Start by taking stock of the current emissions situation and establish a carbon management foundation that is traceable, verifiable, and capable of supporting carbon reduction decisions.
When companies face carbon fees, sustainable disclosures, international customer questionnaires and supply chain carbon reduction requirements, the first step is usually not to immediately set a net zero target, but to answer three basic questions: where are the emissions coming from, is the data reliable, and can the organization update the results in a consistent way from year to year.
Based on the company’s disclosure purpose, organizational type and verification needs, Startrust assists in selecting and connecting ISO 14064-1 and GHG Protocol, establishing organizational boundaries, emission source inventory, activity data, calculation methods, supporting documents and internal audit processes. The goal of coaching is not just to complete an inventory report, but to equip companies with carbon data management capabilities that can sustain operations.
- Clarify the inventory boundaries of companies, subsidiaries, locations and leased assets
- Establish Scope 1, Scope 2 and applicable Scope 3 emission source and data responsibilities
- Complete emission calculations, inventory reports and preparations for third-party verification
- Identify emission hotspots and connect carbon reduction targets, energy management and internal carbon pricing
Why do companies need to conduct organizational greenhouse gas inventories?
Responding to regulatory, disclosure and capital markets requirements
Greenhouse gas emissions have gradually become important data for corporate compliance, sustainable information disclosure, and climate risk management. Different systems may have different requirements for applicable objects, scope of inquiry, disclosure format and degree of verification. Therefore, enterprises need to identify their own applicable situations before deciding on the depth and duration of the inquiry, and avoid responding to all requirements with the same set of methods.
Respond to the carbon data needs of customers and supply chains
Brand customers and international supply chains often require suppliers to provide organizational emissions, renewable energy use, carbon reduction targets and product-related carbon data. If an enterprise only collects data temporarily every time it receives a questionnaire, it will not only consume manpower, but also easily lead to inconsistencies in years, boundaries, coefficients, and numbers. Only by establishing a fixed inventory process can we support different customer needs with the same reliable information.
Identify emission sources that really deserve priority improvements
A carbon inventory is not just about totaling emissions. After dismantling the results according to locations, departments, equipment, energy types and emission categories, companies can identify major emission hotspots and evaluate the priorities of energy conservation, fuel substitution, process improvement, green power procurement or supply chain collaboration.
Establish benchmarks for verification and subsequent carbon reduction
Credible base year data is the starting point for setting carbon reduction targets and tracking performance. If inventory boundaries or calculation methods change from year to year, the results will be difficult to compare. Through institutionalized management, companies can establish base year recalculation principles, data quality requirements and change records, so that subsequent reduction results have a consistent basis for comparison.
What are ISO 14064-1 and GHG Protocol?
ISO 14064-1: Quantification and reporting requirements at the organizational level
ISO 14064-1 provides principles and requirements for quantification, reporting and inventory management of greenhouse gas emissions and removal at the organizational level, covering inventory design, data management, report content and verification preparation. The ISO official website shows that ISO 14064-1:2018 will be confirmed in 2024 and is still the current version.
Enterprises can establish an inventory inspection system in accordance with ISO 14064-1, or entrust an independent verification agency to conduct third-party verification according to needs. Consultants are responsible for assisting enterprises in establishing methods, documents and execution capabilities; third-party verification is performed by qualified and independent verification agencies. The two roles should not be confused.
GHG Protocol: A widely used corporate greenhouse gas accounting framework
The GHG Protocol Corporate Standard provides companies and other organizations with accounting and reporting methods for establishing greenhouse gas inventories, and distinguishes direct and indirect emissions with Scope 1, Scope 2 and Scope 3. Its Corporate Standard, Scope 2 Guidance and Scope 3 Standard together form an important foundation for corporate carbon accounting.
GHG Protocol is currently undergoing revision work on corporate standards and related guidelines. When an enterprise establishes a long-term inventory process, in addition to executing it in accordance with current regulations, it should also retain coefficients, calculation rules, and version update mechanisms for future adjustments.
What is the difference between ISO 14064-1 and GHG Protocol?
