Climate changes
Did you know that two companies with the same electricity consumption can report vastly different emissions figures? According to the Intergovernmental Panel on Climate Change (IPCC), greenhouse gas calculations heavily depend on the emission factors used to convert activity data into CO2e. This means it is not only the amount of electricity or fuel that matters, but also the emission factor chosen.
This is where credibility is at stake. A small mistake in selecting an emission factor can alter baseline figures, influence decarbonization strategies, and even impact a company’s reputation. So, what are the key aspects you need to understand?
Why can electricity emissions reports differ even when the underlying data is the same? The answer lies in the location based and market based approaches.
The location based method calculates emissions using the average grid emission factor of a specific region. If your business operates in Indonesia, the factor typically refers to national grid data published by government agencies or institutions such as the International Energy Agency (IEA).
On the other hand, the market based method reflects specific electricity purchasing decisions, such as renewable energy sourced through Renewable Energy Certificates or Power Purchase Agreements. Under this approach, emissions can be lower because they reflect claims of cleaner energy usage.
Both methods are recognized in global standards such as the GHG Protocol Scope 2 Guidance. However, if companies are not transparent about which method they use, stakeholders may misinterpret their climate performance. That is why best practice recommends reporting both figures side by side for full transparency.
Can all regional emission factors be used interchangeably? The answer is no.
Each country and even each region has a different energy mix. Electricity emission factors in Indonesia are not the same as those in Singapore or Japan. If a company uses emission factors from another country simply because they are easier to access, the results can become biased.
The risk goes beyond incorrect numbers. In audits or verification processes, using irrelevant emission factors may be considered a methodological inconsistency. This can reduce the credibility of sustainability reports, especially when companies claim net zero targets.
Furthermore, regional inaccuracies can affect internal decision making. Emission reduction strategies may become misaligned because they are based on inaccurate data.
Data shows that electricity emission factors can change every year, following shifts in national energy mixes. When renewable energy increases, emission factors tend to decrease. Conversely, if coal based generation rises, emission factors may increase.
The question is, how does this affect your baseline?
A baseline is the starting point of emissions measurement used to track reduction targets. If emission factors are updated annually without a clear adjustment strategy, emission trends may appear to rise or fall not because of operational changes, but due to changes in emission factors.
To maintain consistency, international standards recommend a transparent approach. Companies can define a base year and clearly document their emission factor update policy in reporting methodologies. This ensures that changes in figures remain traceable and accountable.
Why is harmonization important? Because emissions reporting is not just an internal document, it is a communication tool for investors, regulators, and the public.
The GHG Protocol Standard provides comprehensive guidance on calculating and reporting greenhouse gas emissions, including emission factor selection and documentation. Meanwhile, ISO 14064, developed by the International Organization for Standardization, offers a framework for quantification, reporting, and verification.
Both emphasize transparency in data sources, relevance of emission factors, and consistency in methodologies over time. Without alignment to these standards, emissions reports risk being perceived as less credible by auditors and global stakeholders.
Harmonization also becomes essential for companies operating across multiple countries. Using a consistent framework allows for more objective and comparable performance assessments.
Managing hundreds or even thousands of emission factors is not a simple task. Each sector, from energy and transportation to waste and supply chains, relies on different data references.
CarbonIQ is designed to ensure that every activity data point is converted using relevant, up to date, and well documented emission factors. Its database is curated from credible sources such as IPCC, IEA, DEFRA, EPA, PCAF, national governments, and other internationally recognized references.
In addition, the system records the version and year of each emission factor used. When annual updates occur, these changes can be traced, allowing companies to understand whether emission fluctuations come from operational changes or methodological updates.
This approach helps businesses maintain baseline consistency, simplify audit processes, and strengthen stakeholder trust in their sustainability reporting.
Converting activity data into CO2e may appear simple on the surface. However, behind each number lies methodological decisions that determine whether emissions data can be trusted.
The choice between location based and market based methods, the relevance of regional emission factors, annual updates, and alignment with international standards all form the foundation of credibility.
If your business aims to build a robust and verifiable decarbonization strategy, ensure that every emission factor used is not just a number, but data that can be justified and audited.
It is time to move beyond simply calculating emissions and start managing them strategically and transparently with Jejakin through CarbonIQ.
Jejakin’s green programs combine high-tech monitoring, biodiversity restoration, and community-led initiatives to deliver powerful, sustainable change across ecosystems.
