Knowledge

All You Need to Know About the Corporate Carbon Footprint

These days, an increasing number of companies are pursuing ambitious carbon reduction targets towards carbon neutrality. However, a systematic reduction of greenhouse gas emissions is only possible if emission intensive hotspots can be identified and quantified. Accordingly, businesses can take a closer look at their Corporate Carbon Footprint with the goal of calculating the main emitters of their company. 

What is a Corporate Carbon Footprint?

A company’s carbon footprint, also known as Corporate Carbon Footprint (CCF), is usually the first step towards carbon neutrality, because without transparency about its own emissions, it is impossible to define realistic goals and climate strategies. The Corporate Carbon Footprint includes all emissions that are influenced by a company’s decision. This means that in addition to direct emissions, all indirect emissions are also included. For manufacturing companies this implies that the entire value chain is part of the Corporate Carbon Footprint. This includes all emissions from the supply chain, logistics, usage phase and disposal of all products. The Corporate Carbon Footprint is usually determined for a specific period, such as a calendar year, and changes between reporting periods.

The calculation of the Corporate Carbon Footprint can serve various purposes: On the one hand, it creates transparency and thus enables measures to reduce emissions. This also supports the identification of climate-relevant risks and opportunities. On the other hand, companies signal to their stakeholders such as employees, customers and investors that they are addressing the issue and accepting responsibility. 

How to calculate a Corporate Carbon Footprint?

When calculating the carbon footprint of a business, one of the first steps is to define the scope of consideration. In the case of Corporate Carbon Footprints, this is largely defined by various standards such as the GHG Protocol or ISO 14064.

The basis for the calculation of a Corporate Carbon Footprint is the data given on business activities: Almost every action and decision of a company can cause carbon. The more comprehensive and exact this data is available, the more accurate the calculation will be. This includes data that is usually available within the company or is easy to retrieve, such as energy consumption (electrical and thermal) and the energy supplier. Company car travels and business trips are also often well documented. Using this activity data and appropriate emission factors, the corresponding greenhouse gas emissions are calculated for each activity.

However, greenhouse gases are also produced in processes that take place outside the company, but are caused by decisions made by the company. These include for example production processes from suppliers from whom the company has ordered products. Services provided by other companies and employee commuter traffic also fall into this category. In some cases, the energy consumption of the products manufactured by the company during the usage phase at the customer’s premises also causes considerable emissions. These so-called Scope 3 activities are activities of which companies are often unaware, but which usually cause a significant part of the company’s emissions.

In principle, there is a wide range of methods for recording these Scope 3 emissions. The most accurate method is to request consumption data from employees, suppliers and service providers. However, since this is often not possible, there are various recognised databases that can be used to evaluate various business activities on the basis of key figures available in the company, such as the number of employees, purchase quantities or sales, although the accuracy decreases depending on the method used. In particular purely cost-based approaches are usually very imprecise, since average values over entire industrial sectors are used here, so that we always recommend to calculate carbon emissions at least on the basis of the purchased material quantities.

What is the best way to get started?

Planetly recommends a two-step procedure in which the Corporate Carbon Footprint is first calculated to obtain an overview of all emissions generated by your company. After the analysis, you can identify effective reduction measures and make your entire company carbon neutral through offsetting remaining emissions that you cannot yet avoid. The Corporate Carbon Footprint also provides a better starting point for defining and implementing carbon reduction strategies through the complete analysis of all emission sources. It is possible that, in addition to production or purchasing of products, there is also an enormous need for action in the area of business travel, which is difficult to credit to individual products. There is also the option to significantly reduce the corporate carbon footprint, for instance, by terminating cooperation with individual, highly greenhouse gas-intensive suppliers.

The second step would be to increase the depth of analysis at a product-level, in order to calculate all product-related emissions. In this way, a Product Carbon Footprint analysis can be carried out on the basis of the analysis and data collection processes already built into the Corporate Carbon Footprint. Are you curious to know how such a carbon footprint calculation at product-level is done? Then also take a look at our article about the Product Carbon Footprint. We are happy to take up these and other questions in order to find the best solutions for your business.

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