Appendix D: Greenhouse gas inventory project

Below, we outline our assumptions and calculation methodology for the 2023 greenhouse gas inventory project. They are based on the Greenhouse Gas Protocol methodology, which we used to estimate our carbon footprint from Scope 1, Scope 2, and Scope 3 emissions.

Boundary setting

Our inventory project uses an operational control approach, in alignment with the GHG Protocol whereby we account for 100% of the GHG emissions from sources over which we have operational control. Operational control is defined as those areas in which we have the authority to introduce and implement operating policies at the worksites.

Our emissions estimation methodologies and assumptions

Scope 1: Direct GHG emissions

To estimate our Scope 1 emissions, the following items were included:

• BDO has natural gas Scope 1 emissions. There are no other substantive fuels (directly combusted) emitted by our worksites.
• We estimated refrigerants and other fugitive emissions to be negligible/immaterial and have therefore assumed zero emissions from these sources.

Scope 2: Indirect GHG emissions

Our Scope 2 emissions include purchased electricity and steam. We have a limited number of worksites which use purchased heat or steam—these were included as part of our Scope 2 emissions estimates.

We made considerable improvements in the data collection process and continue to employ extrapolation methods in our calculation for worksites with unavailable data.

Scope 1 and Scope 2 emissions were based on the following information:

• Electricity activity data: We leveraged data representing 68% of the total leased space, a significant improvement from 44% in 2022.
• Natural gas activity data: In 2023, we started developing a comprehensive database of the worksites that use natural gas. As a conservative approach, the Scope 1 emissions extrapolation assumed that all worksites within our operational boundaries use natural gas.
• Building area footprint: For offices with no disaggregated common area maintenance (CAM) data, we established a ‘manufactured’ CAM% based on Leadership in Energy and Environmental Design (LEED) certification rating estimates and aligning with the Building Owners and Managers Association Standard Methods of Measurement (BOMA) for Canadian Property Evaluation by the Appraisal Institute of Canada.
• Worksites with unavailable data: For worksites without accurate leased area information, we used the median space of all known worksites and extrapolated the kilowatt hour (kWh) usage per month per square foot.
• Provinces with unavailable emissions data: For provinces with worksites lacking reported emissions data, we used the conservative data factors from the highest province within Canada and multiplied these data factors by the total office area to estimate emissions.

Scope 3: Other indirect GHG emissions

The following categories were included as part of our Scope 3 emissions:

• Category 1: Purchased goods and services 
• Category 2: Capital goods
• Category 4: Upstream transportation and distribution
• Category 5: Waste generated in operations

  • We used the spend-based extended environmental input-output (EEIO) method to estimate the emissions of these four categories. To convert the spending total to estimated emissions, we used the 2021 U.S. EPA Supply Chain Greenhouse Gas Emissions Factors and adjusted for appropriate foreign exchange and inflation rates (i.e. the consumer price index).

    In 2023, we shifted the waste emissions calculation from extrapolating from available data to the EEIO method. We recognize the difficulty in collecting waste activity data (landfill, recyclable, and organic waste) and it remains an area for improvement. This is because most of our leased worksites outsource waste disposal to third-party vendors that do not track the waste output. We will continue to work with our real estate brokers and property managers to improve our waste data.

• Category 3: Fuel and energy-related activities
  • In 2022, we did not include this category in our emissions reporting as we deemed it to have been captured as part of our Scope 1 and Scope 2 emissions. In 2023, we determined that this category should be included separately in a net zero-aligned carbon footprint, as it is a data point the SBTi expects to see when carrying out its verification process. We revised our approach for our 2023 reporting.
• Category 5: Waste (water) generated in operations
  • Given the limitations in the data set available as part of our inaugural GHG inventory project, we extrapolated our wastewater emissions based on the following information:
    • We estimated a per-person usage/output from the data available and applied this estimate to the total BDO worksite population (average headcount over January 2023 to December 2023). 
    • The percentage of those coming into the office is calculated using IT login data from January 2023 to December 2023.
• Category 6: Business travel
  • For 2023, we used the spend-based method to estimate emissions associated with business travel. To estimate the emissions from the spend data, we used EEIO emission factors from the 2021 U.S. EPA Supply Chain Greenhouse Gas Emissions Factors and adjusted for appropriate foreign exchange and inflation rates (i.e., the consumer price index).
• Category 7: Employee commuting and remote work

  • Employee commuting is another contributor to our Scope 3 emissions. Given the limited data available on the type, quantity, and cost of fuel consumed during transportation, as well as the mode of transportation used by individual employees, we estimated the emissions based on average data of commuting patterns.

    We achieved a 41% participation rate for our commuting survey, an improvement from 29% in 2022. The percentage of those commuting to the office is calculated using IT login data from January 2023 to December 2023.

    For estimated emissions related to remote work, we used the highest energy configuration of equipment currently provided to employees. This is calculated based on the energy consumption rates of the most common equipment model in the computer series in use and assuming an average operating time of eight hours per day.

• Category 13: Downstream leased assets

  • Of the worksites within the 2023 reporting boundary, four of our spaces are subleased. They account for approximately 4% of BDO Canada’s total square footage.

    As we continue refining our data collection process and improving the quality of our data and estimates, we will consider recalculating our base year emissions, once established, upon occurrence of any of the following circumstances:

    • Structural changes in the firm.
    • Changes in the calculation methodology or improvements in the accuracy of emission factors and activity data that result in improved accuracy and have a significant impact on the base year estimates.
    • Discovery of significant errors.