In order to achieve net zero companies have to reduce their carbon footprint.
Carbon in this context is the Green House Gases released as a result of a company’s actions. Scientists have identified seven main greenhouse gases that contribute towards global warming, as a direct result of man’s activities. The most abundant of these is Carbon Dioxide so scientists adopted ‘Carbon’ as the base unit of measurement. The other six GHG’s that form part of your carbon footprint are calculated using a formula. This creates a simplified number, that is expressed when measuring your GHG emissions, as a ton of Carbon Dioxide equivalent. Thus it’s possible that your most significant emissions are not Carbon Dioxide but Methane or Hydrofluorocarbons. Understanding this is essential, in enabling businesses to effectively reduce their carbon footprint.
The base principle adopted in relation to net zero and the Green House Gas Protocol is that you can’t reduce something you haven’t measured. The first step towards achieving net zero is to measure an organisations carbon footprint. This process is divided into three areas that were originally set out in the 2001 and now form the basis of all mandatory greenhouse gas emissions reporting in the UK.
Scope 1 are those GHG emissions from sources that a company owns or controls directly, for example burning fuel in the company