What are the 3 Pillars of Corporate Sustainability?
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What are the 3 pillars of corporate sustainability and why are they important?
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What is CO2e (CO2 equivalent)?
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CO2e, or carbon dioxide equivalent, is a standardised unit used to measure the climate impact of various greenhouse gases. While carbon dioxide (CO2) is the most commonly referenced greenhouse gas, it’s not the only one contributing to global warming. Other gases, such as methane (CH4) and nitrous oxide (N2O), have a much higher warming potential than CO2, making it difficult to compare their effects on the climate. CO2e solves this by providing a way to express the impact of different greenhouse gases using a single, comparable metric.
Whether you’re reading a corporate sustainability report, assessing your personal carbon footprint, or reviewing climate policy targets, you’re likely to encounter CO2e. But how exactly is it calculated, and why is it such a crucial tool in the fight against climate change?
👉 In this article, we'll explore what CO2e is, how it’s calculated, and why it plays a key role in emissions reporting and sustainability efforts.
What is CO2e?
CO2e, or carbon dioxide equivalent, is a metric used to standardise the measurement of greenhouse gas emissions. It provides a common unit that allows different gases to be compared based on their global warming potential (GWP). This standardisation makes it easier to assess the overall climate impact of various activities, products, or even entire organisations.
At its core, CO2e reflects the amount of carbon dioxide (CO2) that would create the same level of global warming as the measured greenhouse gas emissions. Since different gases have varying heat-trapping abilities and atmospheric lifespans, CO2e simplifies these differences into a single, comparable figure.
For example, methane (CH4) is far more potent than CO2 in the short term, with a GWP over 80 times higher over a 20-year period. Nitrous oxide (N2O) is also significantly more powerful, with a GWP around 273 times greater over a century. CO2e helps balance these variations by converting emissions of different gases into the equivalent amount of CO2 emissions.
By using CO2e, businesses, policymakers, and individuals can more accurately assess the climate impact of their activities, track progress toward sustainability goals, and make informed decisions on emissions reduction strategies.
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Why was CO2e developed?
CO2e was developed to address the challenge of comparing the climate impact of different greenhouse gases. While carbon dioxide (CO2) is the most prevalent greenhouse gas, other gases like methane (CH4) and nitrous oxide (N2O) have significantly higher global warming potentials (GWP) despite being emitted in smaller quantities. Without a standardised measurement system, it would be difficult to assess the combined climate impact of multiple gases or compare emissions across industries and regions.
The concept of CO2e was introduced to simplify climate accounting by expressing all greenhouse gas emissions using a single, comparable metric based on their global warming potential. The GWP of a gas measures how much heat it traps in the atmosphere over a specified period, typically 100 years, compared to carbon dioxide. For example, methane has a GWP of around 80 over 20 years, while carbon dioxide has a GWP of 1, making CO2 the baseline for comparison.
CO2e plays a critical role in:
- Global climate agreements: CO2e is used in frameworks like the Paris Agreement to set emissions reduction targets for countries.
- Sustainability reporting: Companies use CO2e to disclose their carbon footprints and track progress toward emissions reduction goals.
- Policy and regulation: Environmental regulations often use CO2e to define reporting requirements and thresholds for emissions limits.
“ By providing a standardised way to compare emissions from all greenhouse gases, CO2e has become a foundational tool for climate action, enabling more consistent reporting, target-setting, and accountability across sectors. ”
How is CO2e calculated?
CO2e is calculated by multiplying the quantity of a greenhouse gas emitted by its global warming potential (GWP). This formula allows different greenhouse gases to be expressed in terms of their equivalent impact compared to carbon dioxide.
The basic formula for CO2e calculation:
CO2e = Quantity of GHG emitted (kg) × GWP of the gas
What is Global Warming Potential (GWP)?
GWP is a measure of how much heat a greenhouse gas traps in the atmosphere compared to carbon dioxide over a specific time period, typically 100 years. CO2 has a GWP of 1, serving as the baseline, while other gases have higher values due to their greater heat-trapping abilities.
