GHG Protocol: Masterclass 2: Operational Boundaries and Emission Factors

This is the second masterclass in the GHG Protocol Corporate Standard Masterclass Series, providing a practical look at how to define operational boundaries and calculate emissions once organisational boundaries are set. It covers Scopes 1, 2 and 3, how to account for leased assets, how to source and apply emission factors, and when it's appropriate to use proxies and estimation methods to fill data gaps. Real-world examples throughout show how these concepts apply in practice.

This is the second masterclass in the GHG Protocol Corporate Standard Masterclass Series. It builds on the organisational boundaries covered in the first session by showing how to define which emissions sources within those boundaries are counted, and how to calculate them.

It focuses on applied learning, using real-world examples to show how to classify emissions into scopes, account for leased assets, source credible emission factors, and use estimation methods responsibly.

You will learn how to:
◆ Distinguish between Scope 1, Scope 2, and Scope 3 emissions
◆ Identify what counts as Scope 1 emissions, including stationary combustion, mobile combustion, process emissions, and fugitive emissions
◆ Identify what counts as Scope 2 emissions, including electricity, steam, heat, and cooling consumption
◆ Recognise the scale and categories of Scope 3 value chain emissions, both upstream and downstream
◆ Apply GHG Protocol guidance to account for leased assets under different organisational boundary approaches
◆ Source and apply emission factors, and follow best practice when doing so
◆ Calculate emissions using activity data and emission factors
◆ Use proxies and estimation methods appropriately when direct activity data is unavailable

Learning Outcomes

By completing this masterclass, you will build practical capability in classifying emissions by scope, sourcing credible emission factors, and applying proxies and estimates without compromising inventory quality.

Operational Boundaries and the Three Scopes
◆ Understand how operational boundaries determine which emissions sources are included and how they are classified
◆ Distinguish Scope 1 direct emissions from Scope 2 indirect emissions from purchased energy, and Scope 3 other indirect emissions in the value chain
◆ Recognise why Scope 3 often represents 70 to 90% of total emissions for many organisations, and why the GHG Protocol maintains a separate Value Chain Standard for this category

Accounting for Leased Assets
◆ Understand why leased assets, such as office space, vehicles, and data centres, are a common challenge area in emissions accounting
◆ Apply the correct scope classification depending on whether a company controls the leased asset or not
◆ Recognise how the same lease can be reported differently depending on whether a company uses the operational boundary or the financial/equity control approach

Emission Factors
◆ Identify where to source emission factors, including IPCC guidelines, national inventories, industry associations, and suppliers or utilities
◆ Apply best practices for sourcing emission factors, including using data hierarchies, documenting sources, updating factors regularly, and applying conservative assumptions
◆ Apply the standard emissions calculation formula: activity data multiplied by emission factors

Using Proxies and Estimation Methods
◆ Understand when proxy data and estimation methods are appropriate, including cases of data unavailability, resource constraints, and materiality decisions
◆ Distinguish between common estimation methods, including spend-based methods, average data methods, proxy indicators, and hybrid methods
◆ Recognise the limitations and risks of proxies and estimates, including reduced accuracy, added uncertainty, overreliance, and the difficulty of demonstrating genuine reductions

Applying This to Your Organisation
◆ Review real-world examples of leased office space, leased vehicles, leased data centres, and leased warehouse space to see how scope classification changes with different boundary choices
◆ Consider which emission factor sources and estimation methods are most appropriate for your organisation's data availability and reporting needs

Format

GHG Protocol Corporate Standard Masterclass 2: Operational Boundaries and Emission Factors is a single recorded session, approximately 1 hour in duration, and can be completed at your own pace. It is the second session in the GHG Protocol Corporate Standard Masterclass Series.

Topics covered include:

Defining operational boundaries and classifying emissions into Scopes 1, 2 and 3
Scope 3 value chain emission categories, upstream and downstream
Accounting for leased assets
Sourcing and applying emission factors
Calculating emissions using activity data
Using proxies and estimation methods, and their limitations

Who This Is For

GHG Protocol Corporate Standard Masterclass 2: Operational Boundaries and Emission Factors is designed for professionals involved in emissions accounting, sustainability reporting, and corporate decision-making, including those in leadership and management roles:
◆ Sustainability and ESG professionals
◆ Sustainability consultants and advisors
◆ Finance and accounting professionals
◆ Risk and compliance professionals
◆ Corporate strategy and governance professionals
◆ Internal and external auditors