in the UK. To view sample GHG reports click here: file/206392/pb13944-env-reporting-guidance.pdf Further information and help on GHG reporting For further information on the GHG Reporting Guidelines visit: uploads/attachment_data/file/206392/pb13944-env-reporting-guidance.pdf A guide for small businesses on how to measure and report greenhouse gas emissions : government/uploads/system/uploads/attachment_data/file/69494/pb13310-ghg-small-business-guide.pdf References/sources: ¹ ²
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