What are Greenhouse Gas (GHG) Emissions?
Greenhouse gases (GHG) are gases that trap heat in the atmosphere, contributing to the increasing rate of global warming and climate change.
These include Carbon dioxide (CO2), Methane (CH4), and other GHGs, which are emitted when we burn fossil fuels and produce materials such as steel, cement, and plastics. The main human activity that emits CO2 is the combustion of fossil fuels for energy and transportation.
This comes primarily from the burning of fossil fuels to generate energy in the industry, building, household, and transport sectors.
Why do businesses need to calculate their GHG Emissions and report them?
In recent years, regulations mandating businesses to report and reduce their GHG emissions have risen globally. The warming of the planet hinges on countries and businesses to take decisive action in terms of meeting their climate goals and GHG reduction targets, with the earth set to warm by 3.1°C without greater action.
In Asia, countries have been rolling out ISSB-aligned reporting requirements starting with listed companies, from FY2025.
The way businesses operate has also changed, with sustainability and ESG moving up the priority list – a report by Boston Consulting Group revealed that 85% of investors are set to prioritise sustainability even more, pushing portfolio companies to adopt stronger sustainability frameworks.
Click here for a comprehensive guide to carbon calculations and reporting.
Emission Factors and their role in GHG Emission Calculations
Basic formula for calculating emissions using Emission Factors.
An Emission Factor (EF) is a representative value that quantifies the GHGs released into the atmosphere by a specific activity. EFs are critical as they are used in a basic formula to estimate the GHG emissions of the corresponding activity by multiplying them by the activity data.
Try out ESGpedia’s carbon calculator here. Contact us for a full demo.
For instance, ESGpedia’s carbon calculator is built to calculate Scope 1, 2, and 3 emissions of companies in accordance with ISO14064 methodologies and the GHG Protocol. The carbon calculator uses a variety of methods to calculate businesses’ and their supply chains’ emissions based on an extensive database of EFs, depending on what is most suitable and accurate.
Though there is no fixed set of EFs to use in GHG calculations, internationally recognised standards, such as the GHG Protocol which provide extensive guides on how to calculate emissions, recommend that businesses use supplier-specific EFs for the most accurate estimates.
This, however, poses a challenge as most suppliers would not have the specific EFs available, and attaining such data from suppliers is typically an obstacle for many companies today.
Where can I find Emission Factors?
- Geography-specific
- EFs can represent average emissions rate for a particular activity occurring at a specific national or regional scale
- Industry-specific
- Specific EFs representing industry-specific activities such as construction materials, maritime activities, agricultural practices, etc.
- Unit-specific, which includes
- Activity-based
- EFs estimating the emissions associated with a specific activity, such as the number of kilometres travelled by a vehicle
- Spend-based
- EFs that estimate emissions based on the monetary value of goods and services spent by the organisation
- And other types of EFs such as product-specific ones
- Activity-based
Emission factors are found in databases created by government agencies and can be accessed via paid subscriptions, including but not limited to:
A few examples of well-known Emission Factor databases/registries.
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- The Intergovernmental Panel on Climate Change (IPCC)’s Global Warming Potential (GWP) Values
- UK Department for Environment, Food & Rural Affairs (DEFRA)’s Emission Factors
- The United States Environmental Protection Agency (EPA) GHG Emission Factors Hub
- Department of Environment and Climate Change Canada (ECCC)
- Ecoinvent which covers datapoints across Asia and is available on a paid basis
- The Global Resource Input-Output Assessment (GLORIA) database
- Australian Government Department of Climate Change, Energy, the Environment and Water (DCCEEW)’s National Greenhouse Accounts Factors
- New Zealand-specific emission factors published by the Ministry for the Environment
- Singapore Emission Factors Registry (SEFR), a public-private initiative led by the Singapore Business Foundation (SBF)
By using a standardised method of calculating and reporting emissions, companies can better pinpoint areas in which they can reduce their carbon emissions and contribute to the global emissions-reduction movement. This also allows companies to benchmark against their peers and national standards, ensuring compliance while improving on their carbon reduction strategies.
Businesses may choose to tap on their localised EF databases depending on their country of operations and data available – for instance, ESGpedia has digitally empowered Singapore-based Se-cure Waste Management (SWM) in generating their first Sustainability Report using EFs on the Singapore Emission Factors Registry (SEFR), which has been integrated onto the ESGpedia platform for localised, more accurate emission measurement and reporting for Singapore-based businesses. Read Press Release.
