The Simplified Climate Report demystified: Focus on Scope 1 and the responsibilities of organizations

The Bilan Climat Simplifié, introduced by Decree no. 2021-1784 of December 24, 2021, is a tool for legal entities under private law, including companies and associations, that have benefited from the advantages of the 2020-2022 Stimulus Plan.

🎯 O bjective of the Simplified Climate Report

The purpose of the Bilan Climat Simplifié is to assess the direct greenhouse gas emissions generated by the fixed and mobile energy sources required for a company's activities. The Bilan Climat Simplifié is part of an approach to transparency and environmental responsibility, aimed at quantifying the climatic impact of organizations.

📏 Scope of application: reporting direct emissions

The Simplified Climate Balance concerns two categories of energy sources controlled by the company, as defined in Article 244 of Law no. 2020-1721:

• Item 1: Stationary sources: Includes direct GHG emissions from stationary sources under the company's control, such as plant and equipment.
• Item 2: Mobile sources: Quantifies direct GHG emissions from mobile sources controlled by the company, including emissions linked to transport activities.

⚖️ Legal obligations

The obligation to carry out a Simplified Climate Report varies according to the size of the company:

• Companies with 251 to 500 employees: The assessment had to be completed by December 31, 2022.
• Companies with 51 to 250 employees: The deadline is December 31, 2023.

These entities are required to submit their balance sheet on the ADEME platform: https: //www.bilans-climat-simplifies.ademe.fr, with an update required every 3 years.

👀 Information accessibility

Certain data from the Simplified Climate Report are made accessible to the public, reinforcing corporate transparency. This includes all simplified balance sheet results, as well as declared information such as company name and number of employees, with the exception of the contact details of those responsible for monitoring simplified balance sheets.

On the other hand, companies with over 500 employees, already subject to the obligation to draw up a greenhouse gas balance sheet in accordance with Article L 229-25 of the Environment Code, are exempt from this new requirement.

☁️ Detailed explanation of scope 1

Scope 1 refers to direct GHG emissions produced directly by the activities and facilities controlled by an organization. This includes emissions from the combustion of fossil fuels, specific industrial processes and other internal sources directly under the company's responsibility.

We can define 3 scope 1 categories:

🔥 Combustion emissions: this covers emissions from the combustion of fossil fuels such as coal, oil and natural gas in fixed installations, such as factories, boilers and heating systems.

🧪 Chemical processes: Some industrial activities can generate direct emissions due to specific chemical processes that release greenhouse gases. This may include the decomposition of substances resulting in the release of carbon dioxide (CO2) or other GHGs.

🚘 Emissions from motor vehicle fleets: If a company owns a fleet of motor vehicles, direct emissions from these vehicles also fall under Scope 1.

🌍 What impact do these emissions have on global warming?

By releasing greenhouse gases into the atmosphere, direct emissions contribute to the greenhouse effect, resulting in increased heat retention. CO2, for example, persists in the atmosphere for many decades, making a significant contribution to climate change.

Rising concentrations of GHGs in the atmosphere are intensifying the phenomenon of global warming, with consequences such as accelerated ice melt, rising sea levels, extreme weather events and ecosystem disruption.

By understanding and assessing these direct emissions via scope 1, companies can take concrete steps to reduce their carbon footprint, thereby helping to mitigate negative impacts on the climate.

⚖️ What the law says

While the Bilan Climat Simplifié focuses on Scope 1, it is essential to consider Scopes 2 and 3 to get a complete picture of an organization's greenhouse gas emissions. Current legislation underlines the importance of a global assessment of emissions, encouraging companies to integrate these different scopes into their balance sheets.

🌿🌿🌿 Taking all 3 scopes into account

What scopes 1, 2, 3 include:

Scope 1: As mentioned above, Scope 1 covers direct emissions under the company's immediate control.

Scope 2: This scope includes indirect emissions resulting from the production of electricity, heat or steam purchased by the company. Although these emissions do not come directly from the company's facilities, they do result from its energy consumption.

Scope 3: Scope 3 represents the indirect emissions associated with the company's activities, but which lie outside its organizational boundaries. This may include emissions linked to suppliers, business travel, the use of products sold, among others.

📃 Evolution of the Regulatory Methodology Nomenclature

The regulatory methodology for calculating CO2e emissions in carbon footprints has undergone significant change, particularly between versions 4 and 5, in line with the development of ISO 14064-1. This transformation mainly consists of a reorganization of existing emissions items into new categories.

Since the decree of July 1, 2022, a new categorization has been introduced, introducing a more detailed approach to calculating CO2e emissions in carbon footprints.

The new structure now includes six separate sections, each covering specific aspects of the program:

• Direct emissions (Scope 1 equivalent)
• Indirect emissions associated with energy (Scope 2 equivalent)
• Indirect emissions associated with transport (Scope 3 equivalent)
• Indirect emissions associated with purchased products (Scope 3 equivalent)
• Indirect emissions associated with products sold (Scope 3 equivalent)
• Other Indirect Emissions (Scope 3 Equivalent)

Source: Méthode pour la réalisation des bilans d'émissions de gaz à effet de serre (in French)

🚀 When we tell you that with GCI, you're one step ahead!

The calculators can be used to extend the evaluation of GHG emissions to Scope 3, in accordance with the reference framework of theBilan Carbone Association and the GHG Protocol (we even talk aboutavoided emissions, Scope 4).

GCI calculators comply with recognized regulations, standards and methodologies (ISO I14064-1, GHG Protocol, Bilan Carbone, Loi Grenelle II), and can be used to carry out GHG assessments for any type of company or local authority.

GCI's founding brief for its methodological, ergonomic and IT teams was to "desacralize the Bilan Carbone".

The user path has therefore been built along the logical and intuitive lines of the description of the entity's activity and organization, step by step:

✅ Energy: scope 1 & 2

✅ Non-energy: scope 2

✅ Assets: scope 3

✅ Travel: scope 3

✅ Purchasing: scope 3

✅ Waste: scope 3

✅ Products sold: scope 3

It is the calculator itself which, in addition to the calculations, will assign each of the categories to Scope 1 or 2 or 3, and will organize the allocation of the 23 regulatory items accordingly.

In fact, the user doesn't need any technical skills or expertise, just common sense and access to company documents to fill in the answers to the questions.

Then everyone can choose their own level of analysis:

1. 1. Simply fill in the activity questions
   2. Enrich your questionnaire with questions specific to your business
   3. Insert emission factors from other reference bases or your own suppliers
   4. Calculate uncertainties (data and emission factors)
   5. Calculate your GHG emissions per unit of output

In just a few hours, anyone can fully master the GCI tools. Once trained, they will be able to distribute this training both internally and externally.

It is important to involve suppliers, who are responsible for 50 to 80% of our own GHG emissions, in the drive to reduce emissions.