Introduction: The Carbon Footprint, the key step to start decarbonising 🍃
On 18 January 2022, in his letter to CEOs, Larry Fink, the head of BlackRock, sent a relatively clear message to business leaders: "Decarbonize or die."
He is not the only finance executive to sound the alarm on the subject.
This is one of the new paradigms of 2022: from militant environmentalists to traditional capitalism, everyone is now aligned on the fact that decarbonising the economy is a priority issue. Which is very good news!
It is therefore time for companies to commit to decarbonisation!
And the first step in reducing emissions is of course to measure them 📏
But they still need to be measured correctly.
2021, or the emergence of a multitude of carbon footprint actors: Beware of scams 🧐
Many players specialising in carbon assessments emerged in 2021, motivated in particular by the ADEME subsidy dedicated to VSEs and SMEs. This subsidy enabled these companies to carry out an initial assessment, which was largely paid for by the government.
As is always the case when a new market emerges, some unscrupulous players sold discounted services (carbon assessment carried out in just a few hours, based largely on accounting data, etc.). This simplistic methodology allowed them to absorb more clients, and therefore to take maximum advantage of the available subsidies.
To stop this trend, the subsidy was abolished and replaced by the DIAG Décarbon'action, a scheme allowing companies to carry out an initial Carbon Audit by a certified consultant at an attractive cost.
This change of paradigm is a strong signal from ADEME, and highlights the first lesson to be learned when committing to decarbonisation: The quality of the first Carbon Footprint is crucial.
Indeed, how can you know if you have reduced your emissions if your previous Carbon Footprints were totally inaccurate?
This point sums up the new guidelines in place for the 2022 edition of the Carbon Footprint, which we are going to describe below!
Reminder: What are greenhouse gases?
Greenhouse gases (GHGs) are naturally occurring. By trapping the sun's rays, they maintain the temperature necessary for life and thus contribute to the climatic balance of our planet.
Unfortunately, human activity is excessively increasing the concentration of some of these gases. This overproduction of GHGs is the main cause of global warming.
There are many greenhouse gases. A quick look at the most important ones:
- Water vapour (H2O), naturally present in the atmosphere.
- Carbon dioxide (CO2): created naturally by the decomposition of organic matter, but heavily emitted by human activity (due to energy production and deforestation).
--> It is the main gas responsible for global warming.
- Methane (CH4) emitted naturally from decomposing plants and ruminants has also exploded as a result of farming, natural gas consumption and waste treatment.
- Other examples include nitrous oxide (N2O), ozone (O3), hydrofluorocarbon (HFC), perfluorocarbon (PFC) and sulphur hexafluoride (SF6).
Carbon footprint: definition 📖
The Bilan Carbone® is an awareness-raising and diagnostic tool developed byADEME (French Environment and Energy Management Agency) to enable companies to establish their analysis perimeters (see steps 1 & 2), and to collect, analyse and account for their GHG emissions. This tool enables organisations to carry out their greenhouse gas assessment (BEGES).
This assessment makes it possible to prioritise their consumption in order to guide companies in their climate-energy transition process.
The Bilan Carbone® label was created in response to this regulation.
Who is the Bilan Carbone aimed at? Is it mandatory?
For the time being, all organisations employing more than 500 people (250 in the overseas territories), local authorities with more than 50,000 inhabitants and public bodies with more than 250 people are required to carry out a Greenhouse Gas Emission Assessment (BEGES) every three years, in accordance with the Grenelle 2 Law.
Step 1: Define the scope of your company's emissions
Defining emission boundaries is like creating a map that lists energy flows, raw materials, waste and incoming and outgoing products.
There are three different emission scopes within a company that must be taken into account when accounting for GHG emissions.
- The organisational perimeter includes all sites and facilities within your organisation.
- The operational perimeter accounts for the direct and/or indirect emissions due to your company's activities and is divided into three distinct families, called "scopes" 1, 2 & 3 (see STEP 2)
- The temporal scope over an observed period - usually 1 year - allows you to collect the GHG emissions data/figures on which your carbon footprint is based.
Step 2: Define the measurement scopes
In order to facilitate the calculation of GHG emissions (which come from the operational perimeter), these are distinguished into 3 scopes.
Direct emissions
> Scope 1 (company assets) comes from fixed and mobile sources.
It calculates direct emissions linked to the combustion of energy: oil, gas, coal (e.g. heating buildings, driving vehicles, etc.)
E.g. in the case of a logistics company, the emissions from the delivery vehicles owned by the company.
Indirect emissions
> Scope 2 includes CO2 emissions related to electrical energy, the price of which depends on the country's energy mix (building electricity, electric vehicles, etc.)
E.g.: in the case of a restaurant, refrigerant within the refrigerators needed to preserve the products.