For example:
- Carbon dioxide (CO2) – GWP of 1
- Methane (CH4) – GWP of 28-80 (depending on the timeframe)
- Nitrous oxide (N2O) – GWP of 273
Example of CO2e calculation:
Imagine a company emits the following greenhouse gases:
- 1,000 kg of CO2
- 100 kg of methane (CH4)
- 50 kg of nitrous oxide (N2O)
Step 1: Convert each gas using its GWP (based on a 100-year period):
- CO2: 1,000 × 1 = 1,000 kg CO2e
- CH4: 100 × 28 = 2,800 kg CO2e
- N2O: 50 × 273 = 13,650 kg CO2e
Step 2: Add the results together:
1,000 + 2,800 + 13,650 = 17,450 kg CO2e
This total represents the combined climate impact of all the gases emitted, expressed as a single figure in CO2e.
Why accurate CO2e calculations matter:
- Consistency: CO2e ensures emissions from different gases are reported consistently.
- Comparability: Companies and countries can compare emissions using a standard metric.
- Transparency: Enables clearer climate impact assessments and target setting.
By standardising the way emissions are measured, CO2e makes it easier for businesses and policymakers to identify which activities have the greatest climate impact and where efforts should be focused for reduction.
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CO2e and different greenhouse gases
CO2e provides a standardised way to compare the climate impact of various greenhouse gases based on their global warming potential (GWP). While carbon dioxide (CO2) is the most commonly emitted greenhouse gas, there are others that contribute significantly to global warming and are factored into CO2e calculations.
| Greenhouse Gas | Global Warming Potential (GWP) | Primary Sources |
|---|---|---|
| Carbon dioxide (CO2) | 1 (baseline) | Burning fossil fuels, deforestation, industry |
| Methane (CH4) | 28-80 | Agriculture (livestock), landfill, gas leaks |
| Nitrous oxide (N2O) | 273 | Fertiliser use, industrial activities, fuels |
| Hydrofluorocarbons (HFCs) | Up to 12,400 | Refrigeration, air conditioning |
| Perfluorocarbons (PFCs) | Up to 12,200 | Aluminium production, semiconductor manufacturing |
| Sulfur hexafluoride (SF6) | 25,200 | Electrical insulation, magnesium processing |
| Nitrogen trifluoride (NF3) | 17,200 | Semiconductor manufacturing |
Why include multiple gases in CO2e calculations?
Each greenhouse gas varies in its ability to trap heat and its lifespan in the atmosphere. For example:
- Methane traps far more heat than CO2 but breaks down faster.
- Fluorinated gases can persist for thousands of years with extreme warming potential.
By converting all greenhouse gases into a single CO2e figure, climate impact assessments become more consistent and comparable, helping businesses and policymakers set clearer reduction targets and track progress.
The benefits of calculating CO2e
CO2e plays a critical role in measuring and managing greenhouse gas emissions, making it a cornerstone of global climate action efforts. By providing a standardised metric, it allows businesses, policymakers, and individuals to assess and compare the climate impact of different activities, products, and industries more effectively.
Here’s why CO2e is so essential:
- Consistency in reporting: CO2e standardises emissions data, ensuring consistency across industries and regions. This uniformity simplifies the comparison of emissions from different sources, whether it’s energy use, manufacturing, or supply chain activities.
- Simplification of complex climate data: Greenhouse gases differ in their heat-trapping abilities and atmospheric lifespans. CO2e simplifies this complexity by converting emissions into a single figure based on global warming potential (GWP), making climate data easier to interpret.
- Informed decision-making: With CO2e as a benchmark, companies and governments can make more informed decisions about emissions reduction strategies. This data enables organisations to identify high-impact areas, set reduction targets, and monitor progress more effectively.
- Compliance and regulation: Many climate policies and frameworks, including the Paris Agreement and Science-Based Targets initiative (SBTi), use CO2e to define reduction goals and reporting requirements. Companies often need to disclose their CO2e emissions to comply with regulations and sustainability standards.
- Accountability and transparency: By using CO2e, businesses can provide clearer information to stakeholders about their environmental impact. Transparent reporting builds trust with investors, customers, and regulators while holding organisations accountable for their climate commitments.
- Tracking global climate progress: On a global scale, CO2e helps countries assess their progress toward emissions reduction goals. It plays a fundamental role in international climate agreements, enabling global emissions to be tracked and compared.
