Impacts, Risks, and Opportunities (IRO) for CSRD Reporting
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In this article, we’ll break down what IROs are, how to identify and assess them, and what CSRD requires in terms of disclosure.
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10 Reasons to Track a Corporate Carbon Footprint
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Today, employees and customers alike want to work and buy from companies that are cognisant of their carbon footprint – with up to 71% of people seeking eco-friendly employers and customers willing to pay a 9.7% sustainability premium, even in the midst of inflation.
In the midst of climate change, growing interest in sustainability, and the push for stronger environmental legislation – more and more companies are starting to take their carbon footprint seriously by making an active effort to measure and reduce their emissions.
However, tracking a corporate carbon footprint can sometimes prove more challenging than a household’s or an individual’s carbon footprint.
In this article, we’ll explain what a corporate carbon footprint is, why it’s important, how it is measured, and reasons why your company should track it too.
What is a corporate carbon footprint?
A Corporate Carbon Footprint, often referred to as (CCF), is the overall amount of GHG emissions that are created either directly or indirectly as a result of a company’s activities.
💡A CCF represents the total environmental impact of a company's endeavors, such as the emissions created from industrialisation, transportation, energy usage, and waste management – all of which are expressed in metric tons of CO₂ equivalent (CO₂e) over a set period of time (usually per year).
“ Many companies working towards carbon neutrality will measure their Corporate Carbon Footprint (CCF) as a first step to better understand their current environmental impact and the most effective ways to mitigate further emissions. ”
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Here are some of the factors that can contribute to a company’s Corporate Carbon Footprint:
- Energy Usage – Companies, regardless if it’s a massive corporation or a small business, often have office buildings, factories, and data storage centers which use electricity, central heating and air conditioning, and more. All of this power usage increases the amount of carbon dioxide emissions emitted by a company.
- Transportation Emissions – Global businesses such as Amazon make use of an extensive transportation network such as via delivery trucks or air cargo services to ensure their packages are delivered on time. While this helps to ensure on time deliveries, many companies fall subject to excess emissions from company vehicles or even unnecessary business travel.
- Supply Chain Emissions – A sustainable supply chain is an essential component to cultivating a greener business, as the production of raw materials and transportation emissions on behalf of suppliers can also contribute to a Corporate Carbon Footprint.
- Waste Management – By nature, companies generate a lot of waste – whether it be from trash, recycling, or burning other waste materials created by the company.
- Water Usage – Don’t think of employees drinking water from the tap or washing their hands at the sink, but the indirect emissions created by needing to treat water for industrial use and other business operations.
- Emissions via Product Life Cycle – Think about buying sunscreen at the store, using it, and then throwing it away. That sunscreen bottle created emissions while it was being produced, while it was being used, and again when it was disposed of – meaning that all companies should take LCA into account when it comes to reducing their Corporate Carbon Footprint (CCF).
👉 Overall, there are several factors that can contribute to a Corporate Carbon Footprint (CCF) – meaning that many companies will need to take a multifaceted approach to effectively measure and reduce their company’s carbon footprint.
Why should companies measure their corporate carbon footprint?
The main reason for a company to measure their Corporate Carbon Footprint is that it can provide a baseline standard not only for companies to better understand their environmental impact and reduce their emissions, but to allow for improved communication and transparency with other businesses and sustainability vessels
💡As measuring and communicating information on a company’s carbon footprint builds greater trust with stakeholders and customers alike, it can also help the business to improve their brand image and boost their chances at becoming a role model in sustainability.
