How emission factor verification supports decarbonization – case study with Indigo Ag

Businesses are striving to meet ambitious net zero targets and report emissions with new levels of accuracy required by evolving regulations. At the core of this challenge lies the emission factor – the foundational metric for inventory reporting and credible climate claims. Companies are transitioning from relying on static, pre-verified emission factors from standardized databases, to creating bespoke, dynamic, supply-chain specific emission factors to reflect the investments that they make to drive progress towards climate targets. Navigating this transition with confidence has become a critical aspect of corporate decarbonization strategies.

In the fall of 2024, SustainCERT partnered with Indigo Ag, an agritech service provider working with brands to produce supplier-specific field-level emission factors, to verify the methodology used to calculate a bespoke emission factor for row crop production in the United States.

Learn why companies need accurate GHG emission factors and how verification can add fidelity and assurance to Scope 3 outcomes below.

To build a corporate greenhouse gas (GHG) inventory, companies collect data on their activities – like how much energy they use or what ingredient purchases they are making. Then, they multiply these activity values by emission factors, which are pre-determined values that quantify the GHG emissions associated with each unit of activity (e.g., per kilowatt-hour of electricity or per pound of ingredient purchased). By aggregating these calculations across all business functions, companies can estimate their total GHG emissions.  

Obtaining granular emission factors is paramount for companies to accurately track progress over time, claim emission reductions from interventions, and ultimately report against Science Based Targets (SBTs).

Often, GHG emission factors are sourced from external or national databases that rely on regional or sectoral averages. These come with some challenges. Because these databases use secondary data, they often (but not always) lack the technological, geographical, and temporal representativeness needed to accurately reflect the specific processes within a company’s operations.  For example, the databases may cover a large geographical area, which means the impact of regional micro-climatic conditions is not captured. Or, if the database is not regularly updated, the data can quickly become outdated, which means the emissions calculations may not accurately reflect current common practice, or annual weather fluctuations.   

Perhaps most importantly, emission reductions caused by interventions in a company’s value chain are not reflected in these broader averages. In other words, relying on industry averages means that a company cannot receive recognition for the specific, supplier-focused practices it adopts to reduce emissions in its own supply chain. This can make it difficult – if not impossible – for  companies to report the impacts of their investments in value chain interventions, and thus establish internal buy-in and align their inventory results with relevant reporting standards.

For all these reasons, companies are increasingly looking for more accurate, relevant and real-time data to inform emission factors to respond to scrutiny on their GHG emissions, report in line with emerging standards and regulations, and find the most effective ways to reduce their Scope 3 emissions.

Indigo Ag works with brands to produce supplier-specific field-level emission factors for use in their inventory to claim emissions reductions and removals. Indigo Ag partnered with a food and agriculture company to conduct an assessment of the emissions associated with corn production in their US supply chain in 2023. The outcome of the project was a cradle-to-farmgate emission factor, representing the weighted average emissions intensity of corn production in their company-specific US supply chain. This includes all of the emission sources associated with the production of corn, including upstream emissions from producing inputs like fertilizers, as well as on-field emissions associated with sources such as soil carbon and combustion of fossil fuels and machinery. The project emission factor attained verification at a level of limited assurance and was verified against the GHG Protocol’s suite of standards, including the draft Land Sector and Removals Guidance (LSRG).

Case Study Details:

• Corn was a major hotspot in the GHG inventory of Indigo Ag’s client. Before this project, the client had been using a default emission factor for their US corn emissions. Quantifying the supplier-specific corn emission factor helped improve the accuracy of their inventory and identify opportunities for improvements in the process.
• The first step in the project was to define the supply shed of the reporting company. Indigo Ag leveraged procurement data to map out several sourcing areas which represent the draw area for all of the reporting company’s U.S.-based vendors.  It was then possible to quantify emission factors for each of the identified sourcing areas, where the emission factor represents the average intensity of corn production in that sourcing area in 2023.
• Using a combination of emulator models, Indigo Ag estimated cradle-to-farmgate emissions associated with the production of corn on every field within the sourcing areas. The total emissions were then summed up and divided by the total bushels produced for each sourcing area, yielding the emission factor in CO2 equivalents per bushel. Finally, Indigo Ag utilized procurement volumes for each sourcing area, to generate a company-specific weighted average US corn emission factor. This US level corn emission factor was then verified by SustainCERT.
• Indigo Ag was able to identify multiple differences between using the supplier-specific emission factor compared to an emission factor from an external database. There is tremendous variability across geographies within the client’s sourcing region. Even within a state, there can be a wide range of local climates, production systems, and weather patterns that create this immense variability.

In addition to using more granular data to build more accurate inventories, having a better understanding of the regional conditions and emissions characteristics empowers companies to tailor projects for the climate that they're working in, and maximize value chain investment. Pairing these technological capabilities with deep partnerships with regional cooperatives that engage with farmers, Indigo Ag was well positioned to understand the prevailing practices in the region and identify the practices that are more impactful and that farmers want to participate in. This can improve resilience in the value chain as well as increase emission reductions and carbon sequestration.

Indigo Ag decided to pursue verification of this emission factor for several key reasons. First, they wanted to build confidence in their methodology and project outcomes. With growing scrutiny in the market, companies need assurance that the projects they invest in align with relevant standards and maintain high quality. Second, some of their customers have auditing requirements; having the emission factors verified streamlines the process, reducing the back-and-forth with auditors by providing a trusted, pre-approved metric. Finally, while Scope 3 verification is not yet required, regulations and standards are constantly evolving, and verification may become a requirement down the line for many companies. Going through verification now allows service providers and verifiers to understand the process and be prepared for what’s ahead.

Indigo Ag chose to pursue verification at a limited level of assurance – this level of assurance is better suited for the annual corporate reporting cycle, and likely to meet all relevant requirements. Indigo Ag specifically sought verification against the GHG Protocol’s suite of standards, with a focus on the draft Land Sector and Removals Guidance, given its importance for corporate climate accounting and reporting. Through an iterative process, SustainCERT reviewed Indigo Ag’s data inputs, methodology, and internal QA/QC processes against the GHG Protocol’s requirements. SustainCERT’s assessment concluded that Indigo Ag successfully met the standards for limited assurance, and SustainCERT issued the finding that Indigo Ag’s emission factor calculation was not found to deviate from requirements of the GHG Protocol.

Verifying the emission factors from specific sourcing locations helps build confidence in emissions data accuracy, leading to more credible Scope 3 reporting. It also responds to increasing requirements to verify Scope 3 inventory data in regulations such as the CSRD, and ensures alignment with relevant GHG Protocol standards. Verified, location-specific data enables year-on-year comparisons to track changes in emissions as projects progress, and helps organizations justify premium pricing for goods with lower emission factors. Finally, presenting verified data supports collaboration across the value chain through enhanced transparency and trust, helping companies scale value chain decarbonization.

Get in touch with our team to learn how SustainCERT can support you.