SCHOOL OF COMPUTING, ENGINEERING AND BUILT ENVIRONMENT

22/23 A - Climate Change and Carbon Management

MMH227053-22-A-GLAS

Trimester A 2022.

Coursework 2: DEVELOPING AN ORGANISATIONAL GHG INVENTORY

Student ID: S2147626

Deadline for Submission: 12th December 2022.

Presented By: IRABOR EFE FRANKLIN

 INTRODUCTION

Efesco Irabz Co. Ltd was created in 2011 in Glasgow to build and manage properties of the best
quality and standard. We offer professional real estate services to aspiring property owners,
whether corporate bodies or individuals, in the areas of real estate development,
marketing/acquisition, and property management.

Deliverables include an annual GHG inventory report outlining findings; an overview;

methodology; data constraints; and suggestions for improvement for a senior leadership team;
the overall goal of this report is to develop a robust Organization greenhouse gas (GHG)
inventory using given real-world evidence. The worldwide standard for measuring, reporting,
and verifying greenhouse gas emissions, ISO 14064, is extensively described here. It will define
the broad structure of the standard and highlight its most important features. ISO 14064 is a
technical standard for climate policy that is optional. ISO 14064 was developed by the
International Organization for Standardization (ISO) to facilitate the creation of GHG inventories
for use by private companies and government agencies, as well as to provide a foundation for
policymakers and programme developers to use in developing initiatives to combat the global
environmental crisis known as climate change.

Efesco Irabz Co. Ltd is measuring GHG emissions from their commercial operations due to the
physical consequences of climate change and the resulting changes in market circumstances and
customer choices. In recent years, the evaluation and management of current and future climate
change-related consequences have emerged as critical components of firm strategy and risk
management (Fischer, 2012).

Governments, investors, and consumers, in general, are increasingly asking that firms like Efesco
Irabz Co. Ltd discuss their climate change plans with them.  For example, in May 2011, the
Organization for Economic Cooperation and Development (OECD) amended its Guidelines for
Transnational Companies to encourage firms to make available environmental data that meet
tight standards, citing the "case of greenhouse gas emissions" as an example. This was done in
response to the increased need among stakeholders for high standards of corporate governance.
As a consequence of government demand for climate change data, companies are either forced or
encouraged to track their GHG emissions via the deployment of either mandated or optional
government services (or through the growing non-governmental efforts known as "Climate
Change Activism"). Emissions may be priced in several ways, including carbon taxes and
pollution trade deals, but similar obligations can be included in environmental and other non-
financial reporting regulations (GRI, 2011).

This research is primarily concerned with data on greenhouse gas (GHG) emissions from
companies and other organisations that have been submitted to government-run databases. This
study seems to be linked to current studies on carbon footprints. With the development of
reporting programmes, the number of enterprises revealing their GHG emissions has increased.
The EU ETS (European Union Emissions Trading System) contains CO2 emissions from
approximately 11,000 facilities and is already in use in 30 countries (the 27 EU Member States
plus Iceland, Liechtenstein, and Norway). Specific activities, such as hydrogen sulphide
emissions, are also specified. The facilities we'll be addressing produce more than half of the
greenhouse gases in the European Union, with carbon dioxide accounting for 40% of those
emissions (Haigh & Shapiro, 2011).

There were over 11,000 businesses in Japan that reported their 2009 CO2 emissions to the
government via the country's required GHG Accounting and Reporting system, for a total of
643.5 million tonnes of CO2-e. This number accounts for more than half of Japan's total
emissions (about 1.27 billion tonnes). The Environmental Protection Agency (EPA) issued
greenhouse gas (GHG) figures for 2010 from industrial facilities and suppliers of certain fossil
fuels and industrial gases in January 2012. The data, which was generated using reports from
6,700 different organisations, may account for up to 80% of total GHG emissions in the United
States (Japan for Sustainability, 2006).

