Measuring Your Greenhouse Gas Impact: A “How to Guide” for Small Business

Recently, we shared that HeatSpring measured our greenhouse gas (GHG) impact, which is part of our environmental commitment as a Certified B Corp. If you want to learn more about how we measured up, you can check out last week’s article in the HeatSpring Magazine. If you are a small- to mid-sized business and would like to better understand your impact on the environment, read on for a step-by-step guide to getting started with your own GHG inventory. 

First, Some Definitions

What do we mean by a “greenhouse gas inventory,” and what is included in the term “greenhouse gas,” anyway?  

A greenhouse gas inventory is a list of emission sources and the associated emissions quantified using standardized methods (Guide to Greenhouse Gas Management for Small Businesses and Low Emitters, U.S. EPA, 2017.)

The ‘emission sources,’ or, greenhouse gases in the first definition include carbon dioxide, methane, nitrous oxide, and fluorinated gases. Greenhouse gases trap heat in the atmosphere, causing measurable changes in climate. 

Conducting the Baseline GHG Inventory

To conduct your own greenhouse gas inventory, you can follow these steps.

1. Define organizational boundaries. Before getting started, your organization will want to determine which facilities (if you have them) and operations are included in your inventory. To figure this out, consider things like ownership (or percent ownership) of facilities and whether you have financial and/or operational control over facilities and the systems therein. For instance, do you pay a utility bill and therefore have access to data for any leased facilities?

2. Determine your scope. Emissions are divided into three categories, based on the ability of the organization to control them. Scope 1 (direct) emissions are from sources that the organization owns or controls, like natural gas-fired boilers or vehicle fleets. Scope 2 (indirect) emissions include purchased electricity, heat, or steam. Scope 3 indirect emissions include things like business travel, employee commuting, and product transport (see graphic. Credit: U.S. EPA.)
   
   As you look more closely at your emissions sources, it helps to refer to one of the GHG calculators to see what sources companies are tracking. We used the U.S. EPA’s Simplified GHG Emissions Calculator (Sept. 2024.) This is not the only calculator out there, but it is free, accessible, and relatively easy to use, being in an xls format. 

3. Establish a baseline year. Once you decide WHAT to measure, determine WHEN. Typically organizations select the most recent year for which they have complete operational data. This year will be the baseline to which future years are compared to understand how your actions are impacting emissions. 

4. Collect data. Then the fun really begins! Using the list of sources you’ve compiled, collect information to help you calculate the annual emissions for each source in metric tons of carbon dioxide equivalent (MTCO2e.) Refer to the calculator to understand what data to collect and in which unit of measurement. The unit of measurement is very important to pay attention to and the greatest risk to introduce errors. 
   
   For Scope 1 and 2 sources, data will come from things like utility bills and direct measurement of fuel consumption. For Scope 3 you’ll likely use data from (credible) third party sources, or things like national averages if data is not available. 

5. Calculate emissions for the baseline year. Use a tool like the EPA Calculator to enter the data. You may wish to copy formulas for the sources specific to your scope in the calculator to build a custom spreadsheet. This will make things easier to interpret and update, but be sure to add back in fields or worksheets if you introduce new sources.
   
   It turns out that WHERE you use energy is almost as important as how much you use when it comes to emissions. Calculating your final estimate includes ‘emissions factors’ based on where the energy was produced. This means that buildings operating and employees working in different states or utility regions can have different GHG impacts.

6. Share your impact. Depending on why you set out to measure your GHG impact, don’t forget to share what you’ve learned with colleagues, customers, and other stakeholders. You may wish to put your impact in some context, such as comparisons to similar businesses, or your ‘share’ of local or regional usage.

After the Baseline Inventory

That was a lot of work! Now that you have a handle on what your impact is, you have a powerful tool to figure out what to do about it. Tune in next week, when we will cover what happens after the baseline inventory, including development of a GHG inventory management plan and setting a GHG reduction goal. We’ll also cover some special considerations for virtual businesses.