Understanding Carbon Accounting and Carbon Footprinting

Understanding Carbon Accounting and Carbon Footprinting for Your Organisation

Before you can manage your emissions, you need to understand carbon accounting. As explained during our ‘Gaining a Better Understanding of Carbon Footprinting and Life Cycle Assessments’ webinar which you can watch on-demand, carbon accounting is used by analysts and management teams to understand the extent of an organisation’s carbon emissions. Carbon accounting is also referred to as greenhouse gas accounting.

This process involves measuring seven direct greenhouse gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride, and nitrogen trifluoride) based on internationally recognised protocols. By engaging in carbon accounting, you can get a clear picture of your overall emissions and identify key areas for improvement.

Once you have established your carbon accounting, you can move on to carbon footprinting. This process measures the total amount of greenhouse gas emissions produced by your organisation, expressed as carbon dioxide equivalents (CO₂e).

By producing your carbon footprint and verifying it against standards such as ISO 14064-1 and the GHG Protocol, you gain reliable data that forms the foundation for setting reduction targets and tracking your progress towards net zero.

Getting to Grips with Global Warming Potentials

A common pitfall for many organisations is misapplying global warming potential (GWP) values. Global warming potential is the amount of warming a gas causes over a given period of time.

For instance, while carbon dioxide is assigned a GWP index of 1, methane is significantly more potent - 27.9 times more so over a 100-year period, based on the latest IPCC Assessment Report (AR6). If you use the wrong GWP in your calculations, the emissions data you rely on may be inaccurate. Therefore, it is crucial for you to apply the correct GWP to each greenhouse gas, ensuring that your carbon footprint is precise and actionable.

Why Carbon Footprinting Is Crucial for Your Business

When you accurately measure your emissions, you can identify the hotspots where emissions are higher than expected. This allows you to focus your reduction efforts where they are most needed. Carbon footprinting not only enables you to track your progress but also positions your business favourably when bidding for contracts and meeting regulatory requirements.

Understanding your carbon footprint can help you calculate the abatement cost by incorporating shadow carbon pricing. This approach accounts for the increasing costs of carbon credits in voluntary and compliance markets, such as the EU Emissions Trading System (ETS). In doing so, you will be better equipped to manage financial risks and make informed investment decisions. 

Our 11-Step Carbon Management Methodology

To help you implement an effective carbon management plan, TÜV SÜD follows an 11-step process that you can adopt:

1. Set Your Organisational Boundary: Decide which operations, ventures, or subsidiaries are included.
2. Define Your Operational Boundary: Choose the emission scopes (1, 2, or 3) that are relevant to your business.
3. Define the Time Period: Typically, you will select a calendar year as your reporting period.
4. Collect Activity Data: Gather data such as fuel usage, electricity consumption, transportation details, employee commuting, and business travel.
5. Apply Emission Factors: Use trusted sources like BEIS or other recognised databases to determine the appropriate factors.
6. Incorporate Global Warming Potentials: Multiply the activity data for non-CO₂ gases by the corresponding GWP.
7. Calculate Total Emissions: Convert everything into carbon dioxide equivalents (CO₂e).
8. Internal Reporting: Prepare a detailed report for internal review.
9. Verification: Have the data verified against standards such as ISO 14064-3.
10. Public Reporting: Share the verified report publicly to enhance transparency.
11. Set Emission Reduction Targets: Establish targets for carbon neutrality or net zero based on the data collected.

By following these steps, you can ensure that your emissions are measured accurately and that you have a solid strategy in place to reduce them over time.

Moving Beyond Carbon Footprinting: Life Cycle Assessment (LCA)

While carbon footprinting focuses specifically on greenhouse gas emissions, life cycle assessment (LCA) provides a broader view of your product’s environmental impact.

Life cycle assessment is the compilation and evaluation of inputs, outputs, and potential environmental impacts of a product system throughout its life cycle.

When you undertake an LCA, you are looking at the entire life cycle of your product from raw material extraction to manufacturing, distribution, usage, and finally, disposal. LCA helps you identify where environmental improvements can be made, not only in terms of carbon emissions but also regarding water usage, waste generation, and other environmental factors.

An LCA typically involves four phases:

1. Goal and Scope Definition: You determine what you want to assess and the boundaries of the study.
2. Inventory Analysis: You compile data on all inputs and outputs.
3. Impact Assessment: You evaluate the potential environmental impacts.
4. Interpretation: You draw conclusions and make recommendations based on the data.

LCA is not just about compliance. It’s a tool that can reveal opportunities for product redesign and innovation, allowing you to reduce environmental impact while potentially lowering costs.

One Step Further - UN SDG Mapping for Your Organisation

This tool designed by TÜV SÜD helps organisations to benchmark and track their contributions towards the 17 Sustainable Development Goals set out by the United Nations.

The UN SDG mapping process involves five steps:

1. SDG Weighting: Assess the universal, industry-specific, and regional relevance of each goal.
2. Collecting and Preparing Evidence: Gather documentation for each sub-goal indicator.
3. Rating: Assign scores (from 1 to 5) to each indicator based on how thoroughly your organisation meets the criteria.
4. Reporting and Providing Recommendations: Present your findings with detailed justifications and suggest ways to improve.
5. Presentation: Share your report and results in a transparent manner, for example via a QR code on your website, so that your progress is easily traceable.

This approach offers a holistic view of your sustainability performance, covering social, economic, and environmental aspects.

How You Benefit from a Holistic Sustainability Approach

By embracing carbon footprinting, life cycle assessment, and UN SDG mapping, you are setting your organisation on a course towards genuine sustainability. Here’s what you stand to gain:

• Competitive Advantage: When you can verify your sustainability efforts through robust data, you stand out in the marketplace. Clients and partners increasingly prefer organisations that can demonstrate measurable environmental progress.
• Risk Management: Identifying emissions hotspots and potential supply chain vulnerabilities allows you to mitigate environmental and financial risks.
• Enhanced Brand Reputation: Transparent sustainability reporting helps build trust with customers and stakeholders, boosting your brand image.
• Innovation and Efficiency: Life cycle assessment can uncover opportunities for redesigning products and streamlining operations, leading to cost savings and increased operational efficiency.
• Strategic Alignment: With a clear understanding of your contributions towards the UN SDGs, you can align your business strategy with global sustainability goals, making your long-term planning more robust. 

Taking the Next Steps on Your Sustainability Journey

• Free Training Course: Sustainability within the Organisation - Improve your understanding of how sustainability matters across the organisation through our free, online training course. Apply the code Sustain25 at checkout.
• Future Webinars: Stay informed with expert insights and methodologies by subscribing to our emails and following us on LinkedIn.
• Expert Support: Get tailored advice on carbon footprinting, life cycle assessment, and UN SDG mapping by contacting our team today.

Using these tools, you can strengthen your organisation’s resilience and sustainability.

Let us Help You Build a Sustainable Future

Sustainability is much more than compliance. It’s about integrating environmental responsibility with business success. Accurate carbon accounting, life cycle assessments, and UN SDG mapping provide the insights you need for meaningful action. View our carbon management services.

Every improvement you make contributes to a greater goal of building trust, managing risk, and positioning your organisation as a sustainability leader.