Corporate Carbon Footprint Scope and Drivers

When it comes to reducing carbon emissions, the international community should set the pace.
For centuries, experts have warned that inaction would lead to socioeconomic calamities such as
widespread famine, mass migration as a result of flooding, and the implosion of financial
companies. Instead of treating sustainability as an afterthought or a corporate social
responsibility project, businesses should make it a top priority. Business enterprises should
lessen their environmental impact. Taking stock of their emissions is the first step in cutting
down on their carbon impact (Downie and Stubbs, 2012).

Several public statements from executives in the business attest to the growing significance of
companies' carbon footprints. Apple, for instance, has promised to fully decarbonize its supply
chain by 2030. Companies including Starbucks, Microsoft, Volkswagen, and Adidas, together
with eight others of similar size, have formed Transform to Net Zero to hasten the worldwide
transition to a carbon-neutral economy (Downie and Stubbs, 2012).

Carbon emissions make up about 81% of overall GHG emissions, with a significant portion
coming from commercial operations. To rephrase, 10% of total GHG emissions are from
methane, 7% from nitrous oxide, and 3% from halogenated gases. The first and most important
step in reducing a company's carbon dioxide emissions is monitoring and reporting those
emissions. To do this, businesses must divide their environmental impact into three categories.
Most businesses adhere to the standards outlined in the GHG Agreement, and this agreement
classifies their level of carbon pollution into one of three categories based on their size, industry,
and level of compliance. Since Scopes 1 and 2 must be reported regardless of outcomes, Scope 3
is completely subjective and hence the most difficult to track. Yet, businesses with strong
reporting in all three areas will have a significant competitive edge (Lee, 2011).

Scheme 1, 2, 3 scope emissions Credit: Plan A based on GHG protocol

Scope 1 and 2 emissions are those that are actively or significantly influenced by the company,
whereas Scope 3 emissions are those that are caused by the operational procedures of
the business but are produced by other entities (Telang, 2012). 

Scope 1 emissions: Scope 1 alludes to emissions from facilities that the corporation owns or
governs actively; therefore the gasoline of a vehicle of non-electric automobiles would come
under this category.

Scope 2 emissions: Scope 2 emissions are those that occur naturally as a result of the business's
energy procurement and consumption. This would include, in the case of the electric fleet
vehicles that can be recharged, the emissions from the generation of the electricity required to
replenish their batteries (Telang, 2012). 

Scope 3 emissions: Scope 3 comprises emissions that are not directly created by the company or
the outcome of activities impacting the firm's assets, but excludes emissions for which the firm is
indirectly responsible throughout the manufacturing process. One such example is the purchase,
use, and eventual disposal of things offered by such companies. Emissions in Scope 3 originate
in locations other than Scopes 1 and 2, which are determined by their closeness to those two
areas (Larson and Teichman, 2009).

Key performance indicator (KPI) that businesses use to measure sustainability

The effectiveness of a company's strategy execution may be determined by comparing key

performance indicators (KPIs) to the organization's stated objectives. Businesses no longer have
to depend on labour-intensive, time-consuming manual processes to analyse and retain their data
as digitalization advances quickly across sectors (Jan et al., 2021). The following are some Key
Performance Indicators (KPIs) that companies are currently adopting to analyse their
environmental impact:

Carbon footprint: One of the most important KPIs to track is a company's carbon footprint
since this metric considers data from several sources, including the company itself, its clients,
and its suppliers. Businesses can gauge the climate impact of their products and services
owing to the availability of emissions data across Scopes 1, 2, and 3 (Jan et al., 2021).
Consumption of Energy: Reduce the amount of time it takes to finish a task. Understanding
one's firm's energy requirements may lead to cost reductions and better power production. The
IIoT may give detailed information on industrial energy consumption, and other kinds of
virtualization are more than capable of analysing the power requirements of diverse sectors and
activities (Telang, 2012).

