5 reasons why do we measure carbon footprint

Carbon footprint is a new black, or rather old black that will help you become green. In our article, at glance you will find out what is a carbon footprint and why you or you company should care.

What is a carbon footprint?

Climate change results from both natural and anthropogenic activity. Anthropogonic factors, including combustion of fossil fuels, food industry, pharmaceuticals, production and usage of solvents, land, air and water transport, or utilisation of waste, are currently the biggest environmental issues, as they generate greenhouse gas (GHG) emissions, among other things, thus contributing to global warming. Numerous initiatives aimed at the reduction of GHG emissions and monitoring of environmental changes are being currently executed. The carbon footprint is one of the ways to report them.

The term “carbon footprint” refers to the total amount of direct and indirect GHG emissions over a full life cycle of a product, company or even city. It is expressed as carbon dioxide equivalent (eCO2). Just as the water footprint, the carbon footprint constitutes an element of the ecological footprint, which serves as a tool to evaluate the impact of a particular factor on the environment. The average carbon footprint per one Pole is about 10 tonnes of CO2 a year.

Why do we measure carbon footprints?

Many state and private institutions decide to calculate their carbon footprint for different reasons. One of them is the fact that the carbon footprint is an important indicator of market competitiveness and, more importantly, the numerous legal changes and new guidelines that are being introduced in terms of environmental protection will soon result in an indirect reporting obligation for companies. There are many different methods for calculating the carbon footprint, whereas the most frequently used are international standards, e.g. The Greenhouse Gas Protocol.

1. Transparency of pro-environmental activities – no greenwashing
Data helps you to understand the impact your organization has on climate along the value chain. It builds also a business case to track the efforts for less harmful solutions and products.

2. Management
We can only reduce negative environmental impacts by knowing what our starting point is. Knowing where the most emissions are generated in the value chain makes it easier for us to make decisions – all in line with the idea that ‘if we don’t measure something, we don’t manage it’.

3. Address consumers’ needs
Consumers’ growing awareness translates into their alternative choices, some pioneers already display CO2e values on their products, e.g. Oatly. Due to the regulatory and consumer pression, it cannot be excluded that with time we will find products’ carbon footprint on the packaging right next to their nutritional value or information on packaging components.

4. Response to market needs
The pressure to reduce GHG emissions further results in the increasing meticulousness of reporting, also in terms of Scope 3 emissions.

Scope 3 emissions are already included in the SFDR (Sustainable Finance Disclosure Regulation) or GRI requirements, and it is highly likely that they will be mandated by the Corporate Sustainability Reporting Directive (from 2023).

However, in order for companies and financial institutions to be able to report Scope 3 emissions, they must first obtain information from their subcontractors and the entities they invest in.

Everyone who has tried to tackle Scope 3 emissions knows that the task is way more complex than it might seem after reading the regulatory standards. It especially affects global companies with extensive supply chains – wanting to avoid too many generalizations or striving to improve the quality of reporting, they more and more often expand their rules of ordering from subcontractors with information on the carbon footprint of offered products.

5. Future financial benefits

The rules of taxonomy, the Green Deal and funds dedicated to the recovery of the economy after Covid-19 are combined with the efforts towards the green economy transition. The changes are clearly heading in the direction of rewards and different financial incentives for documented, more eco-friendly solutions.

Calculation and data acquisition

Greenhouse gas emissions are classified and measured in three scopes – 1, 2 and 3. Scope 1 emissions are direct GHG emissions associated with fuel combustion at sources that are controlled or owned by an organization. Scope 2 emissions are indirect GHG emissions resulting from the generation of electricity, steam, heat, or cooling. Scope 3 emissions are more complex as they include indirect emissions that are not controlled by the reporting organization within its added value chain. They can be classified as upstream or downstream. Upstream emissions are the emissions related to purchased raw materials and services, capital goods, waste and business travel, whereas downstream emissions are associated with processing, use and the end-of-life treatment of sold products or franchises.

The scopes and their categories have been generally adopted by The Greenhouse Gas Protocol and do not refer directly to every company. Some of these processes can be non-existent in a particular organization or so small that they only contain traces of eCO2, which will not contribute significantly to the final carbon footprint result

Calculating the carbon footprint is the first step that every company can take to identify its impact on the environment. Moreover, businesses should set their reduction goals, specify the execution deadlines, and engage their value chain partners. The growing involvement of different companies brings us closer to achieving a reduction of GHG emissions by 80-95% by 2050, as planned by the European Union.

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Marta Lesiewska

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