> Scope 3 (the most extensive) includes all other emissions that are not associated with the direct manufacture of your products and services. It is itself divided into two categories.
Upstream :
It is linked to the purchase of supplies and services: manufacturing, transport, packaging, etc. These are the emissions linked to suppliers.
(e.g. in the case of a purchase of a metal product, one must take into account: extraction + transformation + assembly + transport)
Downstream :
- operations that include business travel by plane, train, car and direct emissions from subcontractors.
- concerns customers and is related to the use and end of life of the products and services sold.
(e.g. in the case of an LED source: all its emissions related to its use + its end of life)
For example, in the case of a bakery:
- Purchase of flour, butter, etc.
- An employee's journey from home to the company (in this case, the company does not know the exact distance or price of the journey)
What are the advantages for a company to carry out a Carbon Footprint?
1. Improve the company's carbon footprint
A company's Bilan Carbone® provides visibility on its carbon footprint.
In addition to a detailed look at your emitting activities, if you take certain steps, it allows you to find concrete solutions for reducing the most emitting activities.
E.g.: Reduce journeys | Reduce or change energy consumption | Limit waste | Favour a short circuit | Replace certain purchases with others that emit less etc...
2. Engaging employees and improving the employer brand
The involvement of employees and collaborators in a CSR approach allows the company to ensure the application of its reduction actions.
It should also be noted that employees are sensitive to their company's investment in climate issues and its sustainable development approach.
3. Reduce your costs and improve your competitiveness
And yes, reducing your carbon footprint can also mean "saving money"!
The Bilan Carbone highlights certain expenses and allows you to act and/or invest in order to reduce them in the medium term.
How can you do this? For example, by reducing your energy consumption: by switching to low-energy lighting, by changing your working habits (turning off your computer and the light, etc.)
You can also become more competitive as the carbon footprint becomes an increasingly important criterion for purchasing departments. Sometimes it is even a mandatory criterion to be provided in the context of calls for tender.
4. Find funding more easily
The implementation of a carbon strategy attracts and reassures: it enables the defence of a relevant economic model when seeking financing from banks or investors.
Anticipate the sale or development of your business: An already orchestrated carbon accounting system favours exchanges and gives confidence to potential buyers.
5. Communicating with customers
The Carbon Footprint is a way to show your customers, employees and investors that your company is committed to the environment!
For some years now, consumers have preferred products and/or services with an eco-responsible manufacturing process. A communication on your commitments and your CSR approach represents an asset to put forward.
Do not hesitate to share it with your customers, suppliers, partners via the website, social networks etc...
Feel free to read our article on the subject --> https://www.traace.co/post/communication-5-regles-a-suivre-pour-ne-pas-tomber-dans-le-greenwashing
How to calculate a Carbon Footprint?
Each purchase, electricity consumption, travel, etc. results in a quantity of GHG emissions. To carry out the Bilan Carbone, it is necessary to collect data on the company's activities. This data will then be combined with an emission factor - previously provided by ADEME - to calculate its carbon equivalent.
There are two methods for calculating CO2 emissions:
> The first solution - the preferred one - is based on the unit of the product (kg, litre, m2).
It specifies the amount of CO2 per unit of product.
Quantity of GHG = Quantity Consumed x Physical Emission Factor
Ex: 2 kg of beef (quantity consumed) x 38 Kg of CO2 (specific emission factor) = 76 kg CO2
> The second calculation takes into account the monetary factor.
Quantity GHG = Price x Monetary Emission Factor
EX: 35 euros (price of 2kg of beef) x 21.78 (monetary emission factor) = 43.5 g/CO2
It should be noted that ADEME and the ABC currently advise against the use of monetary factors, mainly because they do not make it possible to identify emission reduction levers (apart from buying at a lower price, which sometimes even increases emissions).
Step 3: How to do a Carbon Footprint?
You have 3 options:
1/ You have a person in your company who is trained and certified by the Institut de Formation Carbonecapable of carrying out a Carbon Footprint.
2/ If not, or to complete the beginning of this process, you can choose to call on a consulting firm to facilitate your CSR process (e.g. Utopies or Carbone 4)
These firms are there to plan your entire approach: to diagnose an "inventory", to develop a CSR strategy, to accompany you in its implementation and to help you develop its communication.
3/ SaaS solutions for calculating and monitoring the carbon footprint. In most cases, this is the most economical option in the long term, as it avoids the need to call on consultancy firms too often and reduces the time spent on the subject by internal teams.
Traace is obviously one of these solutions! Thanks to our ultra-precise carbon footprint measurement system and our module allowing companies to build their action plan to reach their trajectory, we have already convinced many well-known players (Sodexo, the French Development Agency, Lenôtre, etc.)
If you would like to know more, do not hesitate to make an appointment to ask us all your questions --> https://www.traace.co/contact
