Glossary

Activity data specifies how many units of a particular product or material that a company has purchased. For example, it could be liters of fuel, kilograms of textile, etc. In carbon accounting, activity data generally allows for more accurate emissions estimates than spend-based data.

A criterion for assessing whether a project has resulted in GHG emission reductions or removals in addition to what would have occurred in its absence. This is an important criterion when the goal of the project is to offset emissions elsewhere.

To set emission reduction targets and embark on the net zero journey, one must first specify a base year. The yearly reduction targets are set by the percentage of the total emissions in the base year.

A hypothetical scenario for what GHG emissions, removals or storage would have been in the absence of the GHG project or project activity.

GHG accounting and reporting boundaries can have several dimensions, i.e. organizational, operational, geographic, business unit, and target boundaries. The inventory boundary determines which emissions are accounted and reported by the company

Carbon accounting is the process of measuring how much carbon dioxide equivalents (CO2e) an organization (company, state, etc.) emits.

The carbon dioxide equivalent (CO₂e) is the mass of CO₂ which would warm the earth as much as the mass of any GHG. CO₂e provides a common scale for measuring the climate effects of all greenhouse gases.

All of the GHG emissions associated with a specific product or activity expressed as mass of carbon dioxide equivalent (CO₂e).

A business is carbon neutral when its business activities do not contribute any additional GHG emissions, on balance. Companies, processes and products become carbon neutral when they calculate their carbon emissions and compensate for what they have produced via carbon offsetting projects.

Carbon reduction is the process of reducing the amount of GHG emissions a company produces.

Carbon removal is the process of taking carbon from the atmosphere and storing it where it won’t contribute to climate change.

Carbon offsetting is the process of balancing a business’s carbon emissions by removing a proportionate amount of carbon from the atmosphere. The "offset" is originated from projects that constributes to reduce GHG, such as afforestation or projects that support the transition to renewable energy. The term “carbon offsetting” has become associated with low-quality activities and this leads companies to unintentionally “greenwash” by only compensating a fraction of their carbon footprint.

A carbon target is a commitment to reduce a company’s GHG emissions by a specified amount before a given year.

Cap and trade is a market-based approach to lowering GHG emissions. A central authority allocates a limited number of permits that allow the holder to emit a particular amount of greenhouse gases over a specific time period. Companies that want to emit more than their allocated share must purchase additional permits from other companies willing to sell them.

A business is climate positive (or carbon negative) if the net result of its activities is a decrease in the amount of carbon in the atmosphere.

Combination of GHG emissions data from separate operations that form part of one company or group of companies

The ability of a company to direct the policies of another operation. More specifically, it is defined as either operational control (the organization or one of its subsidiaries has the full authority to introduce and implement its operating policies at the operation) or financial control (the organization has the ability to direct the financial and operating policies of the operation with a view to gaining economic benefits from its activities).

The Corporate Carbon Footprint (CCF) is the carbon footprint determined for a company in a certain period. The emissions are calculated considering the organizational boundaries.

Direct emissions are those that a company generates while performing its business activities ("owned or controlled by the reporting company"). For example, this includes generation of electricity, manufacture and processing of materials, waste processing, and transportation using the company’s own vehicle fleet. Direct emissions are also called scope 1 emissions.

Downstream emissions are emissions that occur after a company has sold its goods and services. Together with upstream emissions (or supply chain emissions) they make up a company’s scope 3 emissions.

An emission factor (EF) measures the emissions associated with one additional unit of a specified activity. For example, it could be the extra emissions associated with spending one euro on clothing or transportation. It could also be the extra emissions associated with purchasing one kilogram of textile or one liter of fuel. If a company reports how much it has spent on various products and services, spend-based EFs allow us to estimate the company’s emissions. If a company more specifically reports the quantities of all purchased items, activity-based EFs provide an even more accurate estimate of the company’s emissions.

"Emission Reduction Unit (ERU) A unit of emission reduction generated by a Joint Implementation (JI) project. ERUs are tradable commodities which can be used by Annex 1 countries to help them meet their commitment under the Kyoto Protocol."

The release of GHG into the atmosphere.

The equity share reflects economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation. Typically, the share of economic risks and rewards in an operation is aligned with the company's percentage ownership of that operation, and equity share will normally be the same as the ownership percentage.

Uncertainty that arises whenever GHG emissions are quantified, due to uncertainty in data inputs and calculation methodologies used to quantify GHG emissions.

"Emissions that are not physically controlled but result from the intentional or unintentional releases of GHGs. They commonly arise from the production, processing transmission storage and use of fuels and other chemicals, often through joints, seals, packing, gaskets, etc. Examples include the leaks of gases or cooling liquid. They are part of a company’s scope 1 emissions."

