Navigating the complexities of carbon accounting can determine the success or failure of greenhouse gas (GHG) inventories. Position Green, an ESG management platform, aims to help and has offered an overview of primary and secondary data for carbon accounting.
For businesses striving to refine their sustainability reporting, balancing the use of primary and secondary data is crucial to ensure credibility without overextending time and resources, it said.
Primary data originates directly from a company’s operations or supply chain. It is typically the most precise, offering transparency and enabling businesses to benchmark operational changes effectively. Examples include on-site fuel use and supplier-specific emissions data. However, primary data is resource-intensive, often requiring rigorous verification to maintain quality.
On the other hand, secondary data leverages industry averages, estimates, and publicly available sources. It is cost-effective and accessible but lacks the granularity of primary data, potentially diminishing the specificity of a business’s carbon reduction strategies.
For instance, an industrial company sourcing steel from two suppliers might find significant discrepancies in emissions. While secondary data could provide a general emissions factor, the variations in supplier practices highlight the importance of supplementing secondary data with primary insights.
The choice between primary and secondary data depends on the scope of emissions being measured.
- Scope 1: Direct emissions require primary data for activities such as fuel consumption and heating. Secondary data may only fill gaps where direct measurement is impractical.
- Scope 2: Indirect emissions from purchased energy involve a mix of primary data, such as energy invoices, and secondary data to account for residual emissions.
- Scope 3: Value chain emissions often rely on secondary data due to their complexity, though supplier-specific primary data can significantly improve accuracy in areas like transportation and purchased goods.
Finding the right balance between precision and feasibility is essential, Position Green noted. Businesses should focus on collecting primary data for significant emissions hotspots while using secondary data to provide broader coverage. For example, primary data is critical for high-impact suppliers or direct operational emissions, while secondary data may suffice for downstream activities such as consumer use of sold products.
Common pitfalls in carbon accounting include overestimating the precision of secondary data and failing to engage suppliers for meaningful primary data. Transparency about data sources, particularly for Scope 3 emissions, is vital to maintaining stakeholder trust.
Practical strategies to enhance carbon accounting include prioritising primary data collection for high-impact areas, standardising data quality checks, and leveraging automation tools like Position Green’s carbon accounting software to streamline processes and improve audit readiness.
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