Both can support organizational-level carbon inventory, but the classification method, purpose and reporting context are not exactly the same. Enterprises do not necessarily have to choose one or the other. In practice, they often establish systems based on one main framework, and then create the comparisons and disclosures required by another framework.
| Comparison Orientation | ISO 14064-1 | GHG Protocol |
|---|---|---|
| Main positioning | International standards for quantification and reporting of organizational emissions and removals | Corporate greenhouse gas accounting and reporting framework |
| Emission classification | Direct emissions and various indirect emissions | Scope 1, Scope 2, Scope 3 |
| Common uses | Audit systems, reporting and third-party verification | Corporate disclosure, supply chain, targets and multiple disclosure frameworks |
| Organizational boundaries | Establish and disclose according to standard principles | Methods such as equity ratio, financial control or operational control |
| Third-party verification | Can be combined with independent verification | Can be used as the subject of verification or assurance, but the Protocol itself is not a verification agency |
When choosing, you should first consider the purpose of use.
If the company’s main purpose is to complete inventory and third-party verification in accordance with specified specifications, it should first confirm the criteria accepted by the customer, the competent authority or the verification scheme. If the purpose is to support international disclosure, value chain emissions or carbon reduction targets, GHG Protocol related standards should be evaluated. If you are faced with multiple requests at the same time, it is recommended to create a bottom-level emission data and then output different formats through classification and comparison to avoid repeated inspections.
Which companies are suitable to start importing?
- Customer carbon inventory, CDP, EcoVadis or supply chain questionnaire requests have been received
- Need to prepare sustainability report, IFRS S2 or other climate disclosure information
- Applicable objects for inspection, declaration or inspection that are regulated by the competent authority
- Want to establish net-zero, science-based carbon reduction or energy transition targets
- Having multiple locations, overseas subsidiaries or complex leasing and outsourcing arrangements
- Relying on multiple Excels to collect carbon data every year, it is difficult to manage versions and supporting documents
- An inventory has been completed, but an internal process for sustainable updates has not yet been formed
If the enterprise has not yet determined the inventory specifications, it can also conduct a preliminary assessment based on the four factors of “source of demand, organizational scope, data availability, and whether to verify” before deciding on the project scale.
How should the organizational boundaries and emission scope be defined?
First decide which companies and operating activities to include
Inventory boundaries may involve parent subsidiaries, joint ventures, factories, offices, warehouses, leased space, fleets and outsourced activities. Enterprises should establish consistent principles based on the selection criteria and actual control relationships, and record the reasons for inclusion, exclusion, and boundary changes.
Re-identification of direct and indirect emission sources
Common Scope 1 emissions include stationary combustion, mobile combustion, process emissions and refrigerant emissions; Scope 2 is mainly indirect emissions generated by purchased electricity, steam, heat or cold; Scope 3 covers value chain emissions such as procurement, capital goods, fuel and energy-related activities, transportation, waste, business travel, employee commuting, use of sold products and investment.
The scope of the inventory cannot be determined solely based on whether the information is easily accessible. The consultant will help companies identify system requirements, emission significance, impact level and data quality, and establish a phased improvement approach.
Establish base year and recalculation principles
Mergers and acquisitions, sales, operational outsourcing, methodological changes or significant data revisions may affect year-to-year comparability. Enterprises should define in advance what structural or methodological changes will trigger base year recalculation and keep records of changes and calculations.
What information does the company need to prepare?
Typical activity data and supporting evidence include:
- Electricity, steam, heating or cooling energy bills and meter reading records
- Purchase and use records of natural gas, diesel, gasoline, liquefied petroleum gas and other fuels
- Refrigerant types, equipment inventory, replenishment quantity and maintenance records
- Process raw materials, chemical reactions or special gas usage
- Company vehicles, forklifts, generators and other mobile or fixed equipment information
- Waste type, weight, treatment method and clearance certificate
- Logistics, business travel, employee commuting, procurement and supplier information
- Organizational structure, location list, lease contract and operation control description
Incomplete information does not mean that the project cannot be started. The gap list, estimation principles and improvement timetable can be established in the first year, but data limitations should be clearly disclosed, and the quality of original data and supporting evidence should be improved in subsequent cycles.
