An emissions boundary defines the scope and limits of a company’s greenhouse gas (GHG) emissions inventory. It determines which activities, sources, and operations are included in the measurement of emissions and helps ensure consistency, transparency, and comparability in reporting.
Trace provides a Free Boundary Setting Tool to help you determine which emissions sources you'll be covering (click the link to download).
When setting an emissions boundary, two key dimensions are considered:
Step 1: Setting the Organisational Boundary
The Organisational Boundary determines which entities (e.g., subsidiaries, joint ventures, partnerships) and assets (e.g., facilities, vehicles) will be included in the GHG emissions inventory. The GHG Protocol offers 3 approaches to Organisational Boundary setting.
Trace typically applies the Operational Control approach, which is most common.
- Operational Control: which emission sources are under your organisation’s operational control? These should be included in your emissions boundary. This is the most common method of determining an emissions boundary, and is the method that Trace uses by default.
- Operational Control is defined as having the ultimate authority to design and implement operating, health & safety or environmental policy over a given activity.
You could also define your organisational boundary based on:
- Financial Control: a consolidation approach whereby a company accounts for 100 percent of the GHG emissions over which it has financial control. It does not account for GHG emissions from operations in which it owns an interest but does not have Financial Control.
- Equity Approach: where an organisation accounts for GHG emissions from operations and assets according to its share of equity in the operation
Step 2: Setting the Operational Boundary
The Operational Boundary defines the specific activities, operations, or emissions sources which your organisation should include in the emissions inventory.
Following the GHG Protocol, all Scope 1 (direct) and 2 (electricity) emissions and relevant Scope 3 emissions must be included in the inventory.
Relevance Test (Scope 3)
Scope 3 emission sources are deemed relevant if at least two of the following criteria are met:
- the emissions from the source are likely to be large relative to the organisation’s electricity, stationary energy and fuel emissions
- the emissions from the source contribute to the organisation’s greenhouse gas risk exposure
- the emissions from the source are deemed relevant by key Company stakeholders
- the responsible organisation could influence emissions reduction from the source
- the emissions are from outsourced activities previously undertaken within the organisation’s boundary, or from outsourced activities typically undertaken in-house by comparable Companies