Greenhouse Gas Emissions Learn how to correctly analyse this topic.

Sarah Simon

25 min Read Time | November 30th 2022

Key Takeaways


When assessing a company’s GHG emissions, make sure to look at the different Scopes (1, 2, and 3), and be critical when evaluating the disclosed information.


As the final impact of energy is on GHG emissions and links directly to Scope 2, add the total operational energy consumption and the % of renewable energy consumed in one sentence.


If available, mention the efforts made to transition to renewable energy, either distributed, generated, and/or stored in one sentence, that is not consumed for the company's own operations.

Executive Summary

  1. When assessing a company's GHG emissions, look at the different Scopes (1, 2, and 3) and be critical when evaluating the disclosed information.

  2. If a company is underreporting its Scope 3, i.e., not addressing all of the categories, then it is essential to estimate its true emissions.

  3. Different gases have different effects; therefore, it is essential to evaluate how much of the gas is released into the atmosphere, how long it will last/its persistence, and how strong its effect is.

  4. GHG emissions are an output; however, it is essential to include the impact of these emissions in the analysis. This will improve the analysis' readability and enable readers to rate it easily. For instance, information on how and how much these emissions contribute to climate change, if the industry's emissions are in line with the Paris Agreement, or/and natural catastrophes, or/and biodiversity loss will improve the impact analysis.

  5. Benchmark and compare emissions to the industry average, or use an industry average to allow the reader to gauge the impact. Ensure that the metrics are comparable to GHG emissions (such as by looking at CO2e and not CO2).

  6. Avoid describing a company's year-on-year emissions, leading to analyses about remediation rather than impact.

  7. As secondary points (which do not take away from the company's Scope 1 + 2 + 3 and even estimated Scope 3):

    1. The total operational energy consumption and the % of renewable energy consumed. Acquired energy falls under Scope 2, and the share of the renewable energy consumed directly impacts the company's absolute emissions. This is especially true when estimating companies' Scope 3 when they are under-reporting.

    2. If available, the efforts made to transition to renewable energy, either distributed, generated, and/or stored, expressed in GWh. This does not include investments in renewables or green bonds, nor does it include energy consumed for the company's own operations.

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What Are Green House Gases?

Greenhouse gases (GHG)

These are gases that contribute to the greenhouse effect on Earth by trapping gases into the atmosphere.

By order of abundance in the atmosphere, GHG are:

  • Water vapour (H2O)

  • Carbon dioxide (CO2)

  • Methane (CH4)

  • Nitrous oxide (N2O)

  • Ozone (O3)

  • Chlorofluorocarbons (CFCs)

  • Hydrofluorocarbons (includes HCFCs and HFCs)

Most of these gases are naturally present in the atmosphere. They are not directly harmful to humans or animals’ health (except ozone (O3) above concentrations of about 0.1 ppm). However, human activity has increased their concentration, creating a warming effect with rippled effects on the environment and society.

Others are pure products of human activity (CFCs, HCFCs & HFCs).

According to the EPA, the impact of these gases on climate change depends on three key factors:

How much is in the atmosphere?

  • Concentration is the quantity of a particular gas in the air - increased emissions of GHG emissions result in higher concentrations in the atmosphere.

  • When measuring GHG emissions, two measures are commonly used:

1. “CO2 equivalent” units of CO2 (CO2e)

2. Another measure is the atomic weight, typically “carbon.”

However, converting GHGs to kg of carbon is not helpful as it does not compare different GHGs.

Please use CO2e. Make sure that the metrics are actually comparable to GHG emissions (such as by looking at CO2e and not CO2). CO2 emissions make up 76% of the CO2e.

Companies in their reports mention their data in CO2e, while some sites that give per capita emissions use CO2 metrics. Therefore, please convert CO2 to CO2e (equivalents) for an accurate comparison.

How long do they remain in the atmosphere?

