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 is made to include climate accounting as part of the strategy. The carbon footprint is an essential part of the company's climate strategy as it establishes a baseline of the company's current CO2 emissions and thereby enables the work towards reduction.
Choice of methodology for climate accounting. Climate accounting: Choose the right approach to measure CO2 emissions
When preparing a carbon footprint for your business, choosing the appropriate method for measuring CO2 emissions is crucial. There are several approaches, each with their own benefits and challenges. Here is an overview of some of the most commonly used methods in carbon accounting to help you make the best decision for your business.
Life Cycle Assessment (LCA)
Life Cycle Assessment(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 companies.
Greenhouse Gas Protocol (GHG Protocol)
The GHGProtocol is a well-known and standardized method for measuring CO2 emissions. It divides emissions into three areas - 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 the company's impact.
Challenges: The GHG Protocol can underestimate certain emissions and can 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 based on both GHG Protocol and LCA methods.
Benefits: ISO 14064 provides a credible and internationally recognized framework for climate accounting.
Challenges: Implementing ISO 14064 requires thorough training and guidance for proper use.
Using Carbon Accounting Software
Carbon Accounting Software is specialized software that automates data measurement and calculations for carbon 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 method 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.
Data collection
Many companies quickly face a significant amount of unforeseen work when they set out to quantify the CO2 emissions from all their processes - even when they have hired an expert consultant to do the calculations.
Calculating CO2 emissions requires those responsible for the process to collect data from all company 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 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 a few minutes we can establish a CO2 baseline, identify emission hotspots and ensure we include all relevant upstream data. From here, we can work with you to refine the data for the most significant emission categories. This feature alone saves project managers, ESG managers and other stakeholders hours of challenging work.
Upgrading data
Once we understand 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, it is crucial for the integrity of the carbon calculation to go beyond just consumption-based data. The more precise information that is relevant to add to the calculations, the deeper into the value chain you need to look.
