Carbon footprint calculation is an essential part of responsible and sustainable operations. The results can help you set adequate emission reduction targets, design appropriate reduction measures, and meet the requirements of your changing business environment.
The carbon footprint is a measure used to determine climate impact over a certain period of time. It is possible to calculate a carbon footprint for almost anything, but in most cases it is done for businesses and organisations, as well as products and services. The results are given in carbon dioxide equivalents (CO2e), a unit of measurement used to convert the emissions from various greenhouse gases to a comparable form. In addition to carbon dioxide, the calculation also includes other greenhouse gases typically generated by business operations, such as methane and nitrous oxide.
Carbon footprint calculation as the first step
Organisations striving for climate responsibility often start their efforts by calculating their total carbon footprint. The organisation’s own business locations and main operations are all included in the calculation. The carbon footprint calculation is based on the standards and guidelines of the Greenhouse Gas Protocol (GHG Protocol). GHG Protocol is the best-known and most widely used guideline for calculating greenhouse gas emissions.
The carbon footprint calculation must include the mandatory Scope 1 and Scope 2 emissions, which are generated by activities such as fuel combustion and the production of purchased energy. Including Scope 3 emissions is optional, but it is recommended to review those indirect emission sources that have been identified as the most significant, depending on the industry. The Greenhouse Gas Protocol also contains guidelines for calculating Scope 3 emissions.
To ensure that the correct input data is collected, and the calculation is delimited and executed correctly from the outset, we recommend you enlist the help of an expert consultant.
Which sources typically generate the most emissions at the organisation level?
In general, it can be said that the biggest factor affecting the total carbon footprint of an organisation is its line of business. Some sectors and industries are more energy and raw-material intensive than others. The size of the organisation is also significant, as the number of locations and size of the workforce determine the level of emissions cumulated.
Out of the different emissions categories, Scope 3 emissions typically comprise the largest share. Particularly significant emission sources in this category often include raw materials and other materials, products, or other goods and services purchased by the company. These can often account for more than 80 percent of the total carbon footprint. The use of electricity and heat at an office or other location occupied by the organisation is part of Scope 2, and it can become a significant contributing factor. However, this essentially depends on the origin of the energy produced.
Before the pandemic, business travel and commuting could also be a significant source of emissions in many organisations, especially if representatives frequently attended meetings or seminars abroad. These emissions dropped close to zero during the pandemic. It remains to be seen how broadly remote meeting practices established during the pandemic are applied in the future, as they play a pivotal role in reducing emissions from work-related travel.
Why is it a good idea to calculate your carbon footprint?
Calculating carbon footprint allows you to identify the emissions generated by your operations, but you should not stop there. The true value of carbon footprint calculation lies in identifying areas that offer potential for reducing emissions. The results enable you to draft a more concrete climate strategy with goals, targets, and actions to reduce emissions based on measured data. Often, emission reduction measures also generate savings by making your operations more efficient.
Monitoring your own climate impact is part of business today, and climate responsibility has become a topic of discussion in every industry. Many companies have seen their customers become more climate-aware, which leads to calls for concrete facts and verified numbers in the company’s communications and sustainability measures.
The EU’s Corporate Sustainability Reporting Directive (CSRD) took effect on 5 January 2023. Regarding the calculation and reporting of greenhouse gas emissions, the directive makes it mandatory for listed companies to report their carbon footprint for the year 2024. Sustainability reporting may also be extended to small and medium-sized enterprises in the future. However, larger companies already need to collect carbon footprint data from all the companies in their supply chain, regardless of size. Furthermore, investors also want to review the climate impact of the operations they are about to finance before making decisions.
The demands of investors and customers can also be met with product-specific carbon footprint calculations. A verified environmental product declaration provides transparent and comparable information on the climate impact of the product.
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