We live in a world where the climate crisis should be a concern for everyone. We are seeing more being done by consumers to combat the problem of global warming, thus creating a demand for companies to calculate their carbon footprints.
Did you know? – Out of the top 20 companies that have the highest carbon footprint, 12 are state-owned. These 12 companies produce 20% of the total emissions of greenhouse gases.
It is important for any company aiming for a net-zero future to calculate their carbon footprint, assessing and pinpointing areas to improve on. Using this information, businesses can report their findings to stakeholders and customers. There are plenty of benefits to calculating your carbon footprint and for some companies, it is a mandatory task.
What Is a Carbon Footprint For Businesses?
When talking about carbon footprints, we think about factories producing chemicals into the atmosphere. In business, it is the amount of CO2e created during a calendar year.
Not only is it from production, but also other activities. This includes energy consumption, manufacturing, staff travel and more. More comprehensive audits will measure other emissions, such as transporting goods to your business, refrigerant emissions, travel in vehicles not owned by the company and even website hosting emissions.
There is a value chain, which measures the lifespan of a product. This measures the greenhouse gas emissions from extracting raw materials, manufacturing, transport and even the disposal of the product.
To be exact, a carbon footprint is the amount of greenhouse gas emissions that are created by either a product or an organisation. A carbon footprint takes in all 6 Kyoto greenhouse gas emissions:
- Methane (CH4)
- Carbon dioxide (CO2)
- Sulphur hexafluoride (SF6)
- Hydrofluorocarbons (HFCs)
- Perfluorocarbons (PFCs)
- Nitrous oxide (N2O)
Why is Calculating Your Carbon Footprint Important?
- Helping to combat climate change – There is a climate crisis currently sweeping across the globe and each business plays a part in fighting it. By calculating your businesses carbon footprint, you can analyse ways to reduce your energy output.
- Good for business – Did you know that 67% of consumers across France, Germany and the UK would prefer seeing a recognisable carbon footprint label on products. Furthermore, in France alone, 75% of shoppers would feel better about purchasing from companies who have reduced their carbon footprint.
- Gain the edge – Almost all major companies are now calculating carbon offset. If you want to get up to speed, then getting a carbon footprint measurement is a good place to start. Plus, you can use this as an advertisement if your rival businesses haven’t completed theirs.
- Reduce costs – Any form of waste is bad for business. By calculating your carbon offset, you can analyse and identify areas where you can improve waste management. It is pretty simple, if you reduce waste, you can decrease costs to your business.
- Meeting UK standards – Part of the Companies Act 2006 (Strategic and Directors’ Reports) Regulations 2013, in the UK, it is mandatory for all quoted companies (see below) to report annual greenhouse gas emissions as part of the director’s report.
- Helping the younger generation – Studies have shown that when a carbon footprint calculator has been used, student’ motivation and awareness to improve their carbon lifestyle increased. We all want a healthy planet and to reverse the effects of global warming, so getting the new generation onboard is a bonus.
Is It Mandatory To Calculate Businesses Carbon Footprint?
Some organisations must report their carbon footprint as a requirement. This includes companies such as those listed and many others who decide to report their carbon footprint:
- Companies with an equity share capital listed on the London Stock Exchange
- Companies listed in a European Economic Area
- Companies dealing on the New York Stock Exchange
- Companies dealing on the NASDAQ
What Organisations Calculate Their Carbon Footprint?
Different genres of organisations have their carbon footprint measured, aiming to meet standards and help the environment. It ranges from the biggest companies in the world to up and coming businesses. Of course, some of these company’s must comply with the set requirements, but some use the carbon offset calculator to improve business. The range includes:
- Retailers – Next
- Airports – Gatwick
- Food Manufacturers – ABP Food Group
- Hotels – Millennium & Copthorne
- Insurers – Aviva
- Galleries – The National Gallery
- Universities – University of Kent
- Supermarkets – Sainsbury’s
What Are The Different Types of Environmental Standards?
