In the face of the challenges posed by climate change, businesses must take concrete steps to reduce their carbon footprint. Global warming, extreme weather events, and environmental disruptions underscore the urgency of the situation.
At the core of this effort, carbon footprint measurement appears to be one of the cornerstones enabling companies to measure and reduce their greenhouse gas emissions.
What is a carbon footprint?
A carbon footprint measures the total greenhouse gases, primarily carbon dioxide (CO2), emitted by an individual, organization, event, or product throughout its lifecycle. This metric, typically expressed in tons of CO2 equivalent (CO2e) per year, encompasses emissions from various activities like energy use, transportation, production, and waste disposal.
Understanding and quantifying a company's carbon footprint is essential. It allows them to assess their environmental impact, identify areas for emission reduction, and ultimately mitigate climate change. This comprehensive assessment evaluates emissions across the entire value chain, including energy consumption, transportation, production processes, and waste management.
Why should companies calculate their carbon footprint?
To comply with regulations.
Many countries mandate that companies calculate and report their carbon footprint. Some European countries have set up local regulations regarding carbon footprint measurements and reporting for instance in the United Kingdom, the Streamlined Energy and Carbon Reporting (SECR) policy mandates large companies in the UK to disclose their energy usage and carbon emissions. In France, the Grenelle II law requires all companies with more than 500 employees to conduct a carbon footprint assessment every four years.
The EU's Corporate Sustainability Reporting Directive (CSRD) will also require companies in the European Union with more than 250 employees to publish non-financial reporting, including their carbon footprint, starting in 2025.
To improve their brand image.
Consumers are increasingly concerned about environmental issues and expect companies to take concrete action to combat climate change. Calculating a carbon footprint allows companies to communicate transparently about their Corporate Social Responsibility (CSR) commitments and improve their brand image. It can also help them obtain a CSR certification or label, demonstrating their commitment and protecting them from greenwashing accusations.
To raise awareness and involve current and future employees.
Calculating a carbon footprint is a good way to raise awareness among employees about climate issues and the company's CSR commitments. This can improve employee motivation and loyalty and is an asset for attracting new talent. Indeed, younger generations are particularly sensitive to these issues and are looking for employers who are committed to protecting the environment.
According to a 2023 study conducted by Deloitte, 69% of surveyed employees expressed a desire for their companies to prioritize sustainability efforts. This sentiment was even more pronounced among employees aged 18 to 34 years old. These findings indicate that employees are becoming increasingly sensitive to environmental issues and expect their employers to adopt genuine sustainable development initiatives.
To reduce costs and improve competitiveness.
Conducting a carbon footprint assessment helps companies identify sources of greenhouse gas emissions and implement measures to reduce them. This reduction in emissions can lead to several benefits, including lower energy bills, waste management costs, and spending on consumables and purchases. By optimizing processes and reducing overall consumption, companies become more competitive.
To better manage risks and anticipate changes.
Measuring emissions enables companies to gain insights into climate-related risks and proactively implement strategies to mitigate them. Additionally, it equips them to anticipate regulatory shifts and embrace emerging technologies. By preparing for these dynamics, companies position themselves to sustain competitiveness over the long term.
For further insights into why companies should undertake this process, refer to our article "5 reasons to calculate your company's carbon footprint".
Choosing the right partner for carbon footprint measurements.
There are several ways to calculate a company's carbon footprint. It can be done internally by a trained employee with a particular interest in the subject, or it can be outsourced to a consulting firm specializing in climate strategy and carbon accounting. Another option is to use SaaS (Software as a Service) platforms or technological solutions like Kabaun, which facilitate the data collection, measurement, and management of greenhouse gas emissions.
The choice of who will conduct a company's carbon footprint depends on several key factors. The size and complexity of the company will play an important role, as will the available budget. The level of internal expertise in carbon footprinting will also be a factor to consider, as will the company's objectives: simple assessment or emissions reduction strategy.
Whichever approach is chosen, it is essential to collect information from the organisation's different departments. Involving the entire company in the process is crucial to obtain accurate and complete data. In addition, the company's stakeholders and suppliers can also be involved, especially if the organization wants to establish a carbon footprint that covers its entire value chain.
How is a company's carbon footprint calculated?
Define the perimeter of the carbon footprint measurement
The first step in calculating a carbon footprint is to define its perimeter.
