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Ready to get to grips with Greenhouse Gas (GHG) accounting?  By the end of lesson two, you’ll understand: The key principles of GHG accounting How GHG emissions, activity data, and emission factors work together Why different greenhouse gases have different global warming potential  Why this is relevant for product carbon footprints: Getting familiar with GHG accounting gives you basic knowledge to measure, interpret, and communicate product carbon footprints within a credible, consistent emissions framework.

What is GHG Accounting?

Greenhouse Gas (GHG) accounting is a bit like a carbon budget tracker.

More commonly known as a GHG inventory, this is a comprehensive reporting of the amounts and sources of greenhouse gases emitted to and removed from the atmosphere over a specific period (usually a year). GHG inventories report emissions at different levels, from country to organization right through to projects and products.   
 
Just like financial accounting has its golden rules, GHG accounting follows five key principles. These principles, established by the GHG Protocol, help ensure your emissions calculations are trustworthy and useful:

1. Relevance

Your GHG inventory should:

• Reflect your actual emissions
• Support decision-making
• Make sense for your specific business

2. Completeness

Your GHG inventory should:

• Include all significant emission sources

3. Consistency

This is about comparing apples with apples. When tracking emissions over time:

• Use the same methods year after year
• Document any changes you make
• Keep your approach steady

4. Transparency

Think of this as showing your work in a math problem. You should:

• Document your assumptions
• Explain your methods
• Make your sources clear
• Allow others to verify your work

5. Accuracy

Your calculations should be precise enough to trust. This means:

• Using reliable data
• Making careful calculations
• Avoiding bias
• Reducing uncertainty where possible

How M2030 helps: The platform gives you a clear path to follow these principles by providing clear guidance and tools. While you're responsible for your own data quality, M2030 is your guide, helping you stay on track with these principles.

How to calculate GHG emissions

Here's the guiding formula:

Activity data x emissions factor = Greenhouse Gas (GHG) emissions

Let's break this down.

(1) Activity data: What did you do?

Activity data is a measure of whatever you did that caused emissions. Think of it as answering questions such as:

• How much electricity did you use?
• How many miles did your trucks drive?
• How much natural gas did your factory burn?
• How much waste did you generate?

Before you start collecting data, check what emissions factors are available. This will tell you the type of data needed, the units of measurement, and whether you’ll need to do further conversions.

For example, let’s say you collected fuel consumption in kilograms, but the emission factor was in liters. This tells you you’d also need to collect data on the density of the fuel so that you can convert it correctly. 

Here are some common conversions and the data you may need:

Common GHG reporting conversions (not exhaustive)

Note: The table is not exhaustive, but a reminder to think through conversions you may need ahead of time, to save you going back and forth when collecting data.

(2) Emission factors: What's the impact of your action?

An emission factor represents the average amount of greenhouse gases (like carbon dioxide) that are emitted when you do something. Think of it as an average number that helps you guess the impact of different actions.

For example:

• Burning 1 liter of gas in a car releases a certain amount of carbon dioxide.
• Producing 1 kilogram of beef creates a certain amount of greenhouse gases.

So, an emission factor is a set number that scientists use to say, “if you do this, it usually results in this much pollution.” It’s not an exact measurement, but a useful estimate to help people and organizations understand their environmental impact.

An emission factor is usually written as:

Emission factor = mass of pollutant / reference unit

The reference unit can change depending on the activity or emission source. It might be based on mass (e.g., kilograms of fuel), volume (e.g., liters of fuel), distance (e.g., kilometers driven), energy use, time duration, or financial cost.

Note: Emission factors come in different types. Some are specific to your operations (primary) and others based on industry averages (secondary). We'll explore these different types and how to choose between them in Lesson 3.

(3) Understanding carbon equivalence 

When looking at emission factors, you’ll often see them expressed in carbon dioxide equivalent (CO₂e) instead of listing individual greenhouse gases. But why? 

Well, not all greenhouse gases are created equally. Different greenhouse gases trap heat differently and stay in the atmosphere for different amounts of time.

The CO₂e value makes comparisons easier. It’s a way to standardize emissions by showing how much carbon dioxide (CO₂) would create the same warming effect.

Each gas has a global warming potential (GWP), which tells you how much heat it traps compared to CO₂ over a set period (usually 100 years).

It works like this:

• Carbon dioxide (CO₂) is the baseline, with a warming power of ‘1.’
• Methane is about 29.8 times more potent, so:
  • 1kg of methane = 29.8kg of CO₂e.
• Nitrous oxide is about 273 times more potent, so:
• • • 1kg of nitrous oxide = 273kg of CO₂e.

You can find the latest GWP figures to use in IPCC’s Assessment Reports. These reports are updated every 5-7 years, so check you’re using the most recent one.  

Overall, the conversion makes it easier to add up the total impact of different greenhouse gases. Just as changing different currencies into your local currency helps you understand the total value, converting different gases into CO2e helps you know the total climate impact.

Example scenario (refresher) 🚚

Earlier, you learned the guiding formula for estimating emissions:

Activity data × emission factor = GHG emissions 

Now that you have knowledge on different elements of the calculation, let’s put it in practice so you can apply it to your own work more easily:

Imagine your company's delivery van drove 10,000 kilometers last year using diesel fuel. Here's how you'd work out the emissions:

1. Activity data = 10,000 kilometers (km)
2. Emission factor for diesel vehicles = 0.2 kg CO₂e per kilometer (example)
3. Calculation: 10,000 km × 0.2 kg CO₂e per km
4. Answer = 2,000 kg CO₂e

This shows how your activity (distance driven) combines with the emission factor (CO₂e per km) to give you the total greenhouse gas emissions from that activity.

Example scenario (walkthrough) 🔋

This time around, let's say you have little technical knowledge. Your team is busy, so it’s landed on you to work out the emissions from your facility’s electricity use last year.

Finding your activity data

Reach out to your administrative team and ask them to share last year’s utility bill. If they don’t have this available, your next best bet is to reach out to your energy supplier directly and ask for a copy of the energy bill. 

When you’ve got a copy of the correct bill for the correct timeframe, look out the total kilowatt-hours (kWh) your company used. This is usually found in the breakdown section, often on the second page or in a detailed usage section on the energy bill.

In this example, let’s say this was 50,000 kWh of electricity.

Finding your emissions factor

The emissions factor for grid electricity varies by country and region. Generally speaking, it can be found on your government’s database. But don’t panic, M2030 provides this information for you.

Completing the calculation

50,000 kWh x 0.5 kg CO₂e per kWh = 25,000 kg CO₂e

This shows how your activity (energy consumed) combines with the emission factor (CO₂e per kWh) to give you the total greenhouse gas emissions from that activity.

Check your knowledge

Time to see if it all makes sense! Take the quiz to check your understanding:

If your customers have asked you to complete M2030's Product Carbon Footprint Academy, taking this quiz will show them you're making progress. Your answers and scores will not be shared with them – only that you have taken the quiz.

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• Lesson 2 - GHG Accounting.pdf900 KB