The climate crisis is a reality and we all have a significant role in mitigating it. To reduce your climate impact, it is essential to first understand the carbon footprint by conducting a quality climate assessment. We have compiled a list of key questions and answers related to carbon footprint calculation to support decision-making.
What is a carbon footprint?
A carbon footprint refers to the climate impact generated by a company, organization, activity, or product throughout its lifecycle. In addition to carbon dioxide, a carbon footprint includes other significant greenhouse gases such as methane and nitrous oxide.
Depending on the goal of the carbon footprint calculation, it may encompass all lifecycle stages or only a portion. The lifecycle of a product typically involves sourcing and processing raw materials, manufacturing, product use, disposal, and often multiple transportation stages. Services also have lifecycles, requiring energy and materials for their production, which need to be sourced, manufactured, and recycled.
Why should a carbon footprint be calculated?
Calculating your carbon footprint is the first step towards reducing greenhouse gas emissions efficiently (i.e., purposefully and cost-effectively). Legislation also guides companies to report on the environmental impacts of their operations. For example, the EU’s Corporate Sustainability Reporting Directive (CSRD), which came into force on January 5, 2023, obliges not only listed companies but also an increasing number of unlisted companies to report their emissions.
These legislations may not yet affect your company. However, many smaller businesses are part of larger supply chains, increasing the need to report emissions from own operations upward.
Furthermore, consumers want to make more informed decisions and prefer low-carbon solutions, provided that information on the carbon footprint of products and services is available. Over half of Finns believe that to stop climate change, every Finn should change their lifestyle.1
How is a carbon footprint calculation done and what data does it require?
Carbon footprint calculation is based on life cycle assessment, which is a standardized calculation method. Carefully determining the climate impact according to good calculation principles is an excellent starting point when aiming for more sustainable operations. Depending on your own industry, this can then be extended to assessing and reducing other significant environmental impacts.
Carbon footprint calculation relies on data provided by the company about its own processes. Based on this input data, the carbon footprint is calculated by combining it with relevant greenhouse gas emission factors. For example, the carbon footprint of office electricity consumption is calculated by multiplying the amount of electricity consumed (kWh) by the emission factor for electricity production (gCO2eq/kWh).
So typically, in a carbon footprint project, the company’s own time is also required. It is the responsibility of the expert partner to ask the right questions about the company’s operations and match them with the correct emission factors. If certain information is not available, assumptions must be made and alternative data be used based on best scientific practices.
To enable comparison of carbon footprints of different products, standards recommend using up-to-date product category rules (PCR). However, not all products have up-to-date PCRs available. In such cases, calculations are made transparently according to good calculation practices, with assumptions made and reported accordingly.
How to avoid the pitfalls of carbon footprint calculation?
I think expertise and responsibility are the most important aspects of carbon footprint calculation. As mentioned earlier, while there are standards, guidelines, and examples for carbon footprint calculation, doing carbon footprint calculation teaches the practitioner. It inevitably takes time to learn a new method when calculating for the first few times. Additionally, only through doing carbon footprint calculation can one become proficient and understand where it is appropriate to use average data (secondary data) and where it is crucial to use data collected from one’s own processes (primary data).
There are also industry-specific differences in the standards and product category rules favored in each sector. For example, in the food industry in Finland, product life cycle assessment often follows the European Commission’s Joint Research Centre Product Environmental Footprint standard (PEF). When calculating a company’s carbon footprint, the GHG Protocol series of standards are often used. Organizational carbon footprints form the basis for the Science Based Targets initiative, where companies voluntarily commit to reducing their GHG emissions to levels set in the Paris Agreement, below 2 degrees Celsius.
When the calculation is done with a knowledgeable partner, quality and efficiency is ensured. It is the partner’s responsibility to ensure that the calculation is done correctly and in accordance with best practices. Of course, the company itself always has the responsibility to provide accurate data and to ensure that the results are used for the intended purpose. In a changing world and political climate, when a company commissions carbon footprint calculation, the most important thing, in my opinion, is to define the purpose of the process, i.e., the need for the calculation. After that, the calculation is carried out according to the best scientific practices and relevant standards. The work done and the assumptions made are well documented so that the calculation can be easily updated if necessary. Furthermore, quality calculations can genuinely be used as a basis for development work in the future.