Temporal perimeter: The period over which the carbon footprint is calculated, which can be, for example, a calendar year or a fiscal year.
Organizational perimeter: The entities included in the carbon footprint, which can be the entire company, a site, a subsidiary, etc.
Operational perimeter: This is generally defined according to scopes 1, 2 and 3 of the GHG Protocol. For a carbon footprint to be comprehensive and reliable, it must consider all of the company's emissions, both direct and indirect.
Collect company data
The company needs to gather extensive data regarding its operations. This collection process involves sourcing information from diverse sources, both internal and external. Internally, the company gathers data on energy consumption, employee travel, and production processes. Concurrently, external data from business partners and suppliers is also indispensable.
This thorough approach ensures that all activities contributing to greenhouse gas (GHG) emissions are accounted for in the carbon footprint. The data collected is then categorized into emission scopes:
Scope 1: direct emissions from the company
Scope 2: indirect emissions related to energy
Scope 3: other indirect emissions (purchases, freight, end of life of products, etc.)
Consolidation and calculation
Once the data is collected, it is crucial to ensure its accuracy and completeness. This involves checking that there are no omissions or duplicates.
To evaluate the carbon impact of the collected data, it must be correlated with an emission factor. An emission factor is a numerical value that measures the amount of greenhouse gases emitted per unit of activity, consumption, or production. It acts as a conversion factor to estimate greenhouse gas emissions linked to specific processes, products, or services. This calculation involves multiplying a company's activity data (whether physical or monetary) by the corresponding emission factor.
There are 2 types of emission factors:
Physical emission factor: represents the quantity of CO2 emitted per unit of activity or consumption (kilometers, kilograms, etc.).
Monetary emission factor: an indicator that expresses the average emissions associated with a unit of currency spent on a particular good or service
Many private and public emission factor databases exist, such as Base carbone®, Agribalyse, DEFRA, or Exiobase for monetary emission factors.
Analysis and reporting of results
A company's carbon footprint is generally expressed in tonnes of carbon dioxide equivalent (CO2eq or CO2e). CO2e is a unit of measurement to compare the impacts of different greenhouse gases (GHGs) on climate change. There are other GHGs, such as methane (CH4) and nitrous oxide (N2O), which have a different global warming potential (GWP) than CO2. In other words, these GHGs have varying impacts on the climate despite being emitted in the same quantity. The CO2e unit is used to facilitate direct comparison and comprehensive assessment of emissions from all GHGs.
The findings of the carbon footprint assessment are typically presented in the form of a carbon report, which includes a detailed analysis of emission sources. This report should be accompanied by an action plan and recommendations to assist the company in reducing its environmental impact.
The importance of building an action plan to reduce your company's emissions
A company can significantly reduce emissions by implementing a comprehensive action plan with buy-in from management and employees. Central to this effort is fostering awareness of energy and climate issues among all internal stakeholders to ensure successful implementation.
The action plan should be grounded in a precise carbon footprint assessment, helping the company prioritize emission reductions and allocate resources efficiently. This approach avoids excessive efforts in sectors with limited emission reduction potential and aligns with global objectives, such as those outlined in the Paris Agreement, aiming to limit global warming to 1.5°C compared to pre-industrial levels.
Numerous actions can be undertaken to reduce your company's carbon footprint, including:
Mobility: Implement sustainable mobility plans to reduce emissions from employee travel, promote telecommuting, etc.
Energy: Enhance energy efficiency by regulating energy consumption (heating, air conditioning, electricity), improving building insulation, etc.
Suppliers: Opt for conscientious service providers and suppliers to support responsible purchasing, locally sourced products, waste recycling, etc.
By implementing measures and developing a robust action plan, companies can make significant strides toward reducing their carbon footprint and contributing to a sustainable future.
Why choose Kabaun to conduct your corporate carbon footprint?
Faced with the urgent challenges of climate change, companies must adopt an ambitious climate strategy. Carrying out a precise and complete corporate carbon footprint is the cornerstone of this approach.
Kabaun can help you carry out your carbon footprint with our Carbon Management Platform, an API-first solution that streamlines data collection, measurement, and analysis of all your carbon data. Our comprehensive platform empowers you to manage your entire carbon footprint journey, from initial data collection to final reporting.