Everything you need to know about Corporate Carbon Footprint

Everything you need to know about Corporate Carbon Footprint

Are you interested in carrying out a carbon assessment for your company, but don't have a clear idea of how to go about it, or how much it would cost? This article summarizes what you need to know on the subject.

Thomas Guyot

Thomas Guyot

Co-founder

Update :
7/12/2023
Publication:
23/3/2021

What does a Bilan Carbone Entreprise involve?

A company's carbon footprint reflects the quantity of greenhouse gases (GHGs) generated by its activities. For simplicity's sake, we usually reduce these GHGs to carbon dioxide (CO2), but there are many different types. Methane (CH4), nitrous oxide (N2O) and so on.

A carbon footprint is a diagnostic tool that measures your company's greenhouse gas emissions, both direct and indirect. Data collection, measurement, analysis and reporting on a company's CO2 emissions are generally carried out on a yearly basis.

The term Bilan Carbone® is a registered trademark that designates a certain carbon accounting methodology. Today, there are a number of different standards and methodologies for measuring the carbon footprint of companies, which are nonetheless tending to harmonize. The Bilan Carbone® methodology is a tool developed and made available by the Association pour la Transition Bas Carbone (ABC).

How are greenhouse gas emissions calculated in a Bilan Carbone Entreprise?

The principle of carbon footprint calculation is relatively simple in theory, but potentially tedious in practice:

We list the activities induced by the company: heating premises, purchasing raw materials, machining objects, transporting employees, etc. Each of these activities is generally referred to as an "emission item". Each of the activities induced by the company generally constitutes what are known as "emission stations".

  1. We collect the associated raw "activity data": energy consumption, quantities purchased, kilometers traveled, etc.
  2. These raw activity data, each with different units of measurement, are multiplied by a conversion factor to express their impact in terms of carbon emissions. These conversion factors are called "Emission Factors".

For example, to calculate emissions linked to our own electricity consumption, we can multiply a raw data figure "number of kWh of electricity consumed" by an emission factor "weight of CO2 emitted per 1kwH of electricity".

However,the granularity of the raw data and the emission factor must be adapted to the size of the emission item. In our example, it would be more interesting to multiply the "number of kWh per electricity source" by the emission factor associated with each of these electricity sources (nuclear, gas, coal, photovoltaic, etc.).

This granularity is essential to provide actionable levers that will be reflected in the company's future carbon footprint (e.g. increasing the proportion of electricity from low-emission sources), and to pragmatically define the data to be collected.

  1. All emissions are then consolidated into a single unit. Emissions of the various gases are converted into "CO2 equivalent" (CO2e) to provide a universal unit of measurement (in the same way as we would consolidate $ into €).

For analysis purposes, the various sources of emissions are generally classified into categories grouped into three scopes.

What emissions are included in a company's Bilan Carbone?

As we've already mentioned, various greenhouse gases are taken into account when drawing up a Bilan Carbone: CO2, N2O, CH4, SF6, HFCs, PFCs and so on. The Bilan Carbone, like most other standards and methodologies for measuring direct and indirect emissions, is based on the study of 3 perimeters called "Scope", which will enable you to make a calculation and discover which are the most energy-intensive within your company:

  • ‍Scope 1 has the narrowest scope. It covers direct emissions linked to the consumption of fuels such as petrol, but also emissions from your buildings, fixed equipment and biomass.
  • Scope 2 covers indirect emissions linked to the energy consumption of your production process in the form of heat, cold, steam and electricity.
  • Scope 3 focuses on other greenhouse gas emissions that are not part of your product's production process, such as the supply of raw materials, downstream transport of goods or even the use of your product!

The way in which the different categories of emissions are taken into account varies according to the different carbon accounting standards in use today: Bilan Carbone, GHG Protocol, Bilan GES réglementaire, GRI 305, ISO 14064, etc...

To find out more about the differences between these methodologies, read our blog post on the subject.

Given the wide range of carbon accounting methods available, there is an urgent need for carbon accounting to meet requirements comparable to those of financial accounting.