  • These gases can stay in the atmosphere for different amounts of time, ranging from a few years to thousands of years. However, these gases remain in the atmosphere long enough to become well mixed, so the amount measured in the atmosphere is equivalent worldwide, regardless of the emissions’ location.

How strongly do they impact the atmosphere?

  • Some gases are more effective than others at warming the planet. For each greenhouse gas, a Global Warming Potential (GWP) has been calculated to reflect how long it stays in the atmosphere on average and how strongly it absorbs energy. Gases with a higher GWP absorb more energy, per unit of mass, than gases with a lower GWP, thus contributing more to warming Earth.

The IPCC considers 6 GHGs to be relevant for human-caused climate change:

Greenhouse Gas

Global Warming Potential

Carbon dioxide (CO2)


Methane (CH4)


Nitrous oxide (N20)


Hydrofluorocarbons (HFCs)

124 - 14,800

Perfluorocarbons (PFCs)

7,390 - 12,200

Sulfur hexafluoride (SF6)


Nitrogen trifluoride (NF3)


  • “CO2e” (e standing for “equivalent”) takes into account the various greenhouse effects of these gases in terms of warming and lasting. This is a simple unit that agglomerates ALL GHG.
  • Even if the individual warming effect can be mentioned in an analysis, it can be misleading to state that, for example, methane (CH4) has 25 times more GH effect than CO2, as this is already accounted for in the CO2e reporting.


Scientists define energy as the ability to do work. We have learned to change energy from one form to another, to use it to do work.

Different forms of energy exist, including:

  • Heat

  • Light

  • Motion

  • Electrical

  • Chemical

  • Gravitational

There is also a multitude of sources of energy, which can be split into two basic categories:

  • Renewable energy sources, which can be easily replenished (biomass, hydropower, geothermal, wind, solar, nuclear energy*)

  • Nonrenewable energy sources, which cannot be easily replenished (petroleum, hydrocarbon gas liquids, natural gas, coal)

*Nuclear energy can sometimes be considered by companies as renewable, so use your critical judgment when reporting their figures.

Companies consume energy, often electricity, throughout their operations, products, and services. All forms of electricity generation and consumption have an environmental impact on air, water, and land, but it varies depending on the type of energy and quantity.

Energy vs Electricity

As you look through a company’s report, they will often state their electricity consumption, especially renewable electricity consumption. Keep in mind that electricity is only one part of their energy consumption. For example, the company may report that they use 50% renewable electricity, but you may find that only 15% of their total energy consumption is renewable.

Energy vs Power

Energy is the quantitative property that must be transferred to an object in order to perform work on, or to heat, the object”. In other words, it describes the quantity of work needed to perform a particular task.

Power is an “amount of energy transferred or converted per unit time”. In other words, it describes how fast a task can be done.

For example, a typical windmill delivers 3 megaWatt (MW) = 106 W. During one hour at full power, it will have produced 3 MW x 1 hour = 3 MWh (Energy = Power x Time)

Thus, energy units: GJ, Watt Hour (Wh, kWh, MWh, and further multiples)

Power units: Watt (W, kW, MW, and further multiples)



SDG Choice

Impact Category: Processes for all except

  • Biofuels
  • Coal Operations
  • Forestry Management
  • Gas Utilities & Distributors
  • Oil & Gas - Exploration & Production
  • Oil & Gas - Midstream
  • Oil & Gas - Refining & Marketing
  • Oil & Gas - Services

SDG: 13

ILG Theme: Climate Stability


The introduction should describe the broader impact issue to set the stage for the reader.

Provide context information about the impact of greenhouse gas emissions on the planet and the urgent need to reduce emissions to mitigate climate change. Then, dive into the contribution of the particular industry to global GHG emissions.

Core Analysis

The values to be added are the following:

  • Total GHGs emitted

  • Scope 1

  • Scope 2

  • Scope 3

  • Operational Energy Consumed

  • Share of renewable energy consumed

Mention the total amount of greenhouse gases emitted by the company in a year. Ensure to report on the most recent year for which data has been disclosed by the company or external sources.

