6 May 2021
Updated on May 2023
Protecting and preserving the planet has become vital today. Every company must contribute to this, but in the best possible way, without taking the easy way out or being too approximate, and therefore without greenwashing. This article covers the basic elements of a carbon footprint to help you become a fully-fledged player in the climate transition.
How to measure your emissions properly?
A complete and robust carbon footprint is the starting point for any climate strategy. To do this, it is essential to identify the sources of greenhouse gas (GHG) emissions that depend directly or indirectly on the organisation’s activities.
The carbon footprint includes all the GHG emissions linked to an organisation’s activities over a given period.
What does this mean in practice? Emissions are calculated by multiplying activity data by emission factors.
The important question therefore is to identify the limits of the activities to be taken into account. To do this, the organisational boundaries must be determined, i.e. which sites, subsidiaries or subcontractors should be considered. There are very precise rules and it is essential to follow them to guarantee the robustness of your calculation.
Among the existing standards, the GHG protocol is currently the most internationally recognised for the accounting and reporting of greenhouse gases. This protocol clearly describes the sources of emissions to be taken into account and the reporting structure to follow.
The GHG protocol is used as a basis for the Science Based Targets initiative. The purposes of this initiative are:
- Define and promote best practice in emissions reductions and net-zero targets in line with climate science
- Provide technical assistance and expert resources to companies who set science-based targets in line with the latest climate science
Once the organisational boundaries have been defined, a distinction is made between direct and indirect emissions. The GHG protocol divides emission sources into three distinct operational boundaries:
Figure 1: Overview of GHG protocol boundaries and emission sources in a company’s value chain. Source: GHG Protocol.
- Scope 1: direct emissions controlled or owned by the organisation
- Scope 2: indirect emissions resulting from the production of electricity, heat, cooling or steam purchased by an organisation
- Scope 3: other indirect emissions that are a consequence of the company’s activities, but from sources owned or controlled by another company
Which operational scope to take into account?
The question of scope always arises. How far should emissions be taken into account? Despite the GHG protocol’s specific requirement to account for all emissions (both direct and indirect), many companies only look at part of their emissions. Restricting the scope of its emissions to those under its control allows companies to reduce their emissions and to communicate more important relative reduction objectives. In addition, a smaller scope will reduce the potential cost of external mechanisms such as offsetting, which is regularly questioned. It is all the more tempting as it is permitted by certain other standards (ISO 14064, PAS 2060) which only really require scope 1 and 2 to be taken into account[1].
Figure 2: Benchmark showing the diversity of emissions reporting by companies in the construction sector in Europe. Source: CLIMACT.
However, the narrow scope approach has risks and does not allow an organisation to seize the opportunities associated with addressing emissions across the value chain. Rather than risks, becoming a transition actor by starting with a comprehensive corporate carbon footprint offers opportunities, as illustrated in the figure below.
Figure 3: Opportunities linked to the inclusion of a full carbon footprint. Source: CLIMACT.
Scope 3 emissions can seem complex to measure because they are a consequence of a third party’s activities. However those emissions account on average for 75% of a company’s carbon footprint.
Calculating a scope 3 inventory is an important part of a climate strategy and dividing the task in relevant subtasks is key.
In conclusion, CLIMACT recommends measuring the carbon footprint using a full scope of emissions for the development of the overall strategy. By measuring its carbon footprint over a wide area, a company gets to ask itself the right questions and act in a structured and effective way against climate change.
[1] For example, PAS2060 allows for the exclusion of scope 3 categories for which accounting is not “technically or practically feasible, or cost-effective”.