Calculating GHG Emissions for Small Businesses

Sixty corporations begin measuring the greenhouse gas emissions from their products and supply chain. For big corporations, it’s part of “their” risk management of measuring energy usage within their supply chain. For example, Walmart is using Sustainability Assessment, so their suppliers can measure their energy use and greenhouse gas emissions. What’s gets measured, then gets managed, and have the opportunities to innovate – in the process. 

The business value of measuring energy and GHG is this: if your business reduce the energy use, you not only cut energy costs, but also reduces the greenhouse gas emissions. Moving forward, as more companies put in place all kinds of environmental reporting/ scorecard, by measuring the energy use and reduce GGH – you are essentially ahead of the game.


In the U.S., it is from mom-and-pop store owners all the way to companies with 1,500 employees. It’s by definition. Via EPA.

The SBA defines small business by category of business using North American Industrial Classification System (NAICS).1 For example, in the case of manufacturing, generally defines small business as a business having 500 employees or fewer. For many types of manufacturing, however, the SBA’s size standards define small business as a business having up to 750, 1000 or 1500 employees, depending on the particular type of business. In the case of agriculture; mining; and gas and sanitary services, the SBA size standards generally define small business with respect to annual receipts(from $0.5 million for crops to $25 million for certain types of pipelines). The SBA definition of a small business applies to a firm’s parent company and all affiliates as a single entity.

-emphasis added

Surprised? I was.

The European Union have a simple checklist of 4 indicators to determine whether or not you are a small or medium sized businesses (or SMEs):

  1. Is the organization engage in economic activity? Y/N
  2. Does it have fewer than 250 employees? Y/N
  3. Does it have annual turnover not exceeding 50M Euros or balance sheet total not exceeding 43M Euros? Y/N
  4. Is it autonomous? Y/N

If you check yes, then you are. On question number 4, even if it’s no, may ‘still’ qualify as SME.

For most small businesses, the majority of GHG emissions will come from their source of energy (electricity) and vehicles. For manufacturers, additional emissions it will come from use of refrigerants, waste gases, on onsite combustion. 


Climate Leaders – a US government funded private-government partnership, via EPA – suggested the four steps for calculating and managing your GHG emissions.

Step 1 – Get Started

  • Defined GHG
  • Understand the principles of GHG accounting
  • Choosing a base year against the future emissions you want to track. 
  • Identifying the facilities you want to include within your organization boundaries

Step 2 – Calculate GHG Emissions

  • Identifying emission source types and quantifying emissions

Step 3 – Create an Inventory Management Plan

  • Documenting inventory procedures
  • Inventory management for low-emitters

Step 4 – Set a Reduction Goal and Track Progress

  • Annual GHG summary and goal tracking form
  • Setting a GHG reduction goal
  • Resources for reducing GHG emissions
  • Going carbon neutral

From steps to scope. How wide of emissions you want to track? There are three scopes (sources) of the greenhouse gas emissions that you need to know. 

>> Scope 1: direct emissions are emissions from sources that the company controls. For example, natural gas-fired boilers or vehicles fleet. 

>> Scope 2indirect emissions as a consequences of the operations of the company, but occur at sources owned by the company or controlled by another company, i.e. from electricity, heat and steam. 

>> Scope 3optional, emissions from international operations, offset projects, employee travel, business transport, etc.

Walmart is reporting on scope 1 and scope 2.


image: EPA


You see from the image above. And they are: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydroflurocarbons (HFC), perflurocarbons (PFC), and sulfurhexafluoride (SF6). 


There are standardized calculators or sometime also refers as frameworks out there that you can use.


Climate Leaders have three tools (read: calculators): inventory calculator for low-emitters (cos. that emit less than 10k tons), inventory management and goal proposal template that you can download from their website.


GRI or Global Reporting Initiative offers a comprehensive frameworks for sustainability (read: corporate social responsibility or CSR) reporting. For the small businesses, GRI offers what they called “Let’s report template,” which is a basic reporting that contains 16 pages that can be downloaded, completed, published and sent back to GRI for their databank (link).


If you are a supplier to Walmart, this is the place where you will report carbon emissions and energy usage for your business. However, you’d probably end up using GHG Protocol for your carbon accounting.


GHG Protocol, is the global standard for calculating emissions. It’s the work of World Business Council for Sustainable Development (WBCSD), World Resources Institute (WRI). Tools that are available for across sectors, office-based or service sectors to customized calculation tools. For small business not part of supply chain but office-based service business 9 to 5 kind of a business, there’s a tool for that. It’s called ‘working 9 to 5 on climate change.’ I would say this probably apply to real estate companies, law firms, etc. (link).


If you want to stay sustainable – hm, more likely that you want to be in business for a long long time – this is where you start. Follow the trend and take action. That is, start calculating your greenhouse gas emissions and energy use asap. As simple as that. Sooner or later, suppliers will be decided on the basis of GHG compliance and/or sustainability scorecard.

Two of the large companies asking their suppliers to disclose environmental data. 


These are the 4 tough questions you have to answer in your sustainability assessment. It’s a yea or nea type (Y/N) and some numbers. Via Walmart.

  1. Have you measured your corporate greenhouse gas emissions?
  2. Have you opted your to report your greenhouse gas emissions and climate energy to the Carbon Disclosure Project?
  3. What are your total greenhouse gas emissions reported in your most recently completed report? (Enter total metric tons CO2e, e.g. CDP 2009 questionaire.. )
  4. Have you set some publicly available greenhouse gas reduction targets? If yes, what are those targets? (Enter total metric tons and target date)

Timeline: 24 months.

So you still have relatively longer time to learn, collect and put together a plan.

P&G (Procter and Gamble) SUPPLIERS..

You got challenges ahead. It’s more like you got to do it – like NOW. And you really have to go deep into counting carbon emissions than Walmart suppliers. On fuel and electric usage, they asking suppliers to quantify the use using GHG Protocol by Giga-Joules or GJ or GJ/ Unit of output.

This is just the beginning, folks. There’s more ahead. Be prepared…


Author: Dewita

Co-founder Ecotwist Labs.

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