Since the Kyoto Protocol and many mandatory reporting initiatives from governments, most companies disclose their GHG emissions (although not always fully*) in their annual CSR/Sustainability report or sometimes CDP report (you can use it if it is publicly available).

When analysing a business's emissions, you should segment the emissions by the three Scopes.

Scope 1 – All Direct Emissions from a company's activities or under its control. It includes fuel combustion on sites, such as gas boilers, fleet vehicles, and air-conditioning leaks.

Scope 2 – Indirect Emissions from electricity purchased and used by the company.

Market vs. location-based emissions

  • Location-based emissions are calculated through the average of all the emissions from energy production sources that supply the grid a company uses in a specific country or region.

  • Market-based emissions are claimed through certificates to specify what kind of energy the company is buying.
    • It is worth mentioning that these certificates can be from non-renewable sources. For example, a company can deal with an energy company that produces energy through coal to buy an x amount of power at a fixed price for a year. They would then issue a certificate to show the company's energy was this specific energy that the company supplied to the grid.

    • Market-based emissions can tell us how committed a company is to reducing energy-related CO2 emissions. If its market-based emissions are higher than location-based, it probably buys non-renewable energy certificates (cheaper in some instances). And if market-based CO2 emissions are lower, that means the company is making an effort to purchase renewable energy.

    • When companies report both location and market-based emissions, please report the market-based emissions.

Scope 3 – All Other Indirect Emissions from activities of the company occur from sources that they do not own or control.

  • These are usually the most significant share of the carbon footprint, covering emissions associated with business travel, procurement, waste, and water.

*Often, companies do not disclose their Scope 3 emissions fully. You must be critical in your analysis and go beyond the company's CSR report. Explain whether their Scope 3 emissions should be higher than reported. For example, a bank reports its Scope 3 emissions as business travel, commuting emissions, etc. However, it often does not consider the emissions from its investments, which can be carbon-intensive.

It is very important to understand if the disclosed Scope 3 is Complete or Partial.

  • One way to verify this quickly is to use CDP. When checking Scope 3 data in the CDP report, the company will provide all of the Scope 3 values, and for those not disclosed, they will provide some sort of explanation.

  • If you find that the company's Scope 3 in the CDP report discloses 5 categories only, yet for the remaining 10, it states that the values are not calculated because deemed irrelevant, then we would consider the data to be Complete.

  • Similarly, if they report on 5 categories, 8 are not calculated because irrelevant, and 2 are "NOT YET CALCULATED, YET RELEVANT," then the data is Partial.

  • For some streams of Scope 3, the companies might state that a category is Not Evaluated. If this is the case, the data is also Partial.
    • The meaning is: "select this option if you have not yet investigated this Scope 3 category and therefore do not know whether or not it is relevant for your business."

  • If the company does not have a CDP report, you would need to understand if the data is Complete from its environmental reports.

For Financial Institutions:

The Partnership for Carbon Accounting Financials (PCAF) has developed a standard to allow financial companies to calculate and report their financed emissions i.e. emissions associated with various assets like loans, bonds, etc. These financed emissions fall under category 15 (Investments) of Scope 3 but are usually not reported clearly by companies along with their other emission figures.

Hence, for companies in the finance sector (commercial banks, insurance, investment banking & brokerage, etc.), the note should be structured as follows:

  1. Mention total reported emissions and break them down into Scope 1, 2, and 3. Mention the categories included in the reported scope 3 emissions.

  2. Go to this link and search for the company’s name to check whether the particular company disclosed its financed emissions as per the PCAF standard.

    1. If it does so -
      1. Look up the financed emissions in the company’s report. They are usually present there but are mentioned separately. They can also be found in the attached document on the linked webpage.

      2. Mention the total absolute financed emissions in the note and add them to the reported Scope 3 emissions to get the complete Scope 3 emissions and complete Scope 1, 2, and 3 emissions.

