Greenhouse gas emissions, particularly along the value chain are often a business’ largest impact on the environment. 

This also means businesses are often missing out on opportunities for improving their Scope 1 emissions and broader opportunities to work with partners to improve their value chain emissions. 

But before we look at how your business can tackle its emissions, it’s important to know how emissions are measured, managed and reported on.

Industry standards and regulations

The Greenhouse Gas (GHG) Protocol establishes global standardised frameworks to measure and manage emissions. These are the most widely used greenhouse gas accounting standards.

These standards help businesses:

  • Identify and understand risks and opportunities associated with value chain emissions;
  • Identify reduction opportunities, set reduction targets, track performance and share successes;
  • Engage suppliers and other partners in GHG management and sustainability.

The GHG Protocol identifies three scopes of emissions:

  • Scope 1: all direct emissions as a result of an activity from an organisation or business at a facility level. This includes fuel combustion on site such as gas boilers, company vehicles and “fugitive” emissions such as air conditioning leaks. 

 

  • Scope 2:  emissions from indirect consumption of energy sources. This primarily relates to emissions that occur during the production of electricity consumed by the business. These emissions physically occur at the facility where electricity is generated.  

 

  • Scope 3: all other indirect emissions that occur in the wider economy. This includes transportation of purchased materials, goods and services, employee commuting, business travel, waste disposal, distribution, investments, and leased assets

 

Under the National Greenhouse Gas and Energy Reporting Act 2007 (NGER Act) businesses that meet the reporting thresholds for either facility or corporate must report on Scope 1 and Scope 2 emissions. Every State and Territory Government in Australia has committed to net zero emissions by 2050. It is likely that emissions regulations will be tightened further in the near future. Businesses that move early to address emissions and use energy efficiently will potentially see significant cost savings over companies that are waiting for regulations to come into effect.

What’s in my scope?

The first step towards reducing your business’s carbon footprint is to understand what actions will have the most impact.

While it’s no easy feat to reduce your business’s entire footprint, as this relies on reducing your own emissions and those that occur in your supply chain, tackling Scope 1 and Scope 2 emissions are major steps toward reducing your impact.

Reducing electricity use, switching to more energy efficient machinery or even choosing more environmentally friendly materials in your production cycles, are steps toward offsetting Scope 1 emissions. These are all activities that can be taken on at your own sites. 

In addition, adjusting consumption or upgrading of equipment to more energy efficient alternatives reduces emissions. Using tools such as timers and sensors can help to ensure unused equipment is switched off when not in use. Coupled with Flow Power’s engineering services and demand management capabilities, companies can make changes that can significantly reduce emissions.

To reduce Scope 2 emissions, businesses can work with retailers to offset their electricity use with the purchase and surrender of Renewable Energy Certificates. The reduction of emissions can also be aided by combining your electricity supply with on-site renewable energy generation or by sourcing your electricity through a virtual off-site Power Purchase Agreement

While challenging to track and control, Scope 3 emissions are becoming increasingly important. Larger companies are now closely examining their whole supply chains to report on and reduce their scope 3 emissions. This can be achieved through direct actions such as reducing shipping distances and weight, or purchasing recycled materials, however, the easiest way to reduce scope 3 emissions is to look for suppliers who can demonstrate low scope 1 and 2 emissions of their own.

Businesses that can act on their emissions play a crucial role in driving forward a net-zero carbon future. This is especially true for businesses that go 100% renewable, as they have a direct impact on pushing forward Australia’s pipeline of renewable energy projects.

Talk to Alex about strategies on how to reduce your emissions

Talk to an expert