With all the regulatory frameworks to wrap your mind around, many are anxious for some clarity around regulatory compliance and greenhouse gas (GHG) tracking.
Quantifying GHG emissions allows companies to understand better, predict, and quantify the key risks, opportunities and impacts they are exposed to concerning climate change and the net zero transition. But what exactly is involved?
Industry emissions experts from business improvement and standards company BSI presented a comprehensive webinar on May 2 that included an overview of key regulations governing GHG emissions, including recent updates, trends, and future projections. From federal mandates in Canada and the United States to regional initiatives, there’s an evolving regulatory environment with implications for businesses operating in various sectors.
The webinar kicked off with an overview of GHG categorizations:
- Scope 1 emissions are direct GHG emissions which occur from sources that are owned or controlled by the reporting company.
- Scope 2 emissions are classified as indirect emissions from the generation of electricity and energy that is purchased by the reporting company from a third-party and consumer.
- Scope 3 emissions comprise a broader range of indirect emissions that are a consequence of the activities of a company but occur from sources that are not owned or controlled by the reporting company.
The Paris Agreement, a legally binding international treaty on climate change, was adopted by 196 parties at COP21 in 2015. As such, there are 35 markets are the world that have already introduced or are in the process of introducing mandatory climate change disclosures for corporations, starting in or around 2024.
For Canada, keep in mind the Environment & Climate Change GHG Reporting Program and mandatory climate-related disclosures that come into effect at both banks and insurance companies. Why should you care? If you company receives loans or investments from a Canadian bank, you’ll have to report them.
Moreover, managing these risks, opportunities and impacts in a proactive manner has been proven to provide the following: drive operational efficiencies (i.e., for energy, logistics, and procurement), lead to significant cost savings, open new markets, increase market share and customer loyalty, result in reputational benefits, improve employee attraction and retention, and secure the company in a leadership position.
“The goal is to get to Net Zero emissions, where the GHG emissions produced is equivalent to the GHG emissions removed,” said Sarah Riley, co-founder and chief strategy officer at R&G Strategic.
Sarah Riley is a recipient of a United Nations Global Compact award for her contribution toward the SDGs (Goal 17), a member of the Nova Scotia Minister’s Round Table for the Environment and Sustainable Prosperity, and one of Canada’s Clean50 for 2024.
Riley explained the various benefits and opportunities of tracking GHG emissions:
- Resource efficiency: Cost savings, increased productivity and streamlined operations.
- Energy source: Energy security, independence, and flexibility.
- Products and services: Development of new products and services, and niche services.
- Resilience: Long-term planning for long-term sustainability.
The International Organization for Standardization is an independent, non-governmental, international standard development organization composed of representatives from the national standards organizations of member countries.
Riley described ISO14064-1 as an important part of successful GHG remissions management, and provided some good reasons for implementation, noting that it can be used in combination with the GHG Protocol, gives stakeholders greater confidence in your GHG statements, sets you up for meeting regulatory requirements for assurance, and ensures you’re meeting best practices in data collection and reporting.
Is it a challenging process? Riley said they are the usual challenges involved in GHG emissions tracking: there complexity issues, it’s resource intensive, there are verification costs, there’s a changing regulatory landscape, and difficulties with regard to data availability. Riley says the latter is “the huge one – feeding all that data into the appropriate format.”
Challenging but worth it apparently. A panel poll revealed that several organizations in attendance have already started the journey.
Riley shared some practical tips for integrating ISO64-1: learning more (take the course and download the standard), gap analysis (identify which data you are already collecting and what will be needed to quantify your GHGs to ISO standards); get buy-in (GHG inventories can be a company-wide exercise that will require engaging internal stakeholders and setting clear expectations); and, consulting and working with a certified professional to guide the process.
The panel also discussed Carbon Footprint Verification, a third-party verification process offered through BSI that provides credibility, reassuring international and external stakeholders that your organization’s carbon footprint reporting is accurate, complete and compliant with the major GHG reporting standards.
“Through this verification process, you’ll confirm the level of emissions you need to reduce and offset,” explained Kyle Jones, client manager at BSI.
Kyle Jones is a client manager at BSI Specific who delivers services that support Environmental, Health & Safety, Quality, and Sustainability management programs. He is an accredited lead auditor with over 20 years of experience.
The verification process includes collecting data on emissions caused by an organization’s activities, products and services. Once this data has been collected, BSI independently verifies its accuracy and the calculated carbon footprint.
BSI 6-step verification process include the following:
- Application
- Planning
- Conducting the verification or validation
- Conclusions
- Independent Review
- Opinion and report issued
The panelists also noted climate-related reporting requirements coming soon for all publicly traded Canadian companies.
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