GHG report: Is it mandatory?

What is the GHG inventory?

The GHG (Greenhouse Gas) inventory is a document that measures an organization’s greenhouse gas emissions. It accounts for both direct and indirect emissions related to its activities, categorized into several scopes: Scope 1 (direct emissions), Scope 2 (emissions related to purchased energy), and Scope 3, which is optional. This tool is essential for evaluating an organization’s carbon footprint and helps implement actions to reduce GHG emissions.

Is the GHG inventory mandatory?

In France, the GHG inventory is made mandatory by Article 75 of Law No. 2010-788 of July 12, 2010, as part of efforts to combat climate change. This obligation applies to private companies with more than 500 employees, local authorities with over 50,000 inhabitants, and public institutions employing more than 250 agents. These entities are required to conduct a GHG inventory to assess their greenhouse gas emissions.

The frequency of this obligation varies depending on the type of organization. Private companies must publish their GHG inventory every 4 years, while local authorities and public institutions must update it every 3 years. This inventory must include direct emissions (Scope 1) and emissions related to purchased energy (Scope 2). Accounting for indirect emissions (Scope 3) is recommended but not mandatory.

What are the penalties for non-compliance?

In the event of non-compliance with the obligation to carry out and publish a GHG inventory, sanctions may be imposed on the organizations concerned. Under current regulations, failure to comply with this requirement can result in administrative fines. In addition to financial penalties, companies and local authorities may also face damage to their reputation, particularly regarding environmental responsibility.

Non-compliance with the GHG inventory can also affect an organization’s regulatory compliance, which may hinder access to certain public aid or participation in public tenders. It is therefore essential for the entities concerned to adhere to these legal obligations.

GHG inventory: mandatory or voluntary?

The regulatory GHG inventory is required by law for certain companies and organizations, while a voluntary carbon footprint assessment is a non-mandatory but strategic initiative for others. The regulatory GHG inventory is often limited to direct emissions (Scope 1) and those related to purchased energy (Scope 2). In contrast, a voluntary carbon footprint assessment can include indirect emissions (Scope 3), providing a more comprehensive view of the carbon footprint.

Some companies choose to carry out a voluntary GHG inventory even without being required to, for various reasons. It helps them better understand and manage their overall environmental impact by identifying all emission sources. This proactive approach not only improves brand image by demonstrating a commitment to climate action but also helps reduce energy costs through better resource management.

Moreover, by anticipating future environmental regulations, voluntary companies are better prepared to adapt to new standards. This strengthens their position in a market increasingly focused on environmental issues, while enhancing their competitiveness and meeting the growing expectations of customers and investors.

How to conduct a GHG inventory in compliance with legal requirements?

To conduct a GHG inventory in compliance with legal requirements, several steps must be followed. The first step is to define the scope of the inventory, identifying the sites, activities, and emission sources to be included. Next, it is necessary to collect data on energy consumption, travel, and other activities that generate greenhouse gas emissions. This data will be used to calculate emissions using recognized emission factors.

The use of standardized methodologies, such as the GHG Protocol or ISO 14064 standard, is essential to ensure compliance and reliability of the results. These frameworks allow emissions to be categorized into Scopes 1 (direct emissions), 2 (related to purchased energy), and 3 (other indirect emissions, optional under the regulatory framework).

To facilitate the completion of the GHG inventory, specialized tools like D-Carbonize can be used. These software programs automate data collection, emission calculation, and report generation in compliance with standards. They also allow for tracking emissions over time while identifying opportunities for emission reductions.