      3. Sometimes the financed emissions are not for the same year as the other reported emissions. However, we can assume they are around the same for the reported year and mention them as an “estimated” figure.

    2. If the company does not disclose financed emissions, estimate the total Scope 3 emissions based on the Impaakt methodology using the Impaakt-developed multipliers that can be found here.


The company disclosed financed emissions - Caixabank was responsible for about 30.9 Mn tCO2e of greenhouse gas emissions in 2022

The company did not disclose financed emissions -In FY2022, Bendigo & Adelaide emitted an estimated 50.19 Mn tCO2e of GHG emissions

For Automobiles:
Unlike other manufacturers, it is said that 98% of an automobile company's emissions come under Scope 3 for the most part, the use of the cars.

If the company only reports on CO2 and not CO2e (or GHG emissions), you can use a proxy to estimate total GHG emissions.

This source shows that carbon dioxide makes up 76% of the total GHG emissions.

After reporting the company's overall emissions, you should benchmark these emissions. This will help readers assess the severity and value of the impact.

How can you do that?

  • Translate the company's emissions to an easier-to-understand unit by using the EPA Equivalencies calculator or comparing it to countries, corporations, or households' GHG emissions.

For example:

    • World annual GHG emissions = 50 billion tonnes
    • Switzerland's total yearly emissions = 40 million tonnes


  • Then, compare the company's emissions with the industry average.

Thresholds: There are no thresholds for this topic. GHG emissions are a critical impact that all companies have across all industries.

Data Points:

  • For the industries where we have multipliers, use them to estimate the companies' Scope 3 emissions. Here, the data is considered Estimated and Complete.

  • For the industries where we do not have multipliers, mention what the company has disclosed as its Scope 3 emissions. Here, the data is considered Disclosed and either Complete or Partial.

  • If the company does not have a CDP report, you would need to understand if the data is Complete from its environmental reports.


Avoid comparing the company's year-on-year GHG emissions, which leads to writing about remediation measures. Always remember to give the broader impact first.


We want to have homogenous and comparable units. Therefore, we will accept values expressed in tonnes (t) and Gigawatt hours (GWh)

If the figures are given in tCO2 in the report

When to convert: (rare case) CDP report is not available and the company belongs to a high Scope 1 emissions industry (eg. agriculture, oil & gas, etc.) but still does not disclose GHG emissions (methane, nitrous oxide, etc.) other than CO2

This source can be used for conversion, which states that CO2 accounts for 76% of total GHG emissions:

When not to convert: CDP report is available and it can be confirmed that the data is actually in tCO2e, the company belongs to a low Scope 1 emissions industry, and the company uses the term tCO2e at other places in the report implying that it uses tCO2 and tCO2e interchangeably

Example: Yamaha Motors - the same numbers are reported as tCO2 in the company's report and tCO2e in the CDP report.

If the figures are given in tonnes or metric tons in the report, then we can report them as it is but we will write them as tonnes in the analysis for consistency -> no need to convert anything

1 tonne = 1 metric ton

If the figures are given in tons* in the report, then we must check whether the company has used the metric system or not (check whether the company has used kg, km,°C, etc.);

If yes, then tons actually mean tonnes -> we can report the figures as it is but write them as tonnes in the analysis for consistency -> no need to convert anything

If not, then tons mean US tons -> we will have to convert it to tonnes (source)

*Japanese companies use the wording tons, although this remains the metric system, and thus no conversion is needed

Sources (image)

Operational Energy Consumption

As secondary points to the analysis, include the following:

  • The total operational energy consumption and the % that was renewable energy.

In your analysis, you must look at the company’s overall operational energy consumption. Make sure that the discussion regarding operational energy consumption fits into the broader discussion surrounding GHG emissions in a logical manner. Most companies now report this information in their CSR/Sustainability annual report. Make sure to report the most recent year. Yearly energy and electricity consumed should be expressed in GWh.