Risk to climate change for businesses

Climate change is causing new challenges for businesses and industries across the globe. Supply
chain disruptions, labour unrest, declining energy efficiency in assembly and other activities,
legal responsibility for natural catastrophes, and other climate-related issues are all legitimate
worries for the automobile industry. Climate change's possible effects on employees should be
properly studied (David et al., 2019). It is also worth mentioning that industries such as
agriculture, forestry, and marine are very vulnerable to climate change. In other words, the
natural environment is critical to the success of these corporate ventures. While all sectors of the
economy are vulnerable to climate change, the hotel, retail, and manufacturing sectors are
particularly vulnerable (David et al., 2019).

PROCESS FUNDAMENTALS FLOWCHART

A process flowchart can assist illustrate how the policy's duties and objectives relate to one
another, and the activities required to achieve those objectives. Each "Process" should be
described by its Objectives (Outcomes), Key Performance Indicators (KPIs), Components (data
or "expected output" from other "Strategies"), Services / Responsibilities (sub-Processes),
Starting and Ending processes (Ringwall), Risks, and Boundaries. The first stage in building a
complete inventory is determining how firms now report their greenhouse gas emissions.
Second, choose a benchmark year to define organisational and functional borders. Finally,
assemble data and calculate GHG output. The fourth step is to develop a GHG inventory
management strategy to standardise data collection, define a decarbonization goal, and report on
progress towards the objective.
 (Lee and Klassen, 2015)

a. ISO 14064 AND ENVIRONMENTAL MANAGEMENT SYSTEMS

ISO 14064 is divided into three parts that cover a broad variety of specific fields. The standard's
first part is titled "Specification with organisational suggestions for measuring and reporting
greenhouse gas emissions and removals." The bottom-up technique used to collect, aggregate,
and monitor greenhouse gas emissions from organisations such as enterprises is described in this
part of the standard. Section 2 of the standard explains how to calculate and report the number of
emissions saved by a specific project.

Because it is more concerned with internal stock than the project-based accounting system
utilised here. Finally, "Specification with advice for the quality assurance of greenhouse gas
disclosures" defines the quality control techniques for these declarations. Part 2 of the standard
addresses verification mechanisms for greenhouse gas statements, such as an organization's
inventory, regardless of whether the inventory was prepared in compliance with Part 1 of the
standard. This type of verification is relevant whether the evaluation is performed by an
independent third-party auditor or by an organization's internal auditors (Aristizabal et al., 2021).
ISO 14064 GHG Inventory Standard Principles

The principles and standards for greenhouse gas inventory planning, implementation,
administration, and monitoring are laid forth in this article. It includes guidelines for establishing
limits on GHG emissions and removals, methods for measuring these numbers, and accounts of
what businesses are doing to better control their greenhouse gas output. The Kyoto Protocol is to
blame for these regulations. It also details the firm's responsibilities regarding verification
activities, as well as the needs for, and details on, inventory quality control, certification, and
corporate governance (Wakabayashia and Arimurac, 2016).

• The ISO 14064-2 criteria are used to measure, characterised, and report project
emissions. It is also useful for setting benchmarks. The major focus is on projects that try
to minimise greenhouse gas emissions or increase atmospheric removal rates. It serves as
the foundation for evaluating and verifying actions to minimise greenhouse gas emissions
(Walsh and Dodds, 2017).
• ISO 14064-3 defines the standards for validating greenhouse gas claims made in the
context of greenhouse gas inventories, greenhouse gas projects, and product-level carbon
footprints. GHG statements for corporations, projects, and products are examined and
analysed, and the verification and validation techniques are detailed (Walsh and Dodds,
2017).

Fig1: Relationship among the ISO 14060 family of GHG standards

Set System Limits and Create an Inventory of Greenhouse Gases: The first stage is to define
the system boundaries for the greenhouse gas (GHG) inventory. Companies with more detailed
strategies are more likely to reduce greenhouse gas emissions and related costs. Many variables,
including industry, product line, innovation pace, and so on, may contribute to global warming
and therefore to greenhouse gas emissions. Decide which factors are critical and may have a
substantial impact on the CO2 reserve. How influential these processes are, and how much
influence does the company have over them will be examined from Efesco Irabz Co. Ltd.
division (Lee, 2012).