‍Traaceanticipates and applies to its carbon balances the main principles of reliable and fair carbon accounting: completeness of scope (no half-measures), continuity of methods (evolutions only to bring precision), non-compensation (induced, avoided and financed emissions clearly identified).

Description of three scopes of carbon emissions

Is Bilan Carbone a simple measurement exercise?

A Bilan Carbone® must produce at least 2 deliverables:

  • Measuring the company's carbon footprint.

This is the exercise of accounting for emissions, divided into significant items. In most cases, these figures are accompanied by ratios adapted to the company's activity and size - essential for decoupling the evolution of the carbon footprint from the company's growth.

  • The plan to reduce emissions induced by the company's activities.

Hence the importance of having sufficiently precise information on the most significant emission blocks in order to define actionable levers, the results of which can be measured. These levers must then be monitored by the managers of the divisions concerned, to ensure that they are being implemented, and to make any necessary adjustments.

Traace provides "experts on demand" to find new ways of reducing induced emissions to meet the company's objectives.

Why carry out a corporate carbon assessment?

Carrying out a Bilan Carbone company is a necessary first step, to be repeated annually, as part of a serious commitment to measuring a company's environmental impact. It's the first step because, while it focuses on CO2 emissions, it does not, for example, include measurement of the environmental impact on biodiversity or water resources.

A Bilan Carbone enables you to analyze your company's main sources of GHG emissions, and thus identify the action levers to be activated with a view to reducing greenhouse gas emissions.

The reasons for carrying out a Bilan Carbone and initiating a low-carbon transition can be manifold: legal obligation, improving brand image, optimizing expenses, anticipating the impact of future climate crises, investor relations, etc.

In France, the completion and publication of a Bilan Carbone on the ADEME website is a legal obligation for certain companies, in particular all those with over 500 employees. Under the CSRD, which comes into force on January 1, 2024, more than 50,000 companies with over 250 employees will be required, among other things, to carry out an annual carbon audit of their entire value chain and implement an emissions reduction strategy.

On the consumer side, as new generations are increasingly concerned about their environment and consumption, transparency about your ecological footprint can translate into a real competitive advantage for your company by improving its brand image.

Internally, mobilizing all your employees in the achievement of carbon emission reduction targets creates a common goal and strengthens cohesion. From a financial point of view, identifying the key emission items linked to energy consumption can also enable you to make significant savings while accelerating your energy transition.

For stakeholders, it's also a regularly scrutinized element. Investors are increasingly concerned about the sustainability of the projects and companies they finance. Transparency requirements aim to provide them with the best possible information on the current state of your emissions and your company's commitment to reducing emissions and environmental impact in general.

Last but not least, carrying out your company's carbon footprint is the first step in the fight against global warming.

Can a carbon audit be certified?

In recent years, numerous solutions for calculating corporate carbon footprints have been developed to meet the growing demand from companies for information on their CO2 and other greenhouse gas emissions. Some of these players promise certified Greenhouse Gas Emission Balances, which is a misleading promise.

It is important to note that there is no official certification for a Bilan Carbone®, and that certification is only valid if issued by an independent third party with no conflicts of interest. However, in France, the Association pour la Transition Bas Carbone (ABC) is responsible for the Bilan Carbone® reference methodology.

After being audited and assessed by ABC in early 2023, Traace was deemed compliant with the Bilan Carbone® methodology.

You can consult the list of technological solutions certified by the Association pour la Transition Bas Carbone (ABC) and ADEME by following this link.

How much does a company Bilan Carbone cost?

The cost of a company's carbon footprint is highly variable and depends on a number of factors:

  • ‍‍From the provider (SaaS software like Traace or consulting firm)
  • Scope: Does the balance sheet cover all 3 scopes or is it partial‍
  • Company size (number of employees, sales)
  • Your company's sector (primary, secondary or tertiary)
  • The time spent by the service provider 

How much does it cost to go through a consulting firm?

The prices charged for obtaining a carbon footprint for your company from a consulting firm are generally as follows:

  • 10,000 for a carbon footprint for an SME covering Scopes 1, 2 and 3‍ (with the possibility of a subsidy if it's your first carbon footprint).
  • Between €20,000 and €50,000 if your company is an ETI / Large enterprise.
  • For large international groups such as the CAC40, the price can exceed €100,000.‍

‍ Andwith SaaS software?