Here are some of the additional benefits for companies that choose to measure their Corporate Carbon Footprint:
| Benefit | Description |
|---|---|
| Identifies Emission Hotspots | Tracking helps pinpoint the main sources of emissions within the company’s operations, such as manufacturing, transportation, or energy use, allowing targeted reduction efforts. |
| Enables Setting of Reduction Targets | Provides a baseline of current emissions, which is essential for setting measurable and achievable carbon reduction goals. |
| Access to Carbon Markets | Enables participation in carbon markets by establishing a verified emission baseline, allowing companies to buy or sell carbon credits and offsets. |
| Regulatory Compliance | Ensures compliance with environmental regulations that require emissions reporting, helping to avoid fines and penalties. |
| Improves Stakeholder Transparency | Enhances transparency with investors, customers, and other stakeholders by demonstrating a commitment to sustainability and climate action. |
| Enhances Corporate Reputation | Positioning as an environmentally responsible company can boost brand image, attract eco-conscious customers, and improve public relations. |
| Drives Operational Efficiency | Identifying emissions often reveals inefficiencies, such as energy wastage, leading to cost-saving opportunities through improved processes and technologies. |
| Facilitates Risk Management | Understanding carbon exposure helps companies manage risks related to carbon pricing, regulation changes, and supply chain disruptions. |
| Unlocks New Revenue Streams | Companies can generate and sell carbon credits through verified reduction projects, creating additional revenue sources. |
| Supports Strategic Planning | Provides data for making informed decisions on investments in sustainability initiatives, such as renewable energy or energy efficiency projects. |
| Increases Investor Confidence | Tracking and reporting emissions align with investor demands for transparency in environmental, social, and governance (ESG) performance, attracting sustainable investments. |
| Promotes Long-Term Sustainability | Helps integrate sustainability into the corporate strategy, supporting long-term business viability and aligning with global climate goals. |
How is a corporate carbon footprint measured?
A Corporate Carbon Footprint (CCF) is measured by data categorisation, collection, and analysis – all of which are meant to help companies reduce their carbon footprint more effectively.
Here are some of the steps taken by companies looking to measure their Corporate Carbon Footprint (CCF):
- Newfound Awareness – No one starts running a marathon if they don’t actually have the desire to start training or eating right to prepare for the event. The same goes for companies looking to understand how they are contributing to climate change, the first step is admitting that “you have a problem”, which in this case – refers to the need to reduce your company’s carbon footprint.
- Determine the Highest Emitting Business Activities – This refers to companies making an effort to categorise their activities and which business endeavors could prove more carbon intensive than others. This is in the same vein of someone trying to lose weight trying to determine the most caloric foods they are eating to facilitate more effective weight loss.
- Collect Information – Data collection is essential for any company looking to better understand their Corporate Carbon Footprint (CCF). This data could include how often the product or service is purchased, re-evaluating current investments in search of more sustainable finance opportunities, or even something as simple as how much energy is consumed at the office.
- Calculating Emissions – Most companies and corporations such as Greenly will make use of emissions factors and then convert the information into understandable GHG emissions data for both companies and third parties to understand the environmental impact of the business.
- Developing an Action Plan – Once all of the data has been collected, companies can then recruit the help of a third party company like Greenly to assess their situation and develop a personalised emission reduction plan. In addition to this, we can help your business communicate your environmental progress to stakeholders and on social media.
Carbon Footprint Measurement Scopes: Explained
If you need a refresher, here’s a breakdown of the various scope emissions that are used to quantify and quality a company’s Corporate Carbon Footprint (CCF):
- Scope 1 Emissions – These are direct emissions from sources owned and governed by the company itself such as company cars or fuel combustion in boilers.
- Scope 2 Emissions – These refer to indirect emissions from purchased energy such as energy consumption in the office.
- Scope 3 Emissions – These are indirect emissions from all other miscellaneous sources, such as supply chain emissions, business travel, waste management, and more.
👉 Companies looking to go above and beyond may even consider measuring their scope 4 emissions – which refer to avoided emissions created outside of a product’s life cycle or value chain.
10 Reasons to Track a Corporate Carbon Footprint
Ultimately, there are several reasons to track a Corporate Carbon Footprint – seeing as it can help companies to comply with environmental legislation, increase transparency and trust with stakeholders, and to improve risk management and brand reputation.
“ Besides the initial cost and time required to track a corporate carbon footprint, there are no downsides for companies that make an effort to better understand their current environmental impact. ”
Here 10 benefits for companies willing to track their Corporate Carbon Footprint:
1. Greater Clarity on Environmental Impact
Taking the time to understand where your company’s emissions originated from can help you to develop a more effective emissions reduction strategy later on.
