Understanding ESG Reporting Standards and Frameworks The use of third-party ESG disclosure standards and frameworks is the starting place for any voluntary ESG reporting your business wishes to conduct. In 2022, the use of ESG and sustainability reports continued to…Read full post
Emissions Tracking – The Key to Energy and Sustainability Reporting
What is emissions tracking?
Emissions tracking is a way for businesses to gauge their operational efficiency and sustainability by tracking the green-house gas (GHG) emissions generated by the electricity needed to maintain their operations.
What are the benefits of tracking and reporting emissions?
Tracking and reporting emissions helps your company increase transparency to its investors, clients, and the public, increase efficiency and lower unnecessary energy costs, and increase knowledge of energy consumption trends.
How can I track emissions?
There are two primary ways to track your emissions: Average Annual Emissions Factors and Real-time Emissions Data.
Recently, the Securities and Exchange Commission (SEC) proposed a rule that, if passed, will require all publicly traded companies to disclose their Scope 1, Scope 2 and possibly Scope 3 greenhouse gas emissions. This means that companies will have to start tracking their emissions in order to prepare for mandatory reporting. In this article, we’ll explore what emissions tracking entails, the benefits of tracking and reporting your emissions (aside from SEC compliance!), the best way to track emissions, and more.
What Exactly is Emissions Tracking?
Emissions tracking is a way for companies and organizations to gauge their operational efficiency and sustainability by tracking the greenhouse gas (GHG) emissions generated by the electricity needed to maintain their operations. Once your company knows how much CO2 it emits, it can work on reducing that amount through various processes, e.g., reducing electricity consumption.
The Benefits of Tracking (and Reporting!) Your Emissions
Even if your company will not be affected by the SEC proposal (if, for example, you are a private company), emissions tracking and reporting is still enormously beneficial. Tracking and reporting emissions helps your company:
- Increase transparency to its investors, clients, and the public
- Increase efficiency and lower unnecessary energy costs
- Increase its knowledge of energy consumption trends
What is the Best Way to Track Your Emissions?
There are two primary ways to track your emissions: Average Annual Emissions Factors vs. Real-time Emissions Data.
- Average Annual Emissions Factors estimate the amount of GHG emitted by the grid over the course of the year. This method has a downside of being less accurate when used to compare emissions reductions at different points in time since the emissions intensity of the grid varies greatly throughout the year (and even hour to hour). For example, on a windy, sunny day, renewables like wind and solar make up a higher percentage of the energy supply, so the grid will have lowered emissions. Average Annual Emissions Factors only consider a change in the total amount of consumed energy, and do not note when that energy is deferred, stored, or consumed.
Calculating emissions using Average Annual Emissions Factors
- Real-time Emissions Data is rapidly becoming the superior way to evaluate GHG emissions. Generated by interval meters and/or smart meters, real-time data allows you to look at what is going on in your building right now. Thus, it is much more efficient in managing a building than monthly utility bill data. Not only that, real-time data improves the accuracy of your GHG reporting and allows for more effective demand response. For example, A 2017 study on the California Self Generation Incentive Program (SGIP), showed the value of real-time emissions data. The program had set out to show the ability of battery storage to reduce emissions. However, during the first years of the program, real-time data monitoring showed that emissions actually increased – the batteries were charging and discharging at times that did not align with periods of lower grid emissions intensity. The program was able to use this information to correct the error. Such detailed monitoring and information may not have been possible without real-time data.
Calculating emissions using Real-time Emissions Data
- The US Environmental Protection Agency (EPA) tracks emissions for 3 major pollutants through its Continuous Emissions Monitoring Systems: CO2, SO2, and NOx.
- The EPA’s Emissions and Generation Integrated Resource database tracks plant, BA, and national statistics at the annual level.
- The US Energy Information Administration (EIA) Electric System Operating Data website reports on hourly consumption, production, and interregional exchanges at the BA level.
- WatchWire’s Guide to the 2022 SEC Climate Disclosure Rules. This guide outlines and clarifies what the robust regulatory document mandates, what to expect in terms of impacts of the regulatory changes, insights into why this shift in financial and sustainability reporting is occurring, and how to prepare as a corporate entity for the future of sustainability reporting.
How WatchWire Can Help Your Company Track and Report Its Emissions
WatchWire can track your company’s Scope 1, 2, and 3 emissions and help you report them as well. The WatchWire platform acts essentially as an emissions calculator like that of the Greenhouse Gas Protocol and our carbon accounting/emissions calculation follows the Greenhouse Gas (GHG) Protocol’s Corporate Standard. By default, WatchWire uses EPA E-Grid subregion emissions factors in the U.S. and IEA factors internationally. (For reference, an emissions factor is a representative value that relates the quantity of a pollutant released to the atmosphere with an activity associated with the release of that pollutant, e.g., burning fuel oil. Emissions factors facilitate estimation of emissions from various sources of air pollution.) Tracking of Scope 1 commodities like natural gas, fuel oil, propane, etc. are all based on the EPA’s Inventory for Greenhouse Gasses.
In addition, WatchWire can handle both market-based and location-based emissions factors. A location-based factor represents the emissions your organization is releasing into the air with nothing else (like renewable energy credits or power purchase agreements) to offset those emissions. Market-based factors, however, represent the emissions that result from the choices your organization makes, e.g., deciding to purchase renewable energy credits, participate in power purchase agreements, etc. Market-based factors are always the same number or lower than location-based factors.
WatchWire also tracks your organization’s global warming potential (GWP). The GWP is an index developed to compare the global warming impacts of different gases.
WatchWire’s methods not only ensure you are reporting accurate, complete ESG data into your sustainability reporting frameworks, but also keeps you on track to meet company-wide sustainability goals.
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