We believe that measuring Greenhouse gas emissions and reductions is extremely important. But many companies are struggling with measuring Greenhouse gas emissions and reductions consistently. Especially, as results from many online tools can differ significantly.

General

In theory, it is no rocket science to calculate the greenhouse gas (GHG) emissions – at least for Scope 1 and 2 of GHG emissions. Once a company has identified its main GHG-relevant activities, e.g. electricity/gas use, vehicle use, business travel, employee commute and waste disposal/recycling, a first estimate for most GHG sources, based on data readily available in the finance department and online, is not a huge problem. However, some Scope 3 categories are not quite as easy to calculate (e.g., use of sold products, purchased goods and services), and when it comes to emission calculations, there are material differences between online calculation engines.

Activity data calculation

Emissions of CO2 – or more precisely, CO2-equivalents, as there are typically other greenhouse gases released in addition to CO2 – are often determined based on “activity data”. In other words, a company must know “how much” of CO2 producing input factors they are using. After identifying all relevant activities releasing GHG emissions, the activity data – the “consumption” per source – must be determined.

Take, for example, a company with a small fleet of passenger cars, fueled by gasoline and diesel engines. Consumption information – “activity information” – in liters of fuel for gasoline and diesel is often available in the monthly fuel card bill, or can be calculated based on information from the credit card bills or the cost posted in finance/accounting. If no other information on the liters of fuel consumed is available, the fuel costs can be a surprisingly accurate proxy to calculate consumption of gasoline and diesel fuels. However, calculating emission data from consumption can be more challenging.

GHG emission calculation

To emphasize this, we have simulated GHG emissions for a hypothetical player with an annual consumption of approx. 6000 liters of diesel fuel. The calculation logic for the GHG footprint seems rather straightforward. With emission factors which are scientifically determined and are readily available online, you can multiply the amount in liters by emission factor to determine your consumption of GHG equivalents. However, cross checking with other engines lead to quite significant deviations.
Most of the differences are stemming from deviations in scope of the various calculation engines. Some online calculators include only scope 1 emissions, i.e. the direct GHG emissions that occur from the car owned by the company (emissions associated with fuel combustion in the diesel engines). Others include also indirect GHG emissions that occur from “well to wheel”, i.e. all emissions related to fuel production, processing, distribution, and use. Obviously, in our diesel fuel example, emissions are produced while extracting petroleum from the earth, refining it, distributing the fuel to gas stations – not only in burning it in vehicles. These additional “indirect” emissions are contained in Scope 3, but not in Scope 1 emissions of our diesel example. Other, often less relevant deviations between different calculators can be explained by differences in emissions factors. However, these differences are minor in comparison to the “scope-driven” variances. Given that these differences of calculators are not always obvious and documented well, this can render especially the consistency of GHG emissions tracking and reporting more challenging.