This can help your company to come up with personalised solutions and incentives to not only get your employees involved in the fight against climate change, but your customers, too.
2. Reduced Operational Costs
Oftentimes, companies are spending more than they need to be in one specific area that also contributes to excess carbon emissions.
💡 This means that tracking a corporate carbon footprint can help offer insight on their supply chain emissions, energy usage, and other business inefficiencies that can be optimised. As a result, these improvements made as a result of carbon footprint data can help the company to reduce their environmental impact.
For instance, companies could discover through corporate carbon footprint tracking that the majority of their emissions are coming from old lighting or electrical equipment in the office – and upgrade these appliances or light fixtures to reduce emissions and in turn also cut down on utility costs.
3. Comply with Various Regulations
These days, it’s becoming increasingly common for companies to follow compulsory environmental protocols – but tracking your corporate carbon footprint can help your company to automatically comply without any additional effort.
This is because many regulations such as the CSRD or the SEC Climate Disclosure Rule will encourage companies to share their carbon footprint, and by tracking your corporate carbon footprint – your company will adhere to these new regulations by default.
4. Improve Brand Reputation
As businesses and consumers alike become more aware of the global threat of climate change, it’s more important than ever before to put your best “green” foot forward and show your commitment to environmental reform.
One of the easiest ways to do that is to be committed to tracking your corporate carbon footprint, as it demonstrates a genuine effort to better understand and reduce your company’s environmental impact.
💡 In turn, this can help to boost brand reputation, increase customer loyalty, and help the business to thrive in the midst of a global movement towards greater sustainability.
5. Attract New Talent & Customers
New studies show that up to two thirds of Gen Z workers would turn down a job if the company didn’t have firm ecological policies in place.
In addition to this, customers are growing more environmentally conscious as well – with 62% of people saying they try to seek out exclusively sustainable products.
Therefore, tracking your corporate carbon footprint is a great way to show to both employees and customers alike that your business takes sustainability seriously.
6. Access to the Carbon Market
A baseline of emissions can help companies understand where they need to reduce emissions, and can provide greater insight to which carbon credits or carbon offsets they should seek.
As a result, companies that track their corporate carbon footprint will have greater access to the carbon market.
7. Improved Risk Management
Tracking your company’s carbon footprint can help to bring potential risks to light and provide the opportunity to fix those risk hazards, such as discrepancies in your supply chain or inefficient project organisation.
👉 As a result, companies could save on energy, fuel prices, and encourage their suppliers to do the same – all of which help to mitigate internal organisational risk while also reducing emissions.
8. Optimise Energy Usage
Tracking your corporate carbon emissions can help reveal which business equipment, cars, office buildings, and more could be revamped or replaced to improve energy efficiency and reduce emissions from outdated technologies.
9. Expand Your Sustainability Network
Making an effort to track your corporate carbon footprint can open doors to use new suppliers or establish new business partnerships that otherwise would never come to fruition if it weren’t for your company’s newfound effort to track its corporate carbon footprint.
Also, tracking your corporate carbon footprint can help your company to gain trust in stakeholders and expand your network in sustainability.
10. Raise Awareness on Corporate Carbon Footprint
Tracking your corporate carbon footprint can help to inspire other businesses and individuals alike to reassess their own environmental impact.
Essentially, demonstrating our self-awareness towards our own ecological challenges can give others the courage to do the same – helping to drive a global movement towards more sustainable business practices.
Overall, there are multiple benefits to tracking a corporate carbon footprint and next to no cons –get started today and see how your company could change for the better
What About Greenly?
If reading this article on 10 reasons to track a corporate carbon footprint has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!
It can be overwhelming to figure out how to effectively reduce your corporate carbon emissions, but don’t worry – Greenly is here to help. Click here to schedule a demo to see how Greenly can help you find ways to ensure your company is complying with all current and future environmental regulations.
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.
Click here to learn more about Greenly and how we can help you reduce your carbon footprint.
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