The Greenhouse Gas (GHG) Protocol is the gold carbon accounting standard. It provides a detailed framework for corporations to measure and report their carbon footprint (including that from their indirect impact). Then, they can set targets and embrace practices, like the circular economy, to reduce emissions.
We’ve discussed the GHG Protocol and circular economy in tech at length. This article talks about the GHG Protocol in light of circular economy, educating on where and how circular practices can be measured and reported.
In tech, carbon emissions are primarily associated with equipment manufacturing, consumption, and disposal. From enterprise hardware like servers to consumer electronics like laptops, all equipment has its share of GHG emissions.
Traditionally, the lifecycle of these products is linear. However, in a circular economy, the lifecycle of a device becomes cyclical. Instead of reaching the end of service, the equipment can be used longer, repurposed, or recycled.
Even when a device is no longer usable, recycling the materials that make up its parts can help bring down emissions. For instance, when recycled for materials, a million cell phones can produce 35,000 pounds of copper, 33 pounds of palladium, 772 pounds of silver, and 75 pounds of gold. That reduces the need to mine these metals.
The goal of a circular economy in the context of technology is to keep equipment in use for as long as possible, recycle parts and materials once the use is over, and safely dispose of any leftover waste. This whole lifecycle has the potential to reduce a company’s emissions across multiple categories (direct and indirect, as per the GHG Protocol).
Sadly, much tech equipment isn’t recycled properly. Of the eye-watering 62 billion kilograms of e-waste generated in 2022, only 22.3% was recycled properly. Electric waste is a big polluter. Circular economy tackles this issue head-on, which is why it should be a big priority for stakeholders in the tech industry.
If your business is practicing a circular economy to some extent, you owe it to yourself to calculate and report its impact on your carbon baseline. Not only will that help you understand your efforts and track your targets, but it will also inspire others to follow in your footsteps.
While the GHG Protocol is primarily designed for linear economy models, it can be adapted to account for circular economy practices. Here's a breakdown of how circular economy principles can be integrated into Scope 1, 2, and 3 emissions:
Circular economy practices may not significantly impact Scope 1 emissions, as those are primarily caused by assets owned and controlled by the organization, such as fuel consumption or process emissions (such as manufacturing).
However, some circular practices may indirectly help bring down Scope 1 emissions. For example, continuous use of the same equipment may eliminate the need to buy and transport new equipment, saving emissions associated with logistics. Such reductions may not be significant, but they are something to consider when quantifying direct emissions.
Circular economy principles can influence Scope 2 emissions by promoting energy efficiency, using renewable energy sources, and optimizing energy consumption in buildings and operations.
Calculate Scope 2 emissions using established methodologies, such as location—or market-based approaches. Consider the impact of energy efficiency improvements and renewable energy procurement on these emissions.
Circular economy practices can significantly impact Scope 3 emissions, which are indirect emissions from activities outside the organization's direct control. Circular economy practices are relevant to several of the 15 designated categories under the GHG Protocol Scope 3 emissions guidelines.
Here are some key categories to focus on for measuring and reporting circular initiatives:
Circular initiatives are great, but assessing their impact can be challenging. Because circular economy practices mainly help reduce indirect emissions, they’re not straightforward to calculate and report. And that’s essentially the theme across all Scope 3 emissions.
For instance, if you want to measure the emissions you’re avoiding by buying used servers, you’d have to check with the vendor to see how much emissions are associated with their production of new servers. That can be difficult to ascertain, as manufacturers report emissions release data for overall operations, not a specific process or device.
That said, it’s not impossible. You need more accountability across the value chain and some engagement from upstream and downstream stakeholders. The former would be your suppliers, and the latter would be your distributors and customers.
So, how do you measure and report the impact of circular economy practices in light of the GHG Protocol? Here are some steps:
While the GHG Protocol Corporate Standard is the most popular emissions reporting framework, it’s not the only one out there. Here are two more frameworks you could consider when measuring and reporting emissions, especially to account for circular practices:
ISO 14064 is an internationally recognized standard for measuring and reporting GHG emissions. It provides a comprehensive framework for organizations to quantify their carbon footprint, set reduction targets, and track progress towards sustainability goals. It’s actually based on the GHG Protocol and consists of three parts:
The Global Reporting Initiative (GRI) is another globally recognized framework for sustainability reporting. It provides a common language and standardized metrics for organizations to disclose their environmental, social, and governance (ESG) performance. Unlike the GHG Protocol and ISO 14064, it doesn’t just focus on emissions but also on social and governance issues.
GRI standards enable transparent and comparable reporting. They allow stakeholders to assess an organization's impact on various sustainability issues. Organizations can build trust with investors, customers, and other stakeholders by adopting GRI. It also helps identify opportunities for improvement and innovation.
At PivIT, the circular economy represents the very ethos of our business model. Through our products, we enable businesses to embrace the principles of a circular economy and reduce their carbon footprint (while saving money).
Learn more about PivIT’s focus on sustainability!
IT companies can adopt various circular economy practices, such as:
The GHG Protocol is a standard for measuring and reporting a company's GHG emissions. It is not a governmental regulation, but can be used for mandatory or voluntary ESG reporting.
Most regulations for ESG reporting worldwide don’t mandate value chain emissions reporting, aka Scope 3 emissions. However, that’s gradually changing, with authorities also encouraging and, in some cases, requiring companies to report indirect emissions.