Reporting carbon emissions
What are Scope 1, 2 and 3 emissions?
Carbon emissions are generally reported as Scope 1, 2 or 3, depending on the level of control a company has over a particular emission source. Different emission sources have different global warming potential. The unit used for emissions reporting is ‘tonnes CO2e’, which means emissions with the global warming potential equivalent to one tonne of carbon dioxide.
Scope 1 emissions are direct emissions from our operations. The main sources of Scope 1 emissions for Wesfarmers are natural gas, ammonia, refrigerants, diesel and fugitive emissions from coal mined.
Scope 2 emissions are indirect emissions from the electricity used by our operations. For Wesfarmers, most of these emissions come from electricity used by Coles, Bunnings and Kmart.
Scope 3 emissions are other indirect emissions that occur as a result of our operations. The reporting of these emissions is less clearly defined as the boundaries are determined by the entity disclosing the emissions, and by what is practical and useful. For example, we report the emissions for waste which is collected by waste disposal contractors and disposed to landfill.
Wesfarmers reports Scope 3 emissions over which it has some influence and for which it can provide reasonably accurate estimates. Our Scope 3 emissions are calculated by applying National Greenhouse Accounts factors.The Scope 3 emissions that Wesfarmers reports include:
- emissions from air travel by Wesfarmers Group employees;
- emissions from the transmission and distribution of the electricity, natural gas and fuel we use (or the emissions that occur as a result of transferring the electricity and natural gas from its source to our operations); and
- emissions that escape from waste that is disposed to landfill.
What is NGER Act Reporting?
Under the National Greenhouse and Energy Reporting Act 2007 (NGER Act), companies that exceed a threshold are required to report particular Scope 1 and 2 emissions that are emitted by entities under their operational control. It makes more sense to compare these between companies because the types of emissions that must be reported are consistent. The NGER Act requires companies to use standard global warming potential (GWP) rates.
In this report, Wesfarmers chooses to report some additional Scope 1 and 2 emissions that are not required to be reported under the NGER Act, to give a more complete picture of our emissions profile. These include certain refrigerant gases, emissions from businesses that are owned but not controlled by Wesfarmers (such as our Port Kembla air separation unit) and international facilities. All relevant gases for our operations are used in the calculation of Scope 1 greenhouse gas emissions.
Why does Wesfarmers report emissions and energy intensity?
Where the operations of an entity are getting bigger or smaller, the absolute change in the emissions may be less relevant than the emissions intensity, or in other words, how much carbon is emitted per unit of production. Given the diversity of our businesses, we use emissions per dollar revenue as our common emissions intensity metric across the Group.
This year, our emissions intensity decreased.Our total energy use increased by 6.4 per cent compared to last year with an energy intensity for all energy consumed inside the organisation of 469 gigajoules per million dollars of revenue.
GRI 305-1, GRI 305-2, GRI 305-3, GRI 305-5