A growing number of companies are pursuing ambitious carbon reduction targets to achieve carbon neutrality. In fact, more than one-third of the world’s largest publicly traded companies, now have net-zero targets. But a systematic reduction of greenhouse gas (GHG) emissions is only possible if emission intensive hotspots can be identified and quantified. The Corporate Carbon Footprint offers a proven methodology for companies to pinpoint emission hotspots and reduction opportunities. This guide will cover what a Corporate Carbon Footprint is, how to calculate it, and the value it can provide to your business.

Download The Guide for Setting Corporate Climate Goals to learn more.

What’s a Corporate Carbon Footprint?‍

A company’s carbon footprint, also known as Corporate Carbon Footprint (CCF), is the total amount of GHG emissions that are directly or indirectly caused by a company’s activities. Calculating the CCF is usually the first step toward carbon neutrality, because it provides clarity on your emissions hotspots. Without visibility on where those hotspots are and how your business activities are contributing, it’s difficult to define realistic climate goals and reduction strategies.

What’s included in a CCF?‍

A Corporate Carbon Footprint covers all direct and indirect emissions related to a company’s activities. This means that emissions across the entire value chain are included. For example, manufacturing companies will include all emissions from sourcing, logistics, use of sold products, and end-of-life disposal.

A CCF is usually calculated for a specific period, such as a calendar year. After that, any changes to the CCF are tracked by reporting periods (e.g., annually, quarterly, etc.).

Why should companies measure their carbon footprint? What are the benefits?

A CCF calculation can serve various purposes. It creates the transparency needed to discover your optimal emissions reduction opportunities. It also helps you identify the most relevant climate risks and opportunities for your business.

Measuring and tracking your carbon footprint also signals to stakeholders (investors, customers, employees, etc.) that you are serious about owning your responsibility for environmental impact. And, as regulators and investors increasingly focus on fighting climate change, demonstrating carbon accountability will be critical to long-term business survival. As a case in point, banks and investors representing over $130 trillion in assets are rapidly moving that capital toward decarbonization of the global economy.

How do you calculate a Corporate Carbon Footprint?

When measuring the carbon footprint of a business, one of the first steps is to define the scope of consideration. For a CCF calculation, this is largely defined by standards such as the GHG Protocol or ISO 14064.

The basis for calculating a CCF is the data on your business activities. Almost every action and decision made by a company can contribute to carbon emissions, so the more comprehensive and exact this data is, the more accurate your CCF will be. Keep in mind that getting to net-zero is a journey, so the most important thing you can do is take the first step. You can increase the accuracy over time as you learn more.

Collecting data for your CCF

Data from company-controlled activities is typically well-documented and easy to retrieve. This can include things such as energy consumption (electrical, natural gas, etc.) or business travel. By coupling this activity data with the appropriate emission factors, you can estimate the GHG emissions for each activity.

Some data may be more difficult to obtain, such as production or service activities performed by your suppliers. Employee commuter traffic and energy consumption of your products during the usage phase can also fall into this category. Companies are often unaware that indirect emissions from activities like these should also be included in the CCF. Even though these emissions happen outside a company’s direct influence, they are occurring because of decisions made by the company. These activities can represent a significant part of the company’s emissions.

Alternative methods for estimating indirect emissions

While the most accurate method for capturing indirect emissions is to request consumption data directly from employees, suppliers, and service providers, it isn’t always feasible. There are various databases that can help you fill the gap with estimated GHG emissions from common business activities based on widely available data. Examples include Scope 3 resources and databases provided by the GHG Protocol, US EPA, and Impact Institute. Combining data from these resources with key figures from your business, such as the number of employees, materials purchased, sales volume, etc. can help you evaluate your indirect emissions. The accuracy of your CCF will vary depending on the method used. Purely cost-based approaches tend to be imprecise because they rely on sector-wide averages averages and cost data is usually not available for use of sold products and end-of-life disposal. By using purchased material quantities (as opposed to the cost) as the basis for calculating carbon emissions, you can improve the accuracy of your carbon footprint.

How to address product-related GHG emissions

Once you have calculated your CCF and put reduction strategies in place, you can increase the depth of analysis with a Product Carbon Footprint (PCF). A PCF measures your product-related emissions and can leverage the data collection and analyses already established with your CCF.

How can businesses reduce their carbon emissions?

After completing your CCF analysis and identifying all the emissions generated by your company, you can start looking for reduction opportunities. Because the CCF looks at all emission sources, it provides a great starting point for defining and implementing carbon reduction strategies. Every company’s approach to reducing and offsetting its business carbon footprint will look different, but a few common ways include:

• Terminating contracts with GHG-intensive suppliers in favor of others with a lower CCF.
• Reducing resource consumption in production processes.
• Introducing energy efficiency measures.
• Considering the frequency and necessity of business travel.
• Invest in high-quality carbon offset projects.

One thing to note is that many standards, including the Science Based Targets initiative (SBTi), require you to reduce emissions first before offsetting residual emissions.

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