What are GHG emissions?
Your company’s carbon footprint is the total amount of greenhouse gases (GHGs) you emit into the atmosphere. These GHGs include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and the industrial gases hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3).
These gases contribute to climate change, which harms our environment and represents one of the most important global issues of our times.
The benefits of calculating GHG emissions
Measuring your emissions is an important step toward doing your part to limit climate change. Taking inventory of your GHG emissions is also an opportunity to improve your business, as it will often reveal where effort and resources are being wasted.
Positive impact on your business
Calculate your GHG emissions to assess potential regulatory, physical and transition risks.
Access to new markets
Major purchasers are increasingly asking suppliers to report their GHG emissions.
Detect areas for optimization and cost reduction by seeing what areas require more energy or resources.
Roadmap to calculating your GHG emissions
Choose a carbon accounting standard
A carbon accounting standard is an internationally recognized method of calculating your company’s emissions. You’ll need to choose the one that best fits your company’s goals. The oldest and most commonly used method is the GHG Protocol Corporate Accounting and Reporting Standard. It divides emissions into three categories, also known as scopes.
Direct emissions from sources controlled or owned by your company, including from your energy consumption and company vehicles.
Indirect emissions from energy providers who supply you with electricity, steam, and/or heating and cooling for buildings.
All other indirect supply chain emissions, such as those from your raw material suppliers, waste and employee commuting.
Collect emissions data
Start collecting data on to calculate your company’s emissions. This involves going through all of your business activities and assets to determine what emissions each one produces. Follow these two steps:
1. Understand your goals
Examples of possible goals include cutting costs, reporting for eco-labelling or certification requirements, and reporting to regulators or partners (e.g. supply chains, financial institutions, insurance companies, investors).
2. Collect required data
This may include energy consumption by buildings, vehicle gas consumption and waste hauling weight reports. You can find this information on your invoices or by contacting your suppliers.
Calculate your actual emissions
Calculating your carbon footprint can be a complex process. It’s important to ensure your numbers are accurate. We recommend calculating your emissions annually. You can select how to do it from the following options.
Use your existing software
Some business management and accounting software systems offer modules that allow you to track your carbon footprint data and produce reports.
Hire an outside expert
Consultants can either complete most of the work for you or work with your team. This is a good option if you lack the resources to produce accurate emissions reports.
Calculate it yourself
You can use online tools to make a rough estimate of your emissions. For example, Natural Resources Canada offers its Greenhouse Gas Equivalencies Calculator. To do it yourself, you determine the CO2 equivalent based on what are called emissions factors. These are factors that affect the calculation in your area, such as the carbon intensity of your local electrical grid, types of energy used and modes of transportation.
Report the data
To report the data, you need to choose between two reporting approaches:
Financial and operational control approach
Under this approach, a business accounts for 100% of emissions from operations over which it has financial or operational control. For example, if a business directs the financial or operational policies of a restaurant, it reports 100% of the restaurant’s emissions. This is true regardless of what portion of the restaurant the business owns.
Equity share approach
This approach requires the company to account for emissions based on its share of equity in an operation. For example, if a business owns 40% of a restaurant, it reports 40% of the restaurant’s emissions.
Make a GHG reduction plan
Knowing how your business generates emissions helps you develop a reduction plan. Most emissions happen in four areas: electricity, heat and cooling, materials and transport.
Here are examples of projects to focus on:
- Turn off and unplug appliances
- Run maintenance on old equipment and upgrade to more efficient models
Heating and cooling
- Set thermometers to lower heat during non-work hours
- Install air curtains and low-flow aerators on sinks
- Reduce the size of packaging
- Use recycled material
- Consolidate orders and shipments into one trip
- Switch to electric or more fuel-efficient company vehicles
Find the right grant for your climate action
Discover our list of over 60 governmental active grants, tax credits and loan programs to support the environmental initiatives of Canadian businesses.
Government of Canada: Climate Change
This hub offers a variety of resources on climate change and Canada’s efforts to combat it.
Government of Canada: Net-Zero Challenge Technical Guide
This voluntary initiative encourages businesses to transition their facilities and operations to net-zero emissions by 2050.
The content of this webpage is provided for information purposes only, and the reader is responsible for any decisions resulting from its use. The results of applying the content are not guaranteed by BDC and may vary depending on the context, market, sector, financial situation and size of the company. Content originating from a source outside of BDC is the sole responsibility of the author of that source.