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Greenhouse Gas Statements: What Is Being Counted?

When discussing greenhouse gas accounting three types of document are frequently cited: a corporate greenhouse gas inventory, a product inventory, or a reduction project report. Note that “footprint” is often used as a synonym for “inventory”.

Corporate Greenhouse Gas Inventory

A corporate inventory is an accounting of the greenhouse gas emissions a company is responsible for. One of the first requirements in documenting the inventory is to choose the organizational and operational boundaries:

  • Organizational boundary: Which parts of the organization should be included? Any operations directly owned and operated by the company are obviously included. For other operations there are two approaches (“Equity share” and “Control”) with rules for determining whether they should be included and what portions of each operation’s emissions to include.
  • Operational boundary: in essence, this is a statement of which scopes should be included in the inventory. Scopes 1 and 2 are generally required. Whether Scope 3 is included depends on the purpose of the inventory and who will be looking at it. In the past the inclusion of Scope 3 emissions was often optional, but at the time of this writing (August 2021) the importance of Scope 3 emissions is rising and they are increasingly required.

Once the boundaries are selected, the work of actually measuring and reporting the emissions begins. Many organizations provide guidance on how to do this, and a wide array of consultancies are available to accelerate the learning and execution processes. And new approaches and technologies — such as those developed at CIBO for agriculture — are being developed to independently quantify and validate ag-related emissions and simplify the process of assessing Scope 3 emissions.

Well-known Corporate Greenhouse Inventory Standards

  • Greenhouse Gas Protocol: Corporate Accounting and Reporting Standard
  • ISO 14064-1: Greenhouse gases. Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals

In most cases, a company that meets one of these standards will also meet the other. If you are pursuing certification under one of these standards, the additional cost of certifying yourself under both is likely minimal and might placate stakeholders that prefer one over the other.

Product Greenhouse Gas Inventory

A product inventory — often called a product carbon footprint, or PCF — is an accounting of the greenhouse gas emissions required in the lifecycle of a product. Which parts of the life cycle are included depends on the type of inventory.

The most common types are these:

  • Cradle-to-grave: from raw material extraction to disposal
  • Cradle-to-gate: from raw material extraction to leaving the “factory”
  • Cradle-to-cradle: from raw material extraction to recycling/reuse

Because these inventories include emissions both upstream (cradle) and downstream (grave, or back-to-cradle) of the company that makes the product, they effectively include portions of the company’s Scope 1, 2, and 3 emissions. In theory, combining product inventories from all of a company’s products and services should give the corporate inventory. But in practice, this is difficult and not required.

Well-known Product Greenhouse Inventory Standards

  • Greenhouse Gas Protocol: Product Life Cycle Accounting and Reporting Standard
  • ISO 14067: Greenhouse gases. Carbon footprint of products. Requirements and guidelines for quantification and communication
  • British Standards Institution PAS 2050: Specification for the assessment of the life cycle greenhouse gas emissions of goods and services

Learn more by reading The Definitive Guide To Carbon and Climate Commitments.