GHG emissions

GHG emissions refer to the release of greenhouse gases from human activities, which trap heat in the atmosphere. The most widely adopted international standards for their quantification are the GHG Protocol Corporate Standard and ISO 14064-1. These frameworks categorize emissions into three scopes: Scope 1 for direct emissions from owned or controlled sources (e.g., fuel combustion); Scope 2 for indirect emissions from purchased energy (e.g., electricity); and Scope 3 for all other indirect emissions in the value chain (e.g., supply chain logistics, business travel). In enterprise risk management (ERM), GHG emissions data is the foundation for identifying and managing transition risks (e.g., carbon taxes) and physical risks (e.g., extreme weather events), and it is a core requirement for disclosures under standards like IFRS S2.

Application in ERM involves three key steps. First, an enterprise establishes an inventory and baseline by systematically identifying and quantifying Scope 1, 2, and 3 emissions according to ISO 14064-1 or the GHG Protocol. Second, this inventory is used for risk and opportunity assessment, linking emission hotspots to potential transition risks (e.g., carbon pricing) and physical risks (e.g., supply chain disruption). Third, the company sets reduction targets, often aligned with the Science Based Targets initiative (SBTi), and integrates performance tracking into its ERM dashboard. For example, a Taiwanese electronics manufacturer used its GHG inventory to justify a $2 million investment in energy-efficient equipment, reducing Scope 2 emissions by 20% and achieving annual cost savings of $400,000, thereby mitigating energy price risks and meeting customer demands.

Taiwanese enterprises face three primary challenges. First is Scope 3 data collection, as obtaining accurate data from diverse SME suppliers is difficult. The solution is a hybrid approach, using industry-average data initially while launching a supplier engagement program to gradually collect primary data. Second is the lack of integrated systems, with GHG data often siloed in EHS departments. This can be overcome by establishing a cross-functional sustainability committee and deploying a digital platform to integrate GHG data with ERP and financial systems. Third is the talent gap and regulatory uncertainty, with fast-evolving rules like the EU's CBAM. Enterprises should partner with external experts for initial setup and training while investing in upskilling internal teams with certifications like ISO 14064-1 Lead Auditor to build long-term capacity.

Winners Consulting specializes in GHG emissions for Taiwan enterprises, delivering compliant management systems within 90 days. Free consultation: https://winners.com.tw/contact