On your pathway to sustainability reporting, you will have to review your emissions as part of your environmental measuring and impact.
Greenhouse gas (GHG) emissions are a major contributor to climate change and are the target of numerous government policies aimed at reducing their impact on the environment. In Australia, the main GHG emissions are carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O).
GHG emissions can be split into three ‘scopes’ to better categorise, measure and report on.
In Australia, reporting of scope 1 and 2 emissions is mostly voluntary, however is mandatory for certain companies, such as large controlling corporations and facilities, under the National Greenhouse and Energy Reporting (NGER) Act 2007. The NGER Act requires controlled corporations who have exceeded their emissions threshold to report on their greenhouse gas emissions, energy production and consumption on an annual basis.
Scope 1 emissions are direct emissions from sources that are owned or controlled by a company. These emissions are generated by activities such as burning fossil fuels for energy production, industrial processes, and transportation. E.g. the manufacturing of cement, fuel consumed by owned and leased company vehicles.
Scope 2 emissions are indirect emissions refer to those emissions which occur outside of your operational control but occur as a result of the operations. E.g. the power purchased and used for lighting and operation of your business or own use.
Scope 3 emissions refer to all other indirect emissions that are a result of a company’s activities. They occur outside of its direct control or ownership, such as supply chain emissions, employee commuting, and waste disposal.
Furthermore, GHG emissions are split into downstream and upstream:
Scope 3 emissions are not mandatory to report under the NGER Act, but many companies in Australia choose to report on their scope 3 emissions voluntarily. This is often done as part of their corporate sustainability reporting and to demonstrate their commitment to reducing their carbon footprint.
If you are researching sustainability reporting for your business, please speak with one of our environmental, social and governance team members on 03 5444 0344 to discuss how we can help you on your pathway.