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As a SME, you probably have limited time, resources or expertise when it comes to disclosing climate-related data. Yet, there are still many reasons / benefits in reporting your company’s sustainability (see Why Should I Make Climate-Related Disclosure as a SME? And What Standards Should I Align to?).

Here, we provide a step-by-step guide for SMEs as a *starting point* to reporting the world’s most widely used greenhouse gas accounting standards: GHG Protocol, specifically, Scope 1 & Scope 2.

Step 1: Collect Data

First, identify all the greenhouse gas emission sources owned or controlled by your company. These emissions result from activities within the organization’s boundaries.

GHG Scope 1

List all sources of direct emissions within your operational boundaries, in other words, “what you burn”:

All sources of fuel combustion, e.g., company vehicles, boilers, generators, furnaces. Sources: bills or meter reading.
Any refrigerant losses from HVAC systems. Source: maintenance record.
Any chemical production processes emitting GHGs.
Units: liters of diesel, cubic meters of natural gas, etc.

GHG Scope 2

Identify all indirect greenhouse gas emissions associated with purchased emissions sources, in other words, “what you buy”:

All purchased electricity, steam, heating, and cooling used in your company’s buildings, facilities, and operations.
Sources: utility bills or invoices from energy suppliers.
Unit: kilowatt-hours (KwH).

Step 2: Calculate Scope 1 & Scope 2 Emissions

Collecting greenhouse emissions data might be tedious, but it is relatively less difficult. What is often hard for SMEs to do is to use appropriate emission factors to convert activity data into CO2 equivalents:

For Scope 1 emissions, use emission factors for fuel types (e.g., diesel, natural gas).
For Scope 2 emissions, use grid electricity emission factors.

And then, multiply the activity data by the corresponding emission factors:

Example for Scope 1: Diesel usage(liters)×Emission factor(kgCO2e/liter).
Example for Scope 2: Electricity usage(kWh)×Emission factor(kgCO2e/kWh).

Step 3: Compile & Verify Data

After collecting and calculating your greenhouse gas emissions:

Compile the calculated emissions data into a clear, organized format. This may be a spreadsheet or a dedicated sustainability reporting tool.
Provide context and explanations for your data, including the methodologies used, emission factors applied, and any assumptions made.
Consider having your emissions data verified by an external auditor to enhance credibility and accuracy.

Step 4: Disclose Emission

Publish your GHG emissions in your annual sustainability report, corporate social responsibility (CSR) report, or as part of your financial disclosures.
Clearly distinguish between Scope 1 and Scope 2 emissions and provide total emissions for each category.
Define which facilities and activities are included in your report (optional).

Example of GHG Scope 1 & Scope 2 Reporting Format

There you have it! 4 steps to disclose GHG Scope 1 & Scope 2 emissions. Note that what’s not discussed here is GHG Scope 3 emission disclosure, which includes all indirect emissions associated with your company’s value chain. Since this involves measuring emissions from your suppliers, customers, employees, etc., it is much more complicated to calculate. For this reason, most jurisdictions allow companies more time to phase in GHG Scope 3 disclosure.

If your SME does not want to use internal resources to report GHG Scope 1 & Scope 2 emissions, consider using a service such as Cheeri to automate this process.

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