Learn more about the right approach and methodology when preparing a climate report for your business
Set goals for your business
The first step is to set objectives for the company's climate and sustainability initiatives. This is typically the result of internal discussions among the company's management and employees before the decision to include climate accounting as part of the strategy is made. Climate accounting is an essential part of the company's climate strategy, as it establishes a baseline for the company's current CO2 emissions and thereby enables work towards reduction.
Methodology for climate accounting. Climate accounting: Choose the right approach to measure CO2 emissions
When preparing a carbon footprint for your business, it's crucial to choose the appropriate methodology for measuring CO2 emissions. There are several approaches, each with their own benefits and challenges. Here's an overview of some of the most commonly used methods in climate accounting to help you make the best decision for your business.
Life Cycle Assessment (LCA)
Life CycleAssessment (LCA) is a comprehensive methodology that covers all stages of a product or service's life cycle - from production and distribution to use and end-of-life. LCA provides an in-depth and holistic assessment of the CO2 emissions associated with the product or service. It also identifies "hotspots", i.e. the phases that contribute the most to emissions.
Benefits: LCA provides a comprehensive overview of the entire life cycle and is suitable for complex products and services.
Challenges: LCA requires extensive data collection and analytical resources, which can be time-consuming and costly for smaller businesses.
Greenhouse Gas Protocol (GHG Protocol)
The GHGProtocol is a well-known and standardized method for measuring CO2 emissions. It divides emissions into three scopes - Scope 1, Scope 2 and Scope 3 - to assess both direct and indirect impacts. Scope 1 covers direct emissions from the company's own sources, Scope 2 covers indirect emissions from purchased energy sources, and Scope 3 covers other indirect emissions, such as transportation and supply chains.
Benefits: The GHG Protocol is easy to understand and implement and enables a comprehensive assessment of a company's impact.
Challenges: The GHG Protocol may underestimate certain emissions and may be less accurate in complex scenarios.
The ISO 14064 standard
ISO 14064 is an international standard that establishes principles and requirements for quantifying and reporting organizational emissions. It offers a comprehensive framework for climate accounting, building on both GHG Protocol and LCA methodologies.
Benefits: ISO 14064 provides a credible and internationally recognized framework for climate accounting.
Challenges: Implementing ISO 14064 requires thorough training and guidance for proper application.
Using Carbon Accounting Software
Carbon Accounting Software is specialized software that automates data measurement and calculations for climate accounting. It can help optimize the process and minimize errors.
Benefits: Carbon Accounting Software makes data measurement and reporting more efficient and accurate.
Challenges: The cost of implementing and maintaining the software can be a barrier for smaller businesses.
When choosing a methodology for your climate accounting, it's important to consider the size, complexity and resource capacity of your business. Whichever methodology you choose, an accurate and reliable carbon footprint will give your business a solid foundation to make informed decisions and work towards reducing its climate impact.
Many companies quickly face a significant amount of unforeseen work when they start quantifying the CO2 emissions from all of their processes - even when they've hired an expert consultant to do the calculations.
The calculation of CO2 emissions requires those responsible for the process to collect data from all of the company's processes. This typically involves involving a number of different people within the company to gather figures on everything from energy consumption and canteen food to the production and purchase of office supplies.
Consumption-based and activity-based emissions
When we at Climaider help companies calculate their CO2 emissions, we start by creating a comprehensive overview of all of the company's emissions. To gain this insight, we start by analyzing the company's consumption-based data. However, this can be a challenging start for many companies.
Automated data collection
Climaider has developed integrations that enable direct collection of consumption data in our Sustainability Management Platform. This means that in just minutes we can establish a carbon baseline, identify emissions hotspots and ensure we include all relevant upstream data. From there, we can work with you to refine the data for the most significant emissions categories. This feature alone saves project managers, ESG managers and other stakeholders many hours of challenging work.
Once we have an understanding of the company's overall carbon footprint, the next natural step is to refine the data for the categories where the company emits the most CO2.
For some companies, it may be categories such as production and energy consumption, while for others it may be transportation and website operations. The choice depends entirely on the activities and nature of the business. For this reason, going beyond just consumption-based data is crucial for the integrity of the carbon calculation. The more precise information that is relevant to add to the calculations, the deeper into the value chain you need to look.