What is GHG and ESG? How to decide which report to implement?

Before we understand which report to implement through SAP Sustainability Solutioning, let's try to understand the basics of GHG and ESG reports. And how to decide which report or both reports to implement for an organization.

Greenhouse Gas (GHG) Report:

Range of emissions:

Direct emissions (Scope 1): Includes emissions from sources owned or controlled by the reporting unit, such as on-site combustion of fossil fuels.

Indirect emissions (Scope 2): Includes emissions associated with the production of purchased energy such as electricity.

Other indirect emissions (scope 3): These arise from activities or assets that are not directly owned by the reporting entity, but affect day-to-day operations.

Types of greenhouse gases:

Greenhouse gases (GHGs) trap heat in the Earth's atmosphere and contribute to the greenhouse effect that leads to global warming. Major greenhouse gases are those that contribute significantly to this effect, while minor greenhouse gases have a smaller impact. The main greenhouse gases include:

Main greenhouse gases:

1. Carbon dioxide (CO2): The most widespread greenhouse gas, which is produced primarily by the burning of fossil fuels (coal, oil and natural gas) and deforestation.
2. Methane (CH4): A powerful greenhouse gas is released during the production and transportation of coal, oil, and natural gas. Agricultural practices, livestock digestion and decomposition of organic waste also contribute to methane emissions.
3. Nitrous oxide (N2O): Emitted from agricultural and industrial activities, as well as from the burning of fossil fuels and biomass.
4. Water vapor (H2O): Although water vapor is a natural part of the atmosphere, it contributes to the greenhouse effect. However, human activities have a limited direct impact on water vapor levels.
5. Ozone (O3): While ground-level ozone is considered an air pollutant, stratospheric ozone plays a key role in absorbing ultraviolet (UV) radiation. The presence of ozone in the lower atmosphere contributes to the greenhouse effect.
6.  Chlorofluorocarbons (CFCs): Synthetic compounds once commonly used in refrigerators, air conditioners, and aerosol propellants. They have a high global warming potential (GWP) and are controlled by international agreements such as the Montreal Protocol because of their role in ozone depletion.
7. Hydrofluorocarbons (HFCs): HFCs are used as a replacement for CFCs in many applications and have a high GWP. They are commonly found in refrigeration, air conditioning and foam blowing processes.

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