Following the announcement of mandatory GHG reporting for UK LSE listed firms in June 2012 I’ve been speaking to many people about greenhouse gas accounting from all walks of life; accountants, company secretaries, legal professionals, CSR managers, sales people, marketers, PR firms, my neighbours and even my parents. A common theme in these conversations is that while most agree that GHG accounting is now “a serious business” and should be good for my business, surely it’s all quite simple because “it’s just some maths”, so isn’t there a danger that GHG accounting experts like our team at Ecometrica aren’t really needed?
To answer this question I use a “simple” example; that of electricity consumption. I start by asking, “how many individual calculations are needed to get from a single electricity consumption data point (in say kWh) to tonnes of carbon dioxide equivalent?” The answer is that you need 14 individual calculation steps to do this properly, at a minimum. If you don’t actually have your data in the right units or for the right time period, further conversion steps are needed. All of this needs to be calculated and documented and presented in a suitable format to an auditor. Here’s a screenshot showing the calculations performed on one single data point (1,660,884 kWh) in Ecometrica’s greenhouse gas accounting solution Ecometrica Sustainability:
Just look at all the lovely maths. Admire the emissions factors, the global warming potentials and the references. See how transmission and distribution losses are separated out from direct generation emissions and reported in the required scopes. Observe too, how the uncertainty of the data and emission factors are quantified. Ecometrica’s Ecometrica Sustainability software is able to automate all of this because it’s been designed by our team of expert GHG accounting professionals who really know their stuff, together with our super intelligent in house development team who are able to codify this expertise. Note that the client providing the data has not had to carry out any additional work to achieve this level of accuracy and transparency; all the calculations are performed on a single data point provided by the client.
Now if you take that electricity example and think about all of the possible emissions sources for all greenhouse gases for all parts of an organisation across the globe, you can imagine that an accurate annual greenhouse gas account can become rather complex. On average our corporate clients require approximately 6,000 individual calculations for one set of annual GHG accounts. And that’s just for an office based organisation like a professional services firm.
At the technical end of the spectrum our GHG analysts can have even more fun. Consider syngases (synthesis gases); blends of carbon based fuels and hydrogen that are commonly used in petrochemical industries. Remember your A-Level chemistry? Good because you’ll need it. A bit of Stoichiometry is required here so you can work out the emissions intensity of the actual fuel being combusted based on the molecular weight of the fossil carbon atoms within the fuel (not the biogenic ones) that oxidise to CO2 in the combustion process. Remember that nothing other than water vapour and heat are generated if you combust hydrogen so it doesn’t have a Kyoto greenhouse gas impact and should be excluded from your calculated emission intensity (@ any scientists reading, yes I know that water vapour is also greenhouse gas but it isn’t a Kyoto greenhouse gas and is therefore not part of mandatory GHG reporting).
These two quick examples reveal a tiny fraction of the calculation detail needed for accurate GHG accounting, but the realities of corporate greenhouse gas accounting call for an awful lot of additional expertise even beyond this. Whether it’s scoping a client’s operations to include the correct emissions sources, navigating scope “grey areas”, providing pragmatic solutions to data problems, supplying technical advice on the calculations, carrying out quality assurance checks on the results, working with the external auditors, or explaining what the results mean, an experienced team will always be there for its clients. Ours is. In fact one client likened Ecometrica’s service to the “Rolls Royce” of greenhouse gas accounting. If only I could get them to say that publicly…
To sum up then, greenhouse gas accounting is based on a simple premise of routine maths but the underlying detail can be fiendishly complicated, so it isn’t really that simple.