For a company, implementing a carbon trajectory is an ambitious but necessary project. Necessary for several reasons. Not only to contribute to the fight against global warming and its consequences, but also to ensure the long-term viability of the organization.
Because the consequences of global warming will inevitably have an impact on its business, and this is one of the reasons why investors today, like consumers, are paying close attention to companies' ESG indicators and decarbonization targets.
Added to this are regulatory obligations, such as the CSRD, which will force European companies to be transparent about these data and targets, and the CSDDD, which will soon require the implementation and pursuit of a decarbonization trajectory.
However, embarking on a carbon project is complex, and there are a number of pitfalls to be avoided. Here are the 10 most common mistakes.
1- Not integrating governance into the project
The first and relatively common mistake is to underestimate the importance of the carbon project. However, new regulatory requirements tend to put the carbon file at the top of the pile.
Your carbon project needs to directly involve your company's management. Why should it? A carbon project requires the involvement of all your internal and external stakeholders. When management is in charge of the project, it sends a clear message about the importance it attaches to it, and facilitates the mobilization of all the players who will have to contribute to it. Moreover, it is directly concerned by the results of your carbon strategy. Consumers and investors are particularly demanding when it comes to companies' environmental policies. A carbon project therefore has a major impact on a company's sustainability and growth prospects.
Tennaxia's latest survey on companies' level of preparation for CSRD shows that 89% of companies surveyed have included a member of the CODIR, COMEX or Board of Directors in their project team dedicated to this new extra-financial reporting format.
2- Not structuring your data in advance
Don't go looking for data without first structuring it. Ask yourself the right questions. How do I want to analyze this data? Which data do I need? Where is it located? Who has it?
It's crucial to model your organization before you start collecting data, forexample, by listing all your offices and production sites, and classifying them by activity and/or country.
In addition to modeling your organization, you can create a category tree that gives you a granular view of your data. This then enables you to take precise action on the emissions identified.
For example, energy consumption in your French and German factories will not have the same carbon impact, due to the differences in the energy mix between the two countries. You therefore need to enter this data in different categories so that you can then apply the appropriate emission factor and act effectively (and probably differently) on these two sources of GHG emissions. The same applies to the purchase of raw materials: if, for example, you consume both new and recycled materials, the emission factor applied will be different. You therefore need different categories for these two sources of supply.
3- Forgetting to involve your stakeholders
Employees, suppliers... A carbon project, even if led by a dedicated person or team, requires the involvement of everyone in the company. Both internal and external stakeholders. This applies both to the data collection required to measure your company's carbon footprint, and to the implementation of decarbonization actions.
The role of the person in charge of the project is to mobilize the players who will have a role to play in the decarbonization trajectory. Often very operational, it will be necessary to be pedagogical from the outset of the project, to explain why it is important, what its objectives are and why their contribution is necessary.
Not only is this stage necessary for the effective implementation of your carbon project, but it will also enable you to make it more effective by benefiting from the feedback and observations of those directly involved in the field.
4 - Neglecting the reliability of collected data
The data you collect in your carbon footprint platform will subsequently enable you to measure your footprint. For this to be usable, the data must be of high quality.
Whenever possible, always use physical data rather than monetary data. The latter is more accurate, and can be re-analyzed later in the event of changes in the emission factor, for better year-on-year comparability, and is unlikely to be distorted by economic fluctuations such as inflation.
Extrapolating data can also present a risk. Often considered a simple solution when precise data is difficult to obtain, generalizing extrapolations can totally distort the results of your carbon project.
5- Ignoring scope 3
If done properly, the modeling of your organization and the category tree carried out prior to data collection should give you a comprehensive view of the data you need to collect to measure your carbon footprint, at least for scopes 1 and 2.
However, don't think that your emissions stop at your company's door. Measuring Scope 3 emissions is crucial. This corresponds to the emissions of your value chain, i.e. all the indirect emissions (upstream and downstream) of your activities. Goods transport, raw materials production, waste management... all activities that generate greenhouse gas emissions for which you are responsible.
Measuring scope 3 is all the more important as it often accounts for the vast majority of a company's CO2 emissions - 92% on average, according to the CDP.
Taking into account the emissions generated by your value chain has also become a requirement in the majority of international non-financial reporting standards. So take scopes 1, 2 and 3 into account.
6- Not anticipating the repeatability of the exercise and the comparability of results
Measuring your levels of greenhouse gas emissions is only of interest if you subsequently wish to act on them and set yourself a carbon trajectory. You therefore need to make sure that you do everything possible to ensure the repeatability of the exercise year after year, and above all the comparability of the results.
These principles are essential to be able to set GHG emissions reduction targets over long periods. This requires a clear vision of the category tree that models your organization, and of the level of granularity of the data you wish to collect, so that you can then act on the various emission items.
7 - Getting started without defining the right methodology
There are various methods for measuring your carbon footprint. Depending on your challenges and obligations, you need to choose the one best suited to your model. These include the Bilan Carbone method promoted by ADEME, the ISO 14064 STANDARD or the GHG Protocol. These internationally recognized carbon accounting methodologies enable you to comply with the main non-financial reporting standards.
Keep in mind the need for repeatability and comparability of your carbon footprint measurements. Changing measurement methods from one year to the next can prevent you from comparing your results, and ultimately from accurately measuring the results of your carbon trajectory.
8 - Setting unrealistic goals
Setting over-ambitious targets, and even worse, communicating about them, can only damage your image and credibility with your stakeholders. Don't fall into the trap of Greenwashing. Be pragmatic. Committing to a decarbonization plan inevitably requires investment. You need to take into account the operational feasibility of the actions you wish to take, their costs, their amortization and their long-term profitability.
Tools such as Traace's Reduce module can help you build your carbon trajectory, estimate the results of your actions on your carbon footprint and model their cost. Methodologies, such as SBTi, can help you set targets based on a scientific approach.
9 - Don't set a precise timetable
Well-defined objectives must be set within a clear timeframe. Without a timetable, it's tempting to keep putting things off until later, while too short a timeframe can prevent you from mobilizing the necessary human and financial resources, and could even put your business in difficulty.
The EU, for example, aims to reduce its emissions by 55% by 2030 and achieve carbon neutrality by 2050. This timeframe, which is in line with the Paris Agreements, is the one on which many economic and financial players now agree.
10 - Confusing carbon contribution with carbon offsetting
In recent years, many companies have been tempted to integrate offsetting mechanisms into their carbon trajectories. Offsetting is far too nebulous a notion to be taken into account in a serious carbon trajectory. It suggests that, under the guise of planting trees, you can maintain your CO2 emission levels.
Far from denigrating the holders of projects generating carbon credits,carbon professionals prefer to speak of contribution rather than compensation. Acquiring carbon credits is considered a "bonus". You are helping to combat global warming by investing in the development of carbon sinks, but this must be uncorrelated with the emissions generated by your activities.
From a strictly regulatory point of view, most non-financial reporting standards do not take into account the acquisition of carbon credits when measuring a company's GHG emissions. These may be cited, but in separate categories so as not to confuse a company's emissions with its efforts to contribute.
Conclusion
A successful carbon project requires anticipation, rigor and the involvement of all stakeholders. Avoiding common mistakes, such as poor governance, inaccurate data collection or poorly calibrated objectives, is crucial to building a solid, sustainable carbon strategy. By using the right methodology and setting realistic targets, companies can not only meet regulatory requirements, but also actively contribute to the fight against global warming, while strengthening their long-term viability.