Find the values for utilisation: Discover How Much Items Cost To Consume Carbon footprint
assessments need accurate information on the company's consumption patterns. All operational
activities, including energy and material usage, should be monitored and documented. The
border settings govern what happens outside the company, such as transportation by third parties,
rubbish disposal, and other supply chain-related operations. Precision and high qualities are
necessary. Find inaccurate information or missing parts. Industry references may be used to
validate the correctness of the data obtained (Lee, 2012).

Feedback on the creation of a climate strategy, mitigation targets, and metrics: When it
comes to maintaining a profitable company, there's more at risk than the absolute quantities of
carbon dioxide equivalents. Sustainable practices and environmental preservation should be
reflected in the company's overall strategy. Maintaining a competitive edge and capitalising on
opportunities given by a changing environment requires the incorporation of climate change
issues into the business's entire strategy (Lee and Klassen, 2015).

Methods for lowering carbon footprint

There are several methods of lowering carbon footprints and they are as follows:

Use a cleaning agent: Cars may lose power and put out more pollution if harmful deposits build
up in the engine over time. Cleaning the fuel system with a chemical additive will get rid of the
deposits and lower emissions. It might be worthwhile to consider using quality gasoline that
already contains these chemicals. One bottle's worth of liquid, plus at least a quarter of the gas
tank's worth, must be put into the gas tank before the car may be driven 10 to 15 miles. The
exhaust and fuel cleaner should be used once every three months for optimal performance.

Change the oil: An individual can keep an automobile in good working order and extend its life
by regularly changing the engine oil, which also serves as a cleaning agent, a coolant, and a wear
preventative. To keep an automobile functioning well, one should change it at certain intervals.
Before each service, read the owner's handbook to see how often the car should be serviced. In
the meantime, however, one should check the oil level and add more if necessary, taking care to
choose oil grade that meets the manufacturer's specifications.

Change the filter: A clogged air filter prevents fresh air from entering the engine, which may
lead to several issues. If an engine is not able to properly vent, harmful deposits will build up and
accelerate the wear and tear. Again, the service intervals will tell you how often to change the
filter, but if you live in a dusty location, you should be prepared to do it more often.

Change your car: Due to stricter environmental laws, today's automobiles are more fuel-
efficient than ever before. To cut down on car's emissions, the steps as described above could
help, but a newer vehicle might be better.

Businesses may track their progress towards improved environmental performance by setting
objectives to minimise greenhouse gas emissions. Companies that are serious about reducing
their carbon footprint should be able to set ambitious targets for themselves (Porter and
Reinhardt, 2007). But, the organisation may go ahead if it uses key performance indicators
(KPIs) that are aligned with its operations, products, and services and are also linked to the
material climate consequences. When appropriate, the organisation may discuss potential areas
of focus and areas for future growth. Greenhouse gas (GHG) reduction activities are often tied to
cost reductions, and this data helps the organisation to monitor growing efficiency and execute
such efforts (Pinkse and Kolk, 2007).

Report Your Carbon Footprint: Finally, the company must compile the aforementioned
systematic reference expertise, in addition to its climate strategy, targets, risk assessment, and
GHG emissions statistical data, and disclose this information to organisations such as the carbon
disclosure initiative or recover characteristics for the organisation's annual report (Lee, 2012).
CONCLUSIONS

ISO 14064 is an international standard for reporting greenhouse gas emissions. The first section
details how to compile a greenhouse gas inventory that is on par with those compiled by other
organisations in other industries and nations. The third part puts out a process for validating
stated GHG inventories. ISO 14064 is a vital tool if a business must assess its contribution to
global warming. To further benefit government bodies, climate activists and other initiative
administrators, the standard may serve as a framework for greenhouse gas reporting.
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