ICT Sustainability

National Carbon Offset Standard

This is an extract from the Australian Department of the Environment and Energy, National Carbon Offset Standard for Organisations (2017). There are also standards for Products & Services (2017b), Events (2017c), Precincts (2017d) and Buildings (2017e), which take a simialr approach. The standard details steps to: measure, reduce, offset and report emissions. Use of the standard is voluntary, however those making claims against the standard are required to be independently audited:

2.3 MEASURE: Prepare carbon account

Preparing a carbon account involves the following steps:

Step 1: Establish the emissions boundary. Step 2: Catalogue emissions sources within the boundary. Step 3: Set a base year. Step 4: Collect data on identified emissions sources. Step 5: Calculate the total carbon account attributable to the organisation.

The responsible entity may choose to prepare its own carbon account, or may engage a consultant to prepare the carbon account or to provide technical advice.

2.3.1 Step 1: Establish the emissions boundary

Defining the emissions boundary is the first step in the carbon accounting process. The emissions boundary refers to the coverage and extent of the carbon account. The boundary is established using a set of criteria to identify emissions sources and decide which of the identified sources are to be included or excluded. Refer to Figure 3 for examples of typical inclusions in an emission boundary.

For an organisation, the emissions boundary includes emissions sources that are part of the organisation boundary as well as emissions sources outside the organisation boundary (scope 3) that are considered relevant. The criteria of materiality can be applied to exclude emissions sources that would not be cost effective to measure relative to their significance to the carbon account.

The organisation’s emissions boundary must be transparently documented and disclosed, along with the reasoning for choosing the boundary. Where significant exclusions are made, they must be clearly stated, and the reasons for and implications of the exclusions must be justified. A disclosure statement, including reason and justification for any exclusions, must be published as part of the public report (Section 2.6).

Organisation boundary

The organisation boundary can be established using either a control or equity share approach: 1. The control approach requires an organisation to account for the greenhouse gas emissions from operations over which it has control. This can be based on either:

• financial control, whereby the organisation reports 100 per cent of operations over which it has ‘the ability to direct the financial and operating policies of the latter with a view to gaining economic benefits from its activities’ (GHG Protocol – Corporate Standard (WBCSD and WRI, 2004)); or
• operational control, whereby the organisation reports 100 per cent of the operations over which it has ‘the full authority to introduce and implement its operating policies’ (GHG Protocol - Corporate Standard (WBCSD and WRI, 2004)).

2. The equity share approach, which requires an organisation to account for greenhouse gas emissions according to its share of equity in the operations.

Once an approach is chosen, it must be applied fully and consistently to determine the organisation boundary of the carbon account. The most common approach for organisations seeking certification through the Australian Government is the operational control approach. The organisation boundary sets the basis for determining what are considered direct emissions and indirect emissions. See Section 2.3.2 for more information on scopes of emissions.

For further details and case studies on the application of these three approaches, refer to the GHG Protocol – Corporate Standard (WBCSD and WRI, 2004).

Relevance

The criterion of relevance, as adapted from the GHG Protocol – Corporate Standard (WBCSD and WRI, 2004), is about ensuring the carbon account appropriately reflects the emissions of the organisation and meets the expectations of consumers and stakeholders – both internal and external to the organisation.

Emissions sources considered to be relevant, whether or not they fall within the organisation boundary, must be included in the emissions boundary (subject to materiality).

The Organisation Standard deems certain emissions sources to be relevant.

Emissions deemed to be relevant

The following emissions sources are deemed to be relevant to all organisations:

• All scope 1 emissions (direct emissions).
• All scope 2 emissions (emissions from the generation of electricity, heat, cooling and steam purchased by the organisation).
• Scope 3 emissions from electricity consumption and fuel use (indirect emissions from the extraction, production and transport of fuel burned at generation, and the indirect emissions attributable to the electricity lost in delivery in the transmission and distribution network).
• Scope 3 emissions from waste, business travel and accommodation, base building services (if applicable), office paper and water use.

All other scope 3 emissions sources must be assessed for relevance in accordance with the relevance test, including:

• Emissions from staff commuting, food and catering, postage and freight, stationery, office printing, cleaning services, IT services (e.g. data centres) and telecommunication services.

Relevance test

Emissions sources are relevant when any two of the following conditions are met (adapted from the GHG Protocol – Corporate Standard (WBCSD and WRI, 2004)):

• the scope 3 emissions from a particular source are likely to be large relative to the organisation’s scope 1 and scope 2 emissions
• the scope 3 emissions from a particular source contribute to the organisation’s greenhouse gas risk exposure
• the scope 3 emissions from a particular source are deemed relevant by key stakeholders the responsible entity has the potential to influence the reduction of scope 3 emissions from a particular source
• the scope 3 emissions are from outsourced activities that were previously undertaken within the organisation’s boundary or from outsourced activities that are typically undertaken within the boundary for comparable organisations.

Materiality

An emissions source that constitutes 1 per cent or more of the total carbon account is considered to be material under the Organisation Standard

If a relevant emissions source is estimated to be material, it must be included within the emissions boundary, unless justification can be provided to demonstrate that such quantification would not be technically feasible, practicable or cost effective relative to its significance.

Emissions sources that are relevant but estimated to constitute less than 1 per cent of the total carbon account can be excluded from the emissions boundary.

In applying the 1 per cent materiality threshold, the total amount of emissions to be excluded must not exceed 5 per cent of the total carbon account.

To estimate materiality of these emissions sources, tools based on input–output analysis can be useful.

Responsible entities are encouraged to include, measure and report as many emissions sources as possible, regardless of an emissions source’s materiality. Data for emissions sources that are deemed as immaterial (contributing less than 1 per cent to the carbon account) may still be included in the carbon account. The following methods can be used if primary data cannot be sourced:

• taking an initial measurement as a basis for projecting emissions for future years of that source; or
• estimating and projecting an emissions source (e.g. using input-output analysis tools or approximation through extrapolation. See Appendix B Section 3.1.3)

Where a relevant emissions source is estimated to be material, but accurate data is not yet available, a data management plan should be developed to outline how more rigorous quantification can be achieved within a reasonable timeframe. This could include setting in place appropriate data collection processes and negotiating with stakeholders who have access to accurate data. ...

From: the Australian Department of the Environment and Energy, National Carbon Offset Standard for Organisations (2017).

Next: Assessment.

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