It all depends on the type of SaaS software you use!

There are 2 types of SaaS software on the market: those based on physical data and those based on monetary data.

Software based on monetary data: between €2,000 and €4,000

Software based on monetary data uses data from your bank account or Fichier des Écritures Comptables (FEC) to calculate carbon emissions. These programs are the least expensive on the market, costing between €2,000 and €4,000 for a Bilan Carbone.

However, this attractive price hides a number of pitfalls:

Analysis using monetary data, even if it complies with the Bilan Carbone methodology, is not recommended by ADEME. As a result, your Bilan Carbone may become invalid in the event of future regulatory changes.

The level of precision of GHG emissions is very low, with 80% uncertainty. In fact, using a monetary analysis, a plane ticket from Paris to New York costing €1,500 will emit 3 times more CO2 than the same ticket costing €500. But it's exactly the same flight, and therefore the same emissions!

Your emissions will increase if prices rise, even if your activity remains exactly the same. In times of inflation, your efforts may, at least on paper, be reduced to nothing.

The only way to reduce your emissions with a monetary analysis is to spend less, and therefore buy less. But buying cheaper can be counterproductive, as low-cost products are often manufactured in developing countries, where production methods are highly carbon-intensive.

For all these reasons, this software is mainly used by small and medium-sized businesses who want to make an initial estimate of their carbon emissions at low cost.

Moreover, their degree of uncertainty makes it impossible to identify and activate the levers that will enable you to take substantial action on your GHG emissions. As a result, you are likely to face major difficulties in the context of regulations requiring the implementation of an emissions reduction strategy, as requested in particular by the CSRD for the 2030 and 2050 horizons.

Software based on physical data: between €8,000 and €25,000

Software based on physical data uses "real" data, such as energy consumption in kWh, kilometers traveled, tons of products purchased, etc...

The cost of this software will be slightly higher than monetary solutions, but the measurement will be much more precise.

The major advantage is that these solutions make it possible to identify effective emission reduction levers, to measure their action in concrete terms, and thus to build a genuine decarbonization strategy, as called for by the CSRD.

Finally, analysis using physical data is the only one recommended by ADEME and the Association pour la Transition Bas Carbone (ABC).

These tools will cost between €8,000 and €25,000, depending on the size of the company. For a large group, deploying a SaaS solution on an international scale may prove more costly.

CSRD-compatible software: between €10,000 and €40,000

Finally, a 3rd category of tools is emerging: carbon accounting software compatible with CSRD requirements, such as Traace.

The new European regulations significantly raise the bar for carbon footprints. Companies are now required to produce annual scope 1, 2 and 3 reports, as well as precise details of their decarbonization strategy. In addition, they must report on and analyze the impact of a wide range of environmental (biodiversity, water resources, etc.), social and governance data.

The obligation to communicate on the transition plan entails major changes:

  • It is no longer possible to use monetary data, as they cannot be used to calculate the impact of an action.
  • From now on, the company must keep track of these activity data, as well as the emissions factors used, the scope and even methodological changes!

There are still few tools on the market enabling companies to report on all these elements. As data processing and analysis are more complex, these tools cost between €10,000 and €40,000 per year, a little more than "carbon estimation" tools, which do not meet all regulatory requirements and will not eventually enable all data to be reported.

How can I get my Bilan Carbone Entreprise subsidized?

As of January 1, 2022, ADEME has replaced the Bilan Carbone subsidy with the DIAG Décarbon'action.

This program, run in conjunction with BPI, enables SMEs and ETIs to carry out an initial Carbon Footprint and identify the first avenues for reducing emissions.

How does it work?

For a fee of between €4,000 and €6,000, a consultant selected by BPI will carry out your company's Bilan Carbone and action plan.

To be eligible, your company must :

  • Have fewer than 500 employees
  • Never having carried out your first carbon assessment

Prices vary according to company size:

  • 4,000€ if your company has fewer than 250 employees
  • 6,000 if your company has between 250 and 499 employees
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