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5 reasons to calculate your company's carbon footprint

Updated: Mar 28

Measuring our greenhouse gas emissions has become essential in the fight against climate change. Without rigorous carbon accounting, it is not possible to implement effective measures to reduce GHG emissions and meet national and global targets. Several tools are available to account for emissions depending on the scope of the measures: the carbon footprint assessment is a suitable method for businesses, organizations, and territories. 



What is carbon footprint measurement?


Carbon footprint measurement refers to the quantification of the total amount of greenhouse gases, particularly carbon dioxide (CO2), emitted directly or indirectly by human activities. These activities include the consumption of fossil fuels for transportation, energy production, industrial processes, and various daily operations undertaken by companies and organizations, such as heating or cooling facilities, using electronic devices, and managing waste.


The concept of carbon footprint aims to assess the environmental impact of human actions in terms of their contribution to climate change. It helps companies and organizations understand and evaluate their environmental impact, identify areas where emissions can be reduced, and implement strategies to mitigate those emissions.

Carbon footprint measurement typically involves calculating emissions across different sectors, such as energy, transportation, waste management, and agriculture. Various methodologies and tools are used to quantify emissions. Additionally, carbon footprint measurement is often used for corporate sustainability reporting, environmental certifications, and policy development aimed at reducing overall greenhouse gas emissions. 


But why should companies conduct a carbon footprint measurement? Here are the top 5 reasons:


carbon-footprint-reasons


1. Assessing the environmental impact of the company

The greenhouse gas (GHG) inventory or carbon footprint allows for the accounting of all greenhouse gases considered by the United Nations Intergovernmental Panel on Climate Change (IPCC). Realizing a carbon footprint is an essential tool for assessing the environmental impact of your company. It integrates the scopes 1, 2, and 3 established by the GHG Protocol, which includes direct GHG emissions, indirect emissions resulting from energy consumption, and indirect emissions linked to the entire value chain of the company, from purchasing to the use of services or products. This assessment forms a robust foundation for implementing a low-carbon strategy or embracing Corporate Social Responsibility (CSR).




2. Meeting legal requirements

One of the reasons companies should conduct a carbon footprint analysis is to meet legal requirements. The expansion of carbon reporting legislation globally means that non-compliant businesses may face significant penalties, damage to their reputation, and legal action.


Effective in 2024, the Corporate Sustainability Reporting Directive (CSRD) significantly strengthens the existing Non-Financial Reporting Directive (NFRD) by expanding its scope and increasing the number of companies required to report. This European directive now mandates that all large companies (over 250 employees) and listed Small and Medium Enterprises (SMEs meeting specific criteria) disclose data related to environmental, social, and governance (ESG) issues annually through a published ESG report.


Other regulations already in place force certain types and sizes of companies to measure and reduce their emissions:

  • France: The "Bilan des émissions de gaz à effet de serre" (BEGES) targets, among others, private companies employing more than 500 people, which have to report on their GHG emissions every 4 years

  • United Kingdom: The Streamlined Energy and Carbon Reporting (SECR) framework mandates sustainability reporting, focusing on both the organization's greenhouse gas (GHG) emissions and its energy efficiency improvement efforts.


By embracing proactive carbon footprint management, companies not only ensure compliance with evolving global environmental regulations but also position themselves strategically to navigate the challenges and seize the opportunities presented by the imperative shift toward a low-carbon economy.



3. Raise awareness and involve employees and future talents

Creating a carbon footprint extends beyond fulfilling regulatory requirements. It fosters a culture of sustainability throughout the entire organization by involving multiple departments, from procurement to production and sales. This collaborative effort raises awareness among all employees regarding climate issues and the company's commitment to Corporate Social Responsibility (CSR).


Furthermore, in today's competitive job market driven by talent, a strong CSR reputation attracts top-tier performers. As public awareness of environmental concerns continues to grow, a company's dedication to sustainability becomes a significant factor for job seekers. By voluntarily conducting a carbon footprint assessment and implementing strategies to reduce emissions, companies not only strengthen their environmental credentials but also enhance their employer brand. This dedication appeals to highly sought-after talent, thereby providing a competitive edge in recruitment.


A passionate and well-informed workforce emerges as the company's most influential advocates, authentically promoting its commitment to sustainability.


4. Reduce costs and gain competitiveness

By understanding their greenhouse gas emissions, companies can identify areas where they can make operational changes to improve efficiency and reduce costs


One of the sources of greenhouse gas emissions stems from the energy consumption required for the company's activities. Measuring this consumption and implementing measures to reduce it has the advantage of automatically lowering the energy bill. There are various actions that companies can take to reduce their energy expenses: improved insulation, decreased heating and air conditioning usage, maintenance of heat pumps, opting for sustainable lighting, implementing night-time shutdowns, practicing computer efficiency, and deploying an automated energy management system.


Other factors contributing to greenhouse gas emissions serve as levers for cost reduction within a company, including waste management, judicious use of consumables, process streamlining, and optimizing the purchasing function. The carbon footprint thus lays the groundwork for a comprehensive strategy to diminish the company's environmental impact and costs, ultimately enhancing its competitiveness. Companies that lead the way in adopting sustainable practices may be able to command higher prices for their products or services.  


5. Improve brand image

Consumer expectations are shifting towards environmental consciousness and social responsibility. Companies that proactively take on carbon accounting demonstrate alignment with these values, strengthening their brand image as responsible businesses and bolstering their reputation among key stakeholders.


Measuring a carbon footprint provides a standardized tool. It allows companies to not only gauge their environmental impact but also communicate it transparently. This transparency builds trust with consumers seeking responsible businesses, enhancing brand image and positioning the company as a sustainability leader.


A comprehensive carbon footprint assessment can pave the way for coveted CSR certifications or labels such as B corp certification. This external validation reinforces a company's commitment to sustainability for all stakeholders, including investors, partners, and regulatory bodies. It shields the company from greenwashing accusations and showcases a genuine commitment to environmental responsibility.



Conclusion

Beyond the legal obligations and the myriad advantages outlined here, the carbon footprint assessment is indispensable for the company's role in mitigating climate change. It aligns with the imperative of collective action to achieve the goals set by COP 21 and the Paris Agreement, seeking to limit global warming to a 1.5°C increase. These collective endeavors are crucial within the broader context of a global energy crisis, necessitating a swift transition to new consumption and operational paradigms.

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