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Importance of GHG Management and Reporting System for Companies

Thermal power plant Managing carbon emissions and protecting a business from potential impacts of climate change is fundamental to achieving a sustainable growth and ensuring stable shareholder returns. Most of the companies manage and report their GHG (green house gas) emissions in the form of GHG reports or Sustainability reports. These companies understand the importance of measurement, management and disclosure of greenhouse gas emissions in standard business practice.

There are multiple benefits of GHG management for companies. Following points elaborates major benefits of GHG management and reporting;

Cost Savings

Managing GHG emissions allows an organization to monitor the energy usage at particular sources. Larger GHG emission sources are also the most energy intensive. GHG emission accounting, management and reporting system as a management system lets us monitor the energy source and identify GHG emission reduction projects internally which can lead to cost saving for the organization. Example of such projects are – use of alternative fuel such as CNG or LPG that replaces petrol in company owned vehicle fleet, use of renewable energy such as wind, renewable biomass, solar energy etc instead of conventional coal/fossil fuel based energy.

Risk and opportunity management

Increasing GHG emission has created various risks and opportunities to businesses which can in turn affect revenue, cost or the reputation of a company. Managing GHG emissions helps an organization manage the various risks and reap benefits from opportunities. Due to increasing concern towards climate change, governments across the world are creating regulations to restrict the emissions. Most affected sectors are energy, transportation and heavy manufacturing. Already established GHG emission accounting, management and reporting system in company can create suitable environment to be ready for such regulations.

GHG management can also create an opportunity for the company through cost savings achieved by optimization of energy profile and then careful selection of best energy efficiency measures and sourcing of renewable energy technologies. (Read more on Climate Change related risks and opportunities here)

Stakeholders Requirements

Investors are now seeking information on organizations’ efforts towards carbon emission accounting, reduction and reporting through Carbon Disclosure Project (CDP) reporting. Therefore, quantification of GHG inventory according to ISO 14064-I will help a company to meet current and future regulatory requirements and stakeholder’s expectations. Companies like ITC, Wipro and many others have successfully engaged stakeholder on carbon management and have enhanced their brand image and reputation.

Communication and branding

Status reports on carbon emissions when published along with the annual reports make a strong statement to stakeholders that the company manages its businesses responsibly. These reports can be presented at various forums depending on companies’ target stakeholders e.g. investors, lenders, and governments. It also helps in enhancing brand image of company.

These are some benefits of GHG accounting, management and reporting system.

When are you implementing GHG accounting, management and reporting system in your organization?

Read more on Performance of Airports in reducing their Carbon Footprint

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