A business uses energy (electricity and fuel) to perform its operations and will likely produce some (or a lot!) of waste. This costs a business money in the form of monthly invoices from electricity, fuel, paper and waste companies. The use of these products also creates greenhouse gas emissions (GHG). Very simply, these emissions trap heat in the atmosphere. The increased emissions trapped in the atmosphere from the burning of fossil fuels and landfills is a major cause of human induced climate change.
You can read more about the Climate Emergency here
When a business implements a Sustainability Strategy it is important to know what the current and ongoing GHG emissions are, so you can determine whether your Sustainability Strategy is having a positive effect. This is also important because some of your actions for Sustainability will cost your business money, so you want to know it is working.
And lastly: You can't manage what you can't measure.
GHG emissions reporting involves calculating emissions produced from resource use, such as electricity and fuel consumption and waste to landfill. These are called 'activities' and they can be converted to a carbon dioxide equivalent (CO2-e) using standard emission factors. This will help a business understand environmental impact of your operations, compare yourself to other similar organisations, set reduction goals and track progress.
The first step in greenhouse gas emissions reporting is identifying your business’s key emission sources. Start by reviewing the bills and records for resources your business uses regularly—these often reveal significant emission contributors. Electricity usage, fuel for vehicles or equipment, water consumption, waste disposal, and office supplies like paper are common sources. By mapping these activities to their respective emissions, businesses can pinpoint where their greatest impacts lie, forming a solid foundation for accurate and comprehensive reporting.
If you're unsure where to start, your financial records are a great place to look. Invoices for services and resources like electricity, fuel, waste disposal, paper, and any other items charged by quantity used are often linked to greenhouse gas emissions. For example, electricity bills reflect energy consumption, which directly ties to emissions from electricity generation. Similarly, fuel invoices represent the emissions from transport or equipment use. Keep in mind, though, that some services, like internet or phone data, don't directly correlate with your business's emissions—we'll cover that next!
Greenhouse gas emissions are divided into three categories, or "scopes," to help businesses identify and report their contributions to climate change effectively. Dividing into scopes provides a clear framework for accountability.
Who is responsible depends on who is operationally and financially responsible for an asset (for example, one of the company cars or the warehouse where your team works).
Mandatory reporting will only cover scope 1 and 2 sources
The National Greenhouse Accounts (NGA) Factors are a set of standardized emissions factors provided by the Australian government to help businesses estimate their greenhouse gas emissions. These factors translate the consumption of resources (such as electricity, fuel, or waste) into emissions by applying a consistent conversion rate. For example, the NGA Factors specify how many kilograms of carbon dioxide equivalent (CO₂e) are emitted per kilowatt-hour of electricity used or per litre of diesel consumed. By using these factors, businesses can calculate their emissions in a straightforward and reliable way, ensuring their reporting aligns with national standards.
The NGA factors are updated annually and you can find the latest document here: National Greenhouse Accounts Factors - DCCEEW
Once you know your activity data (for example kWh used or kL used) you can calculate your emissions. These are examples only and it is important to determine what emission sources your business has.
Use this method to create a baseline year for your business. A baseline year is the first year in your strategic plan and you use this year to see if you are on track with your sustainability plan.
A baseline can be in the past, a calendar year or a financial year. You can pick a baseline year that corresponds to a year where you have the most availability of data (for instance, your electricity and fuel invoices)
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Once you know your baseline, it is time to set targets
Targets need to be linked to your strategic direction. For example, if your strategic goal is to increase revenue, then your targets can be around reducing consumption (which you pay for)
If your strategic direction is around brand, then your targets can be around reducing carbon emissions.
SMART goals is a good technique to use. It stands for:
SMART goals help you define what you want to accomplish, how you will measure your progress, and when you will achieve it. They also help you align your sustainability goals with your business objectives, values, and stakeholders' expectations. By setting SMART goals, you can avoid vague or unrealistic targets that may lead to frustration, confusion, or greenwashing.
Here are some examples of SMART targets for a business:
Emissions reporting isn’t a one-time task—it’s an ongoing commitment. Regularly monitoring your emissions allows you to track progress, identify areas for improvement, and ensure compliance with regulations. It also helps you detect anomalies, such as unexpected spikes in energy use or waste generation, which could signal inefficiencies or costly issues within your operations. By establishing a system for consistent data collection, analysis, and review, you can maintain transparency, address problems early, and adapt to future changes in regulations or business needs, keeping sustainability at the core of your strategy.
Tips:
In the context of sustainability and emissions reporting, it's important to understand key terms in the industry: