Calculating a company’s carbon footprint is a key component on the zero-carbon transformation and it starts by developing a sustainability strategy. The carbon footprint provides an overview of the company’s greenhouse gas emissions (GHGs), identifies emissions’ hotspots across your value chain and helps identifying the targets to set to reduce the climate impact. Reducing or offsetting the greenhouse gases produced by an organization is one of the solutions companies can adopt to align themselves with the SDGs and curb the fallout from climate change.
Where do I start?
When calculating a company’s carbon footprint, what must be considered is that not all emissions have the same characteristics. The Greenhouse Gas Protocol, the most widely used international tool for calculating and reporting the emissions inventory, classifies emissions into three groups: Scope 1, Scope 2 and Scope 3.
- Scope 1: are the direct emissions that occur from sources owned or controlled by the company. In daily processing, most Scope 1 emissions are from stationary combustion. However, mobile emissions, process emissions and fugitive emissions are also counted as Scope 1 if the company owns or controls the activities or equipment associated with the emissions.
- Scope 2: are the indirect emissions from the generation of purchased energy. The emissions resulting from the production of grid electricity or steam are accounted for under this scope.
- Scope 3: includes the indirect emissions result of an organization’s operations, but not owned or controlled by the company, e.g. emissions associated with the supply chain, investments, and even the use of the products sold.
From a company’s perspective Scope 1 and 2 are the easiest to control. However, much of the greenhouse gas emissions and many cost reduction opportunities lie outside the company’s own operations. Therefore, taking Scope 3 emissions into account enables energy efficiency of products to be improved, suppliers to be more engaged in implementing sustainability initiatives, and many resource and energy risks of the supply chain to be identified.
Once a clear classification is obtained, one of the first challenges that companies face when calculating their carbon footprint is to select the appropriate emission factor for each emission source to calculate the tonnes of CO2 emitted. It’s also important to ensure that the data is for a consistent period. Ultimately, each organisation is different and therefore has differing material emission sources.
By calculating the carbon footprint, companies can identify the best strategic approach for reducing emissions, setting robust targets (ideally Science Based) and making the company Climate Neutral, beginning thus, the journey towards the net zero transition and readying the company for the demands this will bring. In addition, many companies have found that carbon footprints help them spot significant cost saving opportunities, as well as opportunities to significantly reduce the carbon-intensity of their products and services.
To get started on your sustainability strategy, contact our Climate Action team, here.