EN AR

GHG Inventory Reporting Guide

Comprehensive Guide to ISO 14064-1 & GHG Protocol Standards

Introduction
Key Standards
Inventory Process
Reporting
Reference Data
🌍

What is Climate Change?

Climate change refers to long-term shifts in temperatures and weather patterns. Since the 1800s, human activities have been the main driver, primarily due to burning fossil fuels like coal, oil, and gas.

These activities generate greenhouse gas (GHG) emissions that trap the sun's heat, raising global temperatures. Main GHGs include carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O).

📊

Why Monitor Your Carbon Footprint?

  • ✓ Risk Management: Identify exposure to carbon taxes and regulations
  • ✓ Cost Savings: Find energy inefficiencies and reduce costs
  • ✓ Stakeholder Demand: Meet investor and customer expectations
  • ✓ Competitive Advantage: Enhance brand reputation
  • ✓ Corporate Responsibility: Be a sustainable business
💼

The Strategic Imperative

GHG quantification has evolved from voluntary CSR to a fundamental pillar of enterprise risk management, regulatory compliance, and strategic capital allocation.

Organizations must report emissions with the same rigor and auditable precision applied to financial statements, using standardized frameworks like the GHG Protocol and ISO 14064-1.

🌐 The GHG Protocol

Developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD). The most widely used international accounting tool for corporate GHG emissions.

Key Features:

  • Accounting principles: Relevance, Completeness, Consistency, Transparency, Accuracy
  • Scopes framework (1, 2, and 3)
  • Guidance on organizational and operational boundaries

📋 ISO 14064-1:2018

Part of the ISO 14000 environmental management standards family. Specifies principles and requirements for quantification and reporting of GHG emissions and removals at the organization level.

Key Features:

  • Aligned with GHG Protocol, ensuring compatibility
  • Framework for designing and managing GHG inventories
  • Basis for third-party verification and credibility

Understanding Emission Scopes

Scope 1: Direct Emissions

Emissions from sources owned or controlled by your organization.

Examples:
  • Company-owned vehicles and equipment
  • On-site fuel combustion
  • Fugitive emissions from refrigeration

7-Step GHG Inventory Process

1

Set Organizational Boundaries

Define what your company owns for accounting purposes. Choose from:

  • Equity Share: Account based on ownership percentage
  • Control Approach: Financial or Operational control
2

Set Operational Boundaries

Identify all emission sources and categorize into Scope 1 (Direct), Scope 2 (Indirect Energy), and Scope 3 (Value Chain). Scopes 1 & 2 are mandatory; Scope 3 is recommended.

3

Choose a Base Year

Select a historical 12-month period as your benchmark for tracking progress. Define a base year recalculation policy for significant structural changes (mergers, acquisitions, divestitures).

4

Collect Activity Data

Gather quantitative data for the reporting period. Examples include:

  • Liters of fuel consumed
  • Kilowatt-hours of electricity purchased
  • Kilometers of business travel
  • Tonnes of waste generated
5

Select Emission Factors

An emission factor (EF) converts activity data into GHG emissions (tCO₂e). Use credible sources like IPCC, EPA, or national government agencies.

Formula: Activity Data × Emission Factor = Emissions (tCO₂e)
6

Calculate & Consolidate Emissions

Apply the formula to every emission source. Convert all GHGs to CO₂-equivalent using Global Warming Potential (GWP) values. Sum all calculations by Scope and business unit.

7

Report & Verify

Compile findings into a formal GHG report compliant with ISO 14064-1 and GHG Protocol. Consider third-party verification for credibility and stakeholder trust.

After Your Inventory: Next Steps

📄

1. GHG Report

Compile a formal report including:

  • Organization description and boundaries
  • Reporting period and base year
  • Total emissions by Scope (1, 2, 3)
  • Methodologies and emission factors
  • Exclusions and justifications
✅

2. Verification (Assurance)

Build stakeholder trust through independent third-party verification:

  • Limited Assurance: No evidence of errors found
  • Reasonable Assurance: Positive confirmation of accuracy

Verification is mandatory for many regulatory programs.

📉

3. Manage & Reduce

Create a targeted reduction strategy:

  • Set science-based reduction targets
  • Identify emission hotspots
  • Implement energy efficiency projects
  • Switch to renewable energy
  • Engage suppliers for Scope 3 reduction
  • Track progress annually

Global Warming Potential (GWP) Values

100-year time horizon (IPCC AR6)

Gas Formula Primary Sources GWP (100-yr)
Carbon Dioxide CO₂ Fossil fuel combustion, deforestation 1
Methane CH₄ Agriculture, landfills, oil & gas 27-30
Nitrous Oxide N₂O Fertilizers, industrial combustion 273
Hydrofluorocarbons HFCs Refrigerants, aerosols 100s - 10,000s
Perfluorocarbons PFCs Aluminum production, semiconductors 7,000 - 11,000
Sulfur Hexafluoride SF₆ Electrical transmission equipment 25,200
Nitrogen Trifluoride NF₃ Semiconductor manufacturing 17,400

GHG Protocol vs ISO 14064-1 Comparison

Feature GHG Protocol ISO 14064-1
Primary Objective Accounting and reporting guidance Quantification, reporting, and verification requirements
Terminology Scopes 1, 2, and 3 Categories 1-6
Scope 3 / Indirects Optional (recommended) Mandatory for significant emissions
Verification Separate guidance exists Designed specifically for audit
Biogenic Carbon Reported separately Reported separately with detailed requirements