Common challenges faced in GHG Calculations and using Emission Factors
Some challenges faced by businesses in finding the right database to use include:
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- Inconsistent units of measurement on different databases, requiring conversion to align with the company’s data
- Not having compatible data available for calculations – for instance, supplier emissions or data for Scope 3 calculations
- Tapping on different databases over time to do calculation and reporting, which may result in discrepancies between different years’ reports
Though some government agencies may publish industry-specific databases, for instance, the National Australian Built Environment Rating System (NABERS) which launched its national emission factors database for measuring the embodied carbon of buildings in Australia, such industry-specific databases are not as widely available.
Overcoming Challenges in GHG Calculations
Reporting platforms like ESGpedia help businesses overcome these challenges by aggregating and integrating numerous types of EF databases, including both industry-specific, country-specific, and paid databases like Ecoinvent for clients to use.
ESGpedia’s platform contains hyperlocalised EFs which allows countries to choose their source from a range of databases/registries based on business requirements as well as auto-maps and applies localised EFs according to their country of operations.
For example, ESGpedia is linked to over 70 credible EF databases globally and now has more than 300,000 EFs across 46 countries, covering over 1,100 product categories, mapping every part of the value chain and product life cycle. This aims to provide our clients with the most comprehensive and streamlined calculation and reporting process. The platform is constantly updated with the latest EFs to empower businesses to report accurately.
ESGpedia’s platform is also built to automatically convert and map EFs in consistent units according to the available activity data for easy reporting, mitigating the highly manual and time-consuming process.
In addition to challenges in data aggregation and consistency in units of measurement, using different databases of EFs could affect a company’s baseline or progress in GHG emission reduction. Switching between databases could affect the accuracy of calculations due to different EF calculation methodologies, which could potentially misrepresent the business’s emissions on a yearly basis and targets set.
A solution would be to engage a reporting platform for consistent calculations and reports – ESGpedia’s platform automatically maps localised EFs for businesses with operations solely based in one country and uses industry-specific or supplier EFs databases for supply chain calculations for the most accurate representation.
Industry-Specific Emission Factors
While it is possible for businesses to do their own GHG calculations and reporting, not all would have the capacity to handle these rigorous processes and sheer amounts of data. Companies which require industry-specific EFs may also face the challenge of obtaining them from their local databases.
One example would be businesses in the built environment, which would require companies to obtain suppliers’ data and source for specific data such as embodied carbon and product EFs. In this case, it is crucial for companies to have access to comprehensive, industry-specific data and EFs – which reporting platforms are likely to have integrated.
ESGpedia has enabled companies with tools like our Supplier Engagement Module, which helps companies in onboarding and engaging suppliers in calculating emissions, as well as industry-specific or localised EFs in our database for the most accurate calculations, which are automatically mapped to the company’s activity data.
For instance, as the newly launched Singapore Emission Factors Registry (SEFR) included building equipment and material EFs from the Singapore Green Building Council, ESGpedia automatically tapped on these factors to empower the built environment in calculating their construction emissions, down to the granular emissions.
Product Emission Factors
Product-specific EFs are values which quantify GHGs emitted by a specific product. These EFs are often used by companies in supplier-specific calculation methods to calculate emissions from purchased goods and services.
Keep a look out for more information on product-specific emission factors in subsequent industry insights published in our newsroom!
Ensuring Credible GHG Calculation and Reporting
Standardised Emission Factors across geographic regions and industries are crucial in allowing companies to align themselves with international standards in reporting and set meaningful targets for GHG emission reduction.
While there is no predetermined standard or framework that should be followed by businesses, global standards such as the GHG Protocol offer guidance to businesses in preparing for a GHG emissions inventory, standardising the measurement, management, and reporting of GHG emissions generated by a company.
Businesses can engage reporting platforms to help with the GHG accounting process, which would equip and empower them with important tools and data such as a comprehensive registry of EFs compiled from different databases, to ensure credible GHG accounting and compliance.
Contact us to find out how you can accelerate your ESG journey with GHG calculation across Scopes 1, 2, and 3 using credible and accurate Emission Factors according to your business requirements, along with comprehensive ESG reporting and more.