There are two types of carbon footprinting in business. There is one that measures the overall activities of a business and another looking at a product or service life cycle. These are organisational footprinting standards and product footprinting standards.
| Organisational Footprinting Standards | Product Footprinting Standards |
|---|---|
| ISO 14064-1 – Published in 2006, the ISO 14064 is part of the ISO series of International Standards for environmental management. Provides guidance for requirements and principals when reporting greenhouse gas emissions. Also gives extra guidance for verification, external frameworks for reporting and levels of data. | GHG Protocol Product Lifecycle Accounting and reporting standard – Started in 2011, its objective is to give a general guideline for accounting, plus reporting greenhouse gas emissions for product lifecycles. |
| GHG Protocol Corporate Standard – Emissions accounting tool. Applied globally. Created to assist the demand for consistent approaches in corporate carbon reporting and accounting. Divides the greenhouse gas emissions into 3 scopes.: Scope 1 – Direct emissions Scope 2 – Indirect emissions (heat, steam etc.) Scope 3 – Other indirect emissions | PAS 2050 • Developed by the British Standards Institute, it is internationally recognised as a consistent method of estimating the lifecycle of products greenhouse gas emissions. Compatible with a variety of service and product types. |
| GHG Protocol Value Chain Standard – Gives additional guidance to businesses wanting to measure their entire value chain Scope 3 emissions. Beneficial for companies reporting to the CDP who are required to provide extensive value chain emissions assessments. | ISO 14067 – Created to increase clarity in reporting greenhouse gas emissions throughout the lifecycle of services and products. Produces detailed guidance, which includes direction on verification and product carbon footprint assurance. |
Which Environmental Footprinting Standard Should My Business Use?
This table below will help you to decide on which Environmental Footprinting Standard is best for your business.
| GHG Protocol Corperate Standard | GHG Protocol Value Chain Standard | ISO 14064 | DEFRA 2013 Reporting Guidelines | PAS 2050 | GHG Product Lifecycle Standard | ISO 14067 | |
| Evaluate Scope 1 & 2 emissions | ✓ | ✓ | ✓ | ||||
| Thorough assessment of value chain emissions | ✓ | ||||||
| Detailed organisational structure, measuring substantial data | ✓ | ✓ | |||||
| Basic organisational structure | ✓ | ✓ | |||||
| Emission measure for services or products | ✓ | ✓ | ✓ | ||||
| External communication to interested stakeholders regarding service/product carbon footprint | ✓ | ✓ |
What Is The Average Carbon Footprint?
The averages for carbon footprints differ from country to country. In the UK, the estimate is that the average consumption is 9.5 tonnes per capita. For example, 1 tonne is the equivalent of a flight from New York to Paris, or a diesel car travelling the distance of 3730 miles.
What Should I Do With My Businesses Carbon Footprint Calculations?
After having your businesses carbon footprint calculation, don’t ignore the information. You could use it to benefit both the environment and your company, creating a big win. Of course, the best outcome would be creating reductions in your carbon footprint, especially if you have seen growth in your company.
Next, you should look at ways of reducing it even more, whether that is through products or employees, try and set a plan in place or a timeline of when you want to achieve more reductions. If there is no more room to decrease carbon emissions, research into investing in schemes aimed at capturing similar CO2e emissions elsewhere.
Communicate internally
Communicating your calculations to employees can help to improve further reductions in your company. Employees could get involved and suggest ways of reducing carbon and improving energy management. Also, giving staff an idea of where you started in terms of greenhouse gas emissions and where you want to be could make them more mindful of decisions they make around the workplace.
Informing employees might even help with retention rates, creating a happier workplace and an improved environmentally-aware place to work.
Communicate externally
Communicating your company’s carbon footprint externally shows a concern for the environment and how your business is impacting climate change. Suppliers and other businesses could be more likely to work with you or may have a snowball effect, causing them to also get their carbon footprint calculated.
Getting a certified carbon footprint calculation is a way to add a factor to your company over others on the market. Customers are more likely to shop with a company with intentions on improving the planet over another which does not. It can create customer confidence, plus could create an attraction for more talent to want to work for a company with a green ethos.
The main goal is not to just gain a carbon footprint certificate, but to then use this as a chance to see your impact on the world, creating an incentive to further improve your energy management. It doesn’t just apply to your company, but try to influence other businesses you associate with to follow.