Step-by-Step Guide to GHG Accounting and CDP Reporting for Businesses

Increased Transparency: Reporting to CDP shows your commitment to transparency and accountability regarding environmental issues. Risk Management: Identifying and measuring GHG emissions aids in evaluating climate-related risks and opportunities. Operational Efficiency: The process often uncovers opportunities for operational improvements and cost reductions. Stakeholder Trust: Investors, customers, and employees are increasingly prioritizing environmental responsibility. Regulatory Compliance: Many regions now mandate GHG reporting, making CDP disclosure an important preparatory step. Competitive Edge: Strong environmental performance can set your organization apart in the marketplace. Understand the GHG Protocol Begin by reviewing the GHG Protocol’s Corporate Accounting and Reporting Standard summary (available on their website). Focus on the core principles: relevance, completeness, consistency, transparency, and accuracy. Learn about scopes 1, 2, and 3 emissions. Define Organizational and Operational Boundaries Choose between two approaches: equity share or control (either operational or financial). List all entities, facilities, and operations within your organization. Select the approach that best aligns with your organization’s structure and goals. Identify and Measure GHG Emissions Scope 1 (Direct emissions): Identify sources such as company vehicles, on-site fuel combustion, and process emissions. Gather data on fuel use, refrigerant consumption, etc. Scope 2 (Indirect emissions from purchased energy): Collect data on electricity, heating, and cooling purchases. Decide between location-based or market-based methods (or both). Scope 3 (Other indirect emissions): Begin with the most relevant categories (e.g., business travel, employee commuting, purchased goods). This scope is optional for beginners but increasingly critical. Gather and Analyze Data Create a consistent data collection template. Identify data sources within your organization (e.g., utility bills, procurement records, HR data for employee commuting). Set up a system for regular data collection (monthly or quarterly). Use actual data where possible and estimate only when necessary, documenting your methodology. Select Emission Factors For beginners, use government-provided emission factors: United States: U.S. Environmental Protection Agency (EPA) emission factors United Kingdom: Department for Environment, Food and Rural Affairs conversion factors International: Intergovernmental Panel on Climate Change (IPCC) emission factor database Ensure the emission factors are the latest available and document their source and year. Calculate Your Carbon Footprint Use this formula: Activity data x emission factor = GHG emissions. Start with a spreadsheet for calculations if specialized software is not available. Convert emissions to carbon dioxide equivalent (CO2e) using global warming potential values. Verify Your Data Start with internal verification: check for data entry errors, ensure all emission sources are included, and compare with past data or industry benchmarks. Consider hiring a third-party verifier for additional credibility, especially for public reporting. Prepare for CDP Reporting Create an account on the CDP website. Download and review the relevant questionnaire (typically Climate Change for beginners). Attend CDP webinars or workshops for first-time reporters. Gather additional information, such as climate-related risks and opportunities, emissions reduction efforts, and governance structures. Complete and Submit the CDP Questionnaire Start early as the questionnaire is comprehensive. Answer all relevant questions, using “not applicable” or “we do not have this information” when necessary. Provide context and explanations, especially for areas still under development. Use CDP’s guidance documents for each question and have colleagues review your responses before submitting. Review and Improve After submission, review your CDP score and feedback. Identify areas for improvement, such as data collection, emissions reduction, and overall climate strategy. Set targets for emissions reductions if possible. GHG Protocol CDP Science Based Targets initiative IPCC GHG Protocol training materials CDP’s guidance documents EPA Center for Corporate Climate Leadership