Greenhouse gases (GHG) For the purposes of this standard, GHGs are the six gases listed in the Kyoto Protocol: carbon dioxide (CO2); methane (CH4); nitrous oxide (N2O); hydrofluorocarbons (HFCs); perfluorocarbons (PFCs); and sulphur hexafluoride (SF6).

GHG offset Offsets are discrete GHG reductions used to compensate for (i.e., offset) GHG emissions elsewhere, for example to meet a voluntary or mandatory GHG target or cap. Offsets are calculated relative to a baseline that represents a hypothetical scenario for what emissions would have been in the absence of the mitigation project that generates the offsets. To avoid double counting, the reduction giving rise to the offset must occur at sources or sinks not included in the target or cap for which it is used.

GHG Protocol Initiative is a multi-stakeholder collaboration convened by the World Resources Institute and World Business Council for Sustainable Development to design, develop and promote the use of accounting and reporting standards for business. It comprises of two separate but linked standards.

Greenwashing is the practice of providing misleading or false information about the sustainability of a company’s business activities. Because companies may not realize that majority of their emissions are in scope 3 or that many carbon offsets are of dubious efficacy, greenwashing can happen unintentionally as well as intentionally.

"A factor describing the radiative forcing impact (degree of harm to the atmosphere) of one unit of a given GHG relative to one unit of CO2."

A company’s indirect emissions are the emissions from their purchased energy (scope 2 emissions) and from their value chain (scope 3 emissions).

Emissions that are a consequence of the operations of the reporting company, but occur at sources owned or controlled by another company.

A quantified list of an organization’s GHG emissions and sources.

An imaginary line that encompasses the direct and indirect emissions that are included in the inventory. It results from the chosen organizational and operational boundaries.

Assessment of the sum of a product’s effects (e.g. GHG emissions) at each step in its life cycle, including resource extraction, production, use and waste disposal.

Life cycle assessment (LCA) is a method for evaluating the environmental impact of a commercial product or service through all stages of its life cycle, from cradle (raw material extraction) to grave (final disposal).

Burning of fuels by transportation devices such as cars, trucks, trains, airplanes, ships etc.

Net zero is a state in which the amount of GHG emitted into the atmosphere is counterbalanced by removing an equivalent amount of GHG. In a system that has reached net zero, the total amount of greenhouse gases (GHG) in the atmosphere will remain constant.

The Paris Agreement commits countries to limit global warming to well-below 2°C above pre-industrial levels, ideally following a more ambitious trajectory of 1.5°C. Any greater level of warming than 1.5°C could lead to vastly more destructive climate changes. Scientists have calculated that in order to follow a 1.5°C trajectory, the world must cut its emissions in half by 2030 and reach net zero by 2050.

Emissions generated from manufacturing processes, such as the CO2 that is arises from the breakdown of calcium carbonate (CaCO3) during cement manufacture.

The Product Carbon Fooprint measures how much CO₂ equivalent were generated in the life cycle of a product. The emissions are calculated implementing a Life Cycle Analysis.

"Productivity/efficiency ratios. Ratios that express the value or achievement of a business divided by its GHG impact. Increasing efficiency ratios reflect a positive performance improvement. e.g. resource productivity(sales per tonne GHG). Productivity/efficiency ratios are the inverse of intensity ratios."

An emissions reduction target is science-based if it accords with what climate science expose about how to meet the goals of the Paris Agreement: to limit global warming to less than 2°C above pre-industrial levels and ideally pursue a stricter 1.5°C target.

Scope 1 emissions are direct GHG emissions that a company generates while performing its business activities. This includes generation of electricity, manufacture and processing of materials, waste processing, and transportation using the company’s own vehicle fleet.

Scope 2 are emissions that a company causes indirectly when the energy it purchases and uses is produced. For example, for our electric fleet vehicles the emissions from the generation of the electricity they're powered by would fall into this category

Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. Scope 3 emissions include all sources not within an organization's scope 1 and 2 boundary

The spend-based method of calculating GHG emissions takes the financial value of a purchased good or service and multiplies it by an emission factor – the amount of emissions produced per financial unit – resulting in an estimate of the emissions produced. Since spend-based methods’ emission factors are built on the industry average greenhouse gas emissions levels, spend-based calculations can lack specificity. For example: if you buy a chair, a spend-based approach would only factor in that you bought a piece of furniture, and wouldn’t account for whether the chair was made of iron or wood. Activity data is generally more reliable.

Upstream emissions are emissions that occur upstream in the company’s supply chain. Upstream emissions fall under the scope 3 emissions category. They are also known as supply chain emissions.

Value chain emissions (also known as scope 3 emissions) are the emissions that occur either upstream (i.e. in the supply chain) or downstream (i.e. during product use and disposal) of the company itself. For many companies, value chain emissions make up 90% of their total emissions, which makes it crucial for these emissions to be taken into account when setting reduction targets.