Last I checked , data is still king, fueling decision-making processes worldwide. Effective data collection and analysis is fundamental to the success of any organization, from enhancing business processes through to better understanding customer expectations and aligning with future trends. Not surprisingly, data is also integral to establishing, planning, and reporting sustainability commitments. And to accelerate climate action throughout any organization, teams need access to the highest quality data steering them toward better decisions.
A science-based approach is required to ensure the integrity of the methodologies deployed, the comprehensiveness of the reporting methods, and that data compilation processes align with current environmental, social, and corporate governance (ESG) reporting frameworks and regulations—as well as stakeholder expectations. It goes without saying that governance frameworks and, more specifically, an effective emissions quantification tool are now key to the success and longevity of any tech innovator.
The power of emissions quantification
In simple terms, an emissions quantification tool is a system used to calculate the greenhouse gas (GHG) emissions footprint of an operation, service, or product, often measured by job or activity. The system can be used for estimating, planning, designing, and reporting purposes.
Reporting sustainability data is as important as publishing your company's financial data.
To ensure the transparency, integrity, and traceability of calculated emissions data, every emissions quantification tool needs to go through an assessment and validation process before being used. After all, failure to go through the correct validation process could lead to significant risks for the company—external reporting of incorrect emissions data or improper job planning and tech design optimization—all of which lead to cost increases and fundamentally, reputation loss. You need to get it right, the first time. But where do you begin?
1. Optimize learning and development opportunities for your people
Most companies would agree that teams need environments in which they can experiment, learn, and grow. To create these, you must advance your people’s knowledge until they become skilled in key areas of your strategy and growth engines. The first step toward achieving this is the implementation of specialized learning plans around key strategic areas, such as GHG emissions reduction and water stewardship.
By developing a wide and varied sustainability training program coupled with an engagement campaign, your people will have a baseline understanding of your sustainability priorities and the role they can play. You can leverage these learning opportunities to ignite the passion and innovation needed to drive change. For example, you could make the dedicated training a requirement for accessing the emissions quantification tool, ensuring that all participating team members have the required background knowledge. I, for one, see knowledge-building and employee engagement as the first—and one of the most important—steps in a solid emissions quantification process.
2. Adopt a science-based approach for your framework
It’s important that your initial emissions quantification framework follows the principles and rules of the GHG Protocol. A proper emissions baseline, supported by a central corporate emissions dashboard for GHG emission tracking, is also necessary. It gives you the visibility you need to properly prioritize and take actions across your business. These analytics are essential to measuring GHG reductions, as well as future forecasting.
But what does this mean on the ground when it comes to day-to-day GHG accounting in a complex, global organization? It means understanding all the different parts of your business and making key accounting decisions. To calculate facilities’ Scope 1 and 2 emissions, for example, you could record the volumes of fuel and kW.h of energy consumed, incorporating the source of the electricity (if it is from renewable power or not). For field operations, on the other hand, Scope 1 and 2 emissions could be estimated based on the fuel and electricity consumed by the equipment you use for service delivery.
At this point, science-backed governance procedures are an absolute must.
Fuel consumption is mainly calculated from the spend data by converting dollar value into volumes and then into carbon dioxide equivalent (CO2e) emissions. In the case of customer-provided fuel (when spend data are not available), numbers are estimated by taking the equipment’s average operating hours and multiplying it by hourly power consumption. The result is then converted to metric tons of CO2 using standard conversion factors.
Calculating the Scope 3 emissions of tech usage is a bit different. For this, we suggest you use either the product sale or product lease model. You need to know equipment power consumption, operating hours, product lifetime, and number of product units sold or leased in the reporting year.
It’s also important that you use the same emissions factors for all calculations. We’ve found that a way around this is ensuring the factors are published and regularly updated in your corporate emissions dashboard.
3. Undertake an emissions quantification assessment
With your GHG accounting framework firmly defined, your teams can now undertake an emissions quantification assessment of each tech, service, or job. Before you begin, we recommend establishing a central tracking system. An initial questionnaire should be completed stating the intent of the calculated emissions: Is it for internal or external use? What is the scope of coverage—is it part of the overarching business or a particular function or tech? Has supporting documentation been prepared?
4. Create an approval framework
Once you’ve answered the questionnaire, the assessment can be classified according to your risk matrix (the largest risk being publishing data in your corporate sustainability or customer report). By developing a specialized responsible, accountable, consulted, informed (RACI) approval process, each assessment can be validated by the correct subject matter expert (SME).
It’s not just about the numbers. It’s about what they stand for and how they’re calculated.
The SME is responsible for ensuring that standard emissions coefficients are used and that the emissions quantification tool reflects the specifics of the business line or function. The assessment should also be accompanied by supporting documentation describing calculation methodology and all necessary references to emissions factors. And it’s important that all assumptions and estimations are clearly described.
5. Ensure your documents are easily accessible
All assessments (once approved) should be referenced in the central tracking system for ease of access. We recommend having two categories depending on if the assessment is validated for internal or external audiences. If the assessment is not validated, the owner should acknowledge that the calculated emissions data will not be used in internal business systems or reported externally in customer reports, sustainability reports, or any other media.
6. Regularly update your emissions quantification tool
Due to dynamic changes in accounting regulations and standards, all validated emissions quantification tools should be reassessed annually. This ensures that your tool is using the latest emissions factors and is compliant with any updated external standards. Reassessment of the tool is also necessary if there are changes, such as new calculation assumptions, formulas, or approaches.
Reporting accurate and traceable sustainability data is as important as publishing the financial data of your company. Today, sustainability data are being audited and validated by a third party to ensure adherence to set reduction targets or announced sustainability pledges. All of this means that effective governance procedures and the upskilling of your people on sustainability topics are an absolute must. And emissions quantification tools are only the start with water accounting, avoided emissions certification, biodiversity screenings, and circularity measurements already gaining ever-increasing momentum. (Watch this space!)