Limitations of CO2e
While CO2e is a widely used metric for standardising greenhouse gas emissions, it has several limitations that can affect how climate impact is measured and understood. Recognising these limitations is essential for ensuring emissions data is used responsibly and interpreted accurately.
1. Oversimplification of climate impact
CO2e reduces the complexity of multiple greenhouse gases into a single figure, which can sometimes oversimplify the true environmental impact. Different gases behave differently in the atmosphere; some trap heat more effectively but for shorter durations, while others persist for centuries. For example:
- Methane (CH4) is extremely potent in the short term but breaks down faster than CO2.
- CO2 has a lower GWP but remains in the atmosphere for much longer.
This reduction into a single metric can obscure the varying timelines and effects of different gases.
2. Uncertainty in Global Warming Potential (GWP) estimates
The GWP values used in CO2e calculations are based on scientific models, which can change over time as climate science evolves. For example, methane’s GWP can differ depending on whether a 20-year or 100-year timescale is used, leading to variations in reported CO2e values.
3. Timeframe sensitivity
CO2e calculations are typically based on a 100-year GWP timeframe, which may not accurately reflect the short-term climate effects of potent gases like methane. This can lead to an underestimation of the immediate impact of some emissions, especially in regions focused on short-term climate action.
4. Potential for misuse in offsetting claims
CO2e is often used in carbon offsetting and neutrality claims, which can be misleading. Since CO2e aggregates all greenhouse gases into a single figure, companies may focus on balancing emissions through offsetting rather than prioritising direct reductions. As a result, some offsetting strategies may give a false impression of climate progress.
5. Exclusion of non-GHG climate impacts
CO2e focuses only on greenhouse gases and excludes other climate-impacting factors such as land use changes, deforestation, and aerosol pollution, which can also influence global temperatures.
Key takeaway:
While CO2e is a valuable tool for standardising emissions reporting, it should be used alongside more comprehensive climate assessments. Acknowledging its limitations helps ensure the metric supports genuine emissions reductions rather than acting as a simplified climate accounting shortcut.
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How Greenly can help your company
Greenly offers expert carbon management solutions to help businesses accurately measure, analyse, and reduce their CO2e emissions, supporting a more sustainable future.
Our services include:
- Comprehensive emissions tracking: Our platform monitors Scope 1, 2, and 3 emissions, ensuring businesses have a full understanding of their carbon footprint.
- Life Cycle Assessments (LCAs): We conduct detailed LCAs to assess the CO2e impact of products and services throughout their lifecycle.
- Data-driven insights: Our software identifies high-emission areas and provides data-backed recommendations for reduction strategies.
- Decarbonisation support: We help businesses develop tailored action plans to reduce emissions, improve supply chain sustainability, and set achievable reduction targets aligned with science-based goals.
- Regulatory compliance: Greenly assists companies in navigating complex climate regulations by providing accurate CO2e reporting and sustainability disclosures.
By offering transparent emissions data and actionable insights, Greenly empowers businesses to make informed decisions that contribute meaningfully to global sustainability efforts. Get in touch with us today to find out more.
Sources
- Environmental Defence Fund, Methane: A crucial opportunity in the climate fight, https://www.edf.org/climate/methane-crucial-opportunity-climate-fight#:~:text=Methane%20is%20a%20potent%20greenhouse,warming%20in%20the%20near%20term
- United States Environmental Protection Agency, Understanding Global Warming Potentials, https://www.epa.gov/ghgemissions/understanding-global-warming-potentials#:~:text=Nitrous%20Oxide%20(N2O,Sinks%20uses%20a%20different%20value.)
- United States Environmental Protection Agency, Understanding Global Warming Potentials, https://www.epa.gov/ghgemissions/understanding-global-warming-potentials#:~:text=CO2%2C%20by%20definition%2C%20has,will%20last%20thousands%20of%20years.
- Eurostat, Glossary:Carbon dioxide equivalent, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Carbon_dioxide_equivalent
- European Commission, Methane Emissions, https://energy.ec.europa.eu/topics/carbon-management-and-fossil-fuels/methane-emissions_en
- United States Environmental Protection Agency, Overview of Greenhouse Gases, https://www.epa.gov/ghgemissions/overview-greenhouse-gases#:~:text=In%20general%2C%20fluorinated%20gases%20are,nitrogen%20trifluoride%20(NF3).
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