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Greenhouse Gas Accounting: A Key Component of Corporate Sustainability
Greenhouse gas accounting or carbon accounting relates how organizations conduct greenhouse gas emissions assessment to quantify the total greenhouse gases produced directly and indirectly from their business or organization’s activities. We call this the carbon footprint of a company. Reliable and comprehensive corporate greenhouse gas or GHG accounting is the first step in the management of climate performance. GHG accounting and disclosure is an increasingly important consideration for all companies, particularly public issuers. This article looks into Scope 1, 2, and 3 emissions and explores frameworks and processes to support companies in preparing or analyzing a GHG inventory, and looks into why it is important for companies to conduct this analysis and how the investor community can use this information as a part of their ESG and climate strategies.
Understanding the Fundamentals of Greenhouse Gas Emissions
What Exactly are Greenhouse Gases (GHGs)?
Greenhouse gases, including carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs), trap heat in the Earth’s atmosphere, causing a warming effect. Each gas has a different ability to trap heat, known as global warming potential (GWP), which is measured…