Common carbon inventory issues of enterprises
Boundaries and responsibilities were not clearly stated in the early stages of the project
If organizational boundaries, inspection periods, and department responsibilities are unclear, it is easy to repeatedly add new locations or emission sources in the future, resulting in schedule delays and recalculation of figures.
Identification of emission sources relies on copying old inventories
Equipment, process and rental status will change. If only the previous year’s inventory is copied each year, new equipment, refrigerants, outsourced activities or value chain emissions may be omitted.
Activity data, coefficients and evidence are stored in a decentralized manner
The numbers are stored in spreadsheets, the coefficients come from different websites, and the supporting evidence is left in personal mailboxes, making it difficult to trace the calculation basis during verification. Every important data should be able to be linked back to the source, period, unit, coefficient version and audit record.
Only calculations are completed, no management system is formed
If the results of the inventory are only controlled by external consultants, they will still be explored again next year. The project should simultaneously establish internal procedures, role division, education, training and inspection mechanisms to reduce reliance on temporary operations year by year.
Premature pursuit of the comprehensive accuracy of Scope 3
Value chain data often needs to mature in stages. Enterprises should first complete category screening, significant source identification and data quality assessment, and then prioritize improvements to the items most important to decision-making, rather than requiring all suppliers to provide data with the same accuracy from the beginning.
How does Startrust assist enterprises in importing?
1. Requirements interview and applicability judgment
Confirm the purpose of the investigation, applicable specifications, customer or competent authority requirements, estimated disclosure time, verification requirements and existing management systems, and formulate the project scope and work plan.
2. Setting organizational boundaries and operational boundaries
Inventory companies, locations, assets, leasing and outsourcing relationships, confirm the scope of inclusion according to the selected method, and establish classification comparisons between ISO 14064-1 and GHG Protocol.
3. Emission source identification and data responsibility division
Establish an inventory of emission sources through interviews, on-site inventory and document review, designate data provision, review and approval personnel, and define reporting frequency, units and necessary supporting evidence.
4. Data collection and emission calculation
Establish data forms and calculation logic, select applicable emission coefficients and global warming potential values, and perform unit conversion, emission calculation and abnormality checking.
5. Data quality and internal control
Check completeness, consistency, period attribution, coefficient versions and supporting links, establish gaps, estimates and correction records to reduce repeated filling in or miscalculations.
6. Inspection report and education training
Complete inventory reports, emission inventories and method descriptions, and assist internal staff in understanding boundaries, data, calculations and annual update processes through practical training.
7. Internal inspection and verification preparation
Carry out inventory review or simulated verification according to the needs of the enterprise, organize the data and evidence that may be needed for verification sampling, and assist in responding to questions and improvement matters raised by independent verification agencies.
8. Hotspot analysis and follow-up management
Make follow-up suggestions based on emission proportion, data quality and improvement level, linking energy management, product carbon footprint, supply chain data, carbon reduction targets or internal carbon pricing.
The actual stage, number of interviews, and delivery content will be determined based on the size of the company, number of locations, emissions complexity, Scope 3 scope, and verification schedule.
Coaching content and deliverables
Main counseling work
- Confirmation of purpose, criteria and applicable requirements of inventory
- Organizational boundaries, operating boundaries and base year setting
- Emission source identification and Scope/category determination
- Creation of data forms, coefficient selection and calculation methods
- Department interviews, education training and application instructions
- Data integrity, rationality and evidence checking
- Establishment of inventory reports, inventories and internal procedures
- Third-party verification pre-verification and improvement support
Expected deliverables
- Project scope and inventory work plan
- Description of organizational and operational boundaries
- Emission source inventory and data responsibility table
- Activity data collection forms and calculation files
- List of emission coefficients and version sources
- Organize an inventory of greenhouse gas emissions
- Greenhouse gas inventory report
- Inventory management procedures or operation instructions
- Data gaps, estimates and improvement checklists
- Education training and verification preparation materials
The final project is adjusted according to the project agreement, applicable standards and the current situation of the enterprise; the verification statement is issued by an independent verification agency in accordance with its procedures.
What changes can be brought about after importing?