Link the discussion of operational energy consumption to GHG emissions. The acquired energy is part of Scope 2. If a company consumes the majority of energy from fossil fuels, this partly or greatly explains a high absolute amount.

This is especially true when using these figures to estimate the company's true Scope 3.

If the renewable energy consumed is very high, this could explain why the company is performing better than its close competitors. The opposite is also true.

CautionBe careful not to mix up % the renewable share in electricity and the % share in total energy. Some companies report % out of only electricity consumption, as it is higher.
The % will not be the same considering total energy consumption (electricity+ fuels, etc.). The company may be using 100% renewable electricity, but when compared with total energy use that could include fuels (natural gas, petrol, etc.), the % share of renewables will not be 100%.

  • If any, the efforts made to transition to renewables, expressed in GWh and how that converts to tonnes of CO2e emissions.

If the company has a direct and current impact on generating, distributing, and/or storing renewable energy, it can be captured in the analysis.

If the company does not generate renewable energy for others to use, you do not need to address this point in the analysis.

Note that this should not be included for industries with renewable energy solutions offered where the energy generated meets the thresholds.

This point is especially relevant for energy companies. However, companies from various industries may have projects or initiatives to generate renewable energy for other businesses or individuals to use.

Therefore, double-check whether there is an analysis already published, and if not, if it meets the 10,000 GWh absolute or 20% relative threshold.


  • Oil & Gas - Exploration & Production
  • Oil & Gas - Services
  • Oil & Gas - Midstream
  • Oil & Gas - Refining & Marketing
  • Electric Utilities & Power Generators
  • Fuel Cells & Industrial Batteries
  • Solar Technology & Project Developers
  • Wind Technology & Project Developers

You may mention the energy efficiency initiative the company has put in place. However, this should be secondary to its current impact (i.e., total energy consumed). Suppose a company has set an initiative in place a few years prior. In that case, it is encouraged to show if the renewable energy consumption has increased since the baseline year/ if the total energy consumption has decreased, etc. However, your analysis should not be based on year-on-year changes or remediation.

Note: We want to avoid people giving relatively average scores because we discuss initiatives to transition to renewable energy or the amount of renewable energy consumed within the company's operations. Therefore, how it is phrased needs to be done carefully; for example, having heavily polluting industries be taken seriously.

How to Calculate Scope 3 Emissions when not Reported

It is essential to make an extrapolation of the company’s Scope 3 emissions, which often represent the majority of the company’s total GHG emissions.

If the company does not disclose its emissions, estimate the total Scope 3 emissions based on the Impaakt methodology using the Impaakt-developed multipliers that can be found here.

IMPORTANT ! When making your estimations, it should be very clear in the analysis that an educated assumption was made based on competitor information or proxies. The analysis should never allude to the calculations being 'facts'. 

Instead, it should say something like "As the Scope 3 emissions were not disclosed by the company or external sources, [using a competitor comparison] or [based on proxies], Scope 3 can be estimated to amount to X tonnes of CO2e emissions...".

Please always check whether Scope 3 is under-reported or not. There are 15 categories within Scope 3, and not all companies report on each.

For instance, if a company's Scope 3 emissions are only accounting for commuting and not for the use of sold products or others when you know that there are external emissions, Scope 3 should be estimated using the multipliers.


1. Check if the assigned analysis has more recent data (we require the latest data available)

NO: do not refresh the analysis and please report it (via the Report feature or to Sabine or Sarah)

YES: Move to step 2

2. Update the analysis following our Important Metrics & Standards 

3. Check if the initiatives and targets mentioned are up to date

NO: fix them

YES: move to step 4

4. Check if there are any comparisons with competitors or benchmarks in terms of people

YES: remove them

NO: move to step 5

5. Check the intro: Is it up to standard? Are sources working? Is data current and relevant?

YES: do not refresh the introduction

NO: move to step 6

6. Fix the intro following Useful Sources (section 3 of the presentation)

7. Fix the Headline

8. Fix the Conclusion, if needed

9. Update the data points as per the available data


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