2.7 How to report GHG emissions from carbon neutral services within a corporate GHG inventory

Organizations are increasingly considering the environmental performance of suppliers as part of their procurement process. If a business has selected a supplier because they provide a carbon neutral service, this guidance sets out best practice with regards to reporting the GHG emissions from the service within the business’ annual GHG inventory. Services that are frequently supplied as carbon neutral services include flights and logistics services. This approach would apply equally to the GHG inventory of a product where components of the product are sourced as carbon neutral products. Given carbon neutral services are more widely available in the market, this guidance focuses on services in the context of an annual corporate GHG inventory.

This guidance aligns with the GHG Protocol’s Scope 3 Standard¹ and UK DEFRA’s Environmental Reporting Guidelines.²

This guidance recommends the following steps:

1. Request suppliers provide a breakdown of the GHG emissions associated with the services consumed. The total gross carbon footprint for a specific time period (e.g. financial year) plus an intensity measure relevant to how the service is consumed. For example, if document storage is outsourced to a cloud-based service, request the figure for CO₂e emitted per gigabyte per year. The carbon intensity metric is useful for forecasting how GHG emissions will vary based on the level of consumption
2. Confirm if the service purchased is carbon neutral. To deliver a carbon neutral service the provider will need to offset (retire) a volume of carbon credits equivalent to the emissions created by the provision of the service. For example, if the gross footprint of the service equals 10 tCO₂e, then 10 tCO₂e of carbon credits need to be purchased and retired, and once retired the net footprint equals 0 tCO₂e, i.e. the service is carbon neutral. To ensure the service provider is using high quality carbon credits which guarantee emissions reductions from credible project types, you should request that they work with a carbon credit supplier that complies with the requirements set out in Technical Specification 4.2.1.1. If a supplier is not using credits in compliance with the ICROA Code, then those credits cannot be included in support of a CarbonNeutral® certification
3. When preparing a corporate GHG inventory, categorize the carbon neutral service according to requirements of the GHG Protocol standards. To maintain the integrity of the GHG inventory, total GHG emissions should be reported, before reporting a lower figure for net emissions that has been reduced by the retirement of carbon credits by the product or service provider

¹ Greenhouse Gas Protocol, 2011, Corporate Value Chain (Scope 3) Standard, https://ghgprotocol.org/standards/scope-3-standard.

² Environmental Reporting Guidelines: including mandatory greenhouse gas emissions reporting guidance, https://www.gov.uk/government/publications/ environmental-reporting-guidelines-including-mandatory-greenhouse-gas-emissions-reporting-guidance.