Accounting for Greenhouse Gas (GHG) emissions is essential to enable companies to measure their progress towards mitigating their negative impact on climate change.
GHGs are the gases in the Earth's atmosphere that trap heat, and the increase in anthropogenic emissions is causing the world to heat up at an unprecedented rate. Carbon dioxide (CO2) makes up the vast majority of GHG emissions within the real estate sector, but smaller amounts of methane (CH4), nitrous oxide (N2O) and fluorinated gases are also emitted through activities such as air conditioning.
Emissions are categorised into Scope 1,2 and 3:
- Scope 1 is direct and controlled emissions from activities
- Scope 2 is indirect emissions from electricity, heat or steam purchased and used
- Scope 3 is all other indirect emissions outside of ownership or control, such as purchased products and services. Owing to the complexity of Scope 3 emissions, reporting remains limited, usually to business travel.
Broadly, GHG emissions accounting steps include:
- Confirm reporting boundaries and categories
- Data collection
- Data checks and analysis, addressing gaps and anomalies
- GHG emissions calculation
- Disclose GHG report
Various regulatory compliance and voluntary initiatives govern GHG emissions calculations and inventories, which include:
GHG Protocol corporate accounting and reporting standard
This standard provides comprehensive and detailed sector-specific guidance and calculation methods to develop corporate-level GHG emissions inventories. Its purpose is to ensure that calculations represent a faithful, true and fair account of a company's emissions, by being relevant, complete, consistent, transparent and accurate.
ISO 14064
Based upon the same principles as the GHG Protocol, but more generic and concise, ISO 14064 establishes minimum standards for GHG quantification, monitoring, reporting, and verification. Both standards are compatible and complementary; you can use the GHG Protocol to identify and calculate your GHG emissions and removals and use the ISO 14064 to report and verify them.
Streamlined energy and carbon reporting (SECR)
SECR policy came into force on 1 April 2019, and requires companies in scope to report on their energy consumption and associated GHG emissions within their annual Directors’ Report. This legislation supports the UK Government’s plans to cut emissions by 78 per cent by 2035 and encourages businesses to quantify and reduce energy consumption in a more consistent and comparable manner.
Carbon disclosure project (CDP)
The CDP, previously known as the Carbon Disclosure Project, runs a global environmental disclosure system supporting companies, cities, states and regions to measure and manage their risks and opportunities on climate change, water security and deforestation. CDP takes the information supplied in its annual reporting process and publicly scores companies on their performance.
Science-based targets (SBT)
The Science Based Targets Initiative (SBTi) provides companies with guidance and verification to reduce emissions in line with the Paris Agreement, to limit warming to less than 1.5°C / 2°C compared to pre-industrial temperatures. This aims to prevent the worst impacts of climate change and future-proof business growth. Since 2015, more than 3,000 organisation have worked with SBTi to reduce their emissions in line with the Paris agreement including Savills.
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