In theory, completing a greenhouse gas (GHG) emissions inventory is relatively straightforward. You collect data on emissions-generating activities from your organization and enter that information into a carbon accounting software like Sustain.Life. From there, the appropriate emissions factors and global warming potentials (GWPs) get applied, then you get an emissions report.
But in practice, there’s a lot of work to be done on the front end to ensure your data sources are accurate and complete.
If you only report on a partial GHG emissions inventory for your organization, it could have negative implications for internal and external stakeholders. This article will focus on the importance of a complete inventory, even in the face of missing or incomplete information. While that might seem contradictory, stick with us as we unpack this.
Setting the stage: Why emissions inventories can be daunting
Compiling a GHG emissions inventory can initially seem daunting because many organizations—especially if they’re new to carbon accounting—lack a centralized system of record for their total emissions-generating activity data. Each office’s manager handles utility bills for leased office space, fuel for vehicle fleets gets tracked by spending in accounting systems, and business travel information sits with a third-party travel partner. Even if you collect all the relevant data across disparate stakeholders and systems, there may be missing or incomplete information. But rest assured; you can overcome this hurdle in a few simple steps.
Estimating missing emissions-generating data is a short-term best practice
If you run into the issue of missing data, you’re not alone. You might only have part of your company’s flight information or a waste report for three of four quarters. That’s ok!
Most organizations lack the necessary data repositories, and management plans to quickly calculate their GHG emissions inventory, especially in the first years of their sustainability program. It takes a mindset change and processes to reach a point where complete data is readily available. If you realize you have incomplete data, know that it is perfectly acceptable—and best practice—to estimate missing data in the short term because it helps avoid underreporting your emissions.
Consider a situation where you can only gather half of your organization’s emissions-generating activity data. Without estimating those data gaps, your greenhouse gas inventory would only represent 50% of your organization’s emissions. A situation like this would significantly hamper your ability to use this year as a meaningful baseline to measure emissions reductions over time for two reasons:
- As you get more-complete emissions inventory data in subsequent years, your organization’s emissions totals will artificially inflate.
- If you pursue emissions reduction projects in that first year, those improvements would be dwarfed by the expanded operational boundary and increased data coverage. From an outsider’s perspective, it would seem that you have a substantial emissions increase when they may have actually decreased.
Estimating data is an important and common step in early GHG inventory development. Still, you should not rely on estimations in the long term, as they could mask real risks and opportunities for your organization.
Keep detailed records on reported vs. estimated data
An essential element of estimating data is building on it and working to make it more complete over time.
You should track the percentage of data that requires estimations and improve the quality and completeness of reported data each year, which is important for two reasons.
- The ratio of reported to estimated data across each emissions-generating activity provides valuable insight into the areas of your company most suited for emissions data management enhancements.
- Reporting on the percentage of emissions estimates is essential for some reporting frameworks. For example, the CDP supplier module questionnaire requests that organizations provide a margin of error for any allocated emissions. Additionally, GRESB allows participants to utilize estimated data when reporting on energy consumption only if it aligns with one of their predefined criteria and is not used as an alternative to acquiring complete and accurate data.
These growing requests are likely due to the Greenhouse Gas Protocol’s (GHG Protocol) adherence to five core principles for GHG accounting: relevance, completeness, consistency, transparency, and accuracy. Improving reported data coverage over time is directly tied to the “completeness” and “accuracy” principles. So, while estimating some emissions can provide a temporary fix for your GHG inventory, increasing reported data over time is vital to aligning with reporting standards and frameworks.
Note that those are two slightly different ways to track missing information. The first focuses on missing activity data (e.g., fuel and energy consumption, etc.), while the second focuses on missing carbon emissions (i.e., MT CO2e) for reporting to common frameworks. The difference is that the GHG content of different emissions-generating activities depends on the fuel mix and the fuel combustion completeness of various equipment. For example, motor gasoline contains approximately 86% of the carbon dioxide content as an equivalent volume of diesel fuel. So, if your organization missed the same percentage of activity data for both types of fleet vehicles, the impact of missing CO2 emissions data would be higher for diesel vehicles.
Knowing where the most significant data gaps exist will help determine where to focus your data-gathering efforts. There are two ways to focus your efforts better. Either tackle the largest data gaps or the easiest ones to address. For instance, if you are missing data for half of your office spaces and a single vehicle, gathering the most significant missing data set could make sense, even if the single vehicle data is easier to get. Or the inverse may be true, depending on your organization—that’s where developing a data improvement plan and ESG tracking software is vital.
Develop a data improvement plan
While estimation techniques for missing activity data are valuable tools to approximate your company’s complete GHG emissions profile, they should not be relied on for long-term use. It is worth the time and effort for your organization to evaluate where the largest gaps in data completeness lie and develop a plan to address those gaps before the next emissions calculation.
Here are some quick tips for how to close common data collection gaps:
If your office’s utility bills sit with individual office managers, have these office managers enter their monthly energy consumption and spend in the Sustain.Life’s Bulk Data Import Template for easy upload to the application. If they send PDF copies of energy use bills, you can attach them to each month’s submission to create a seamless data warehouse for traceability. [SCREENSHOT]
If you rely on drivers to submit receipts for the gas (or other fossil fuel types) used across your vehicle fleet, sign up for an organizational fuel card that tracks fuel consumption data.
Instituting organizational policies well before inventory development will save you a lot of headaches when it’s time to calculate your emissions. And in the long run, having complete, accurate data will allow you to gain valuable insights into the most rewarding and material emissions reduction activities your company can take.