From temporary collection information to a fixed annual process
Each department knows what data should be provided, when it should be provided and what supporting evidence is required. Carbon inventories no longer rely solely on the personal experience of a few undertakers.
From only total emissions to visible emission hot spots
Companies can analyze emissions by category, category, location, energy source and month, and invest improvement resources into the sources that really matter.
Use different numbers from different questionnaires to consistent output
After the underlying data and calculation logic are unified, they can be converted according to different disclosure or customer formats, reducing duplication of operations and information conflicts.
From temporary search for documents before verification to continuous accumulation of supporting evidence
Activity data, coefficients, calculations and supporting evidence are linked to quickly illustrate the source of numbers and the internal review process when verifying sampling.
From one-time inspection to carbon reduction and risk management
Credible base years and emission hotspots can further support energy improvements, low-carbon procurement, product carbon footprints, carbon reduction targets and investment decisions.
Why choose Startrust?
Startrust combines sustainability consulting, carbon management systems, energy data and on-site integration capabilities to help companies transform standard requirements into actual data processes. The coaching process not only completes the report, but also pays attention to field definitions, rights and responsibilities, evidence, review and version management, so that the system can continue to operate in the next inventory cycle.
If the enterprise has many locations, many reporting personnel, or a large amount of data, it can also be connected to the Organizational Greenhouse Gas Inventory Management Module to centrally manage the reporting progress, emission coefficients, supporting documents, audit status, and inventory reports.
FAQ
Which one should I choose between ISO 14064-1 and GHG Protocol?
You should first look at the regulatory, customer, disclosure or verification requirements for which the audit results will be applied. When third-party verification is required, the acceptance criteria of the designated scheme must also be confirmed. If an enterprise faces multiple sets of requirements at the same time, it can create a copy of the underlying data and then make a classification comparison without having to collect it repeatedly.
Does Scope 3 have to check all of them?
Whether and to what extent coverage is required depends on applicable standards and disclosure requirements. Enterprises usually conduct category screening and materiality assessment first, and then arrange data improvement. It is not appropriate to completely ignore it due to difficulty in data, nor is it necessary to pursue the same accuracy for all categories in the first year.
How long does it take to prepare for the first interrogation?
The timetable will be affected by the number of sites, complexity of emission sources, data completeness, Scope 3 scope, internal response speed and whether to verify. The consultant will first take stock of the gaps and then propose a suitable work schedule. It is not appropriate to promise a single number of completion days before understanding the scope.
Is it necessary to complete the inspection by a third party?
uncertain. Whether verification is required depends on regulations, customers, disclosure regimes or voluntary needs of the company. If the results need to be used externally or comply with a specified plan, the verification criteria, assurance level and timeline should usually be confirmed in advance.
Is it possible to start without complete raw data?
An inventory of boundaries, emission sources and gaps can be established first, and reasonable estimates can be used in accordance with the guidelines, but assumptions, sources and limitations need to be recorded. Subsequently, estimates should be gradually replaced with original activity data to enhance the credibility of the results.
Should overseas locations and leasing offices be included?
It needs to be determined based on organizational boundary methods, ownership and control relationships, and cannot be determined solely based on geographical location or whether it is self-owned. Lease assets may also fall into different scopes under different boundary methods, and the contract and judgment basis should be retained.
What is the difference between consulting and third-party verification?
Consultants assist companies in establishing boundaries, methods, data, documents and internal capabilities; third-party verification agencies independently evaluate inventory statements and evidence. In order to maintain independence, the responsibilities and documents issued by the two are different.
Extended reading and related services
- What is the difference between ISO 14064-1 and GHG Protocol?
- What information should be collected in a greenhouse gas inventory?
- How to start corporate carbon management?
- ISO 14067 Product Carbon Footprint/Carbon Label Tutorial
- Enterprise internal carbon pricing system introduction consultant
- Organizational Greenhouse Gas Inventory Management Module
If you are evaluating the scope of the investigation, the depth of Scope 3, or the verification schedule, you can first prepare the company’s organization chart, list of locations, main energy sources, and external requirements currently received, and let a consultant assist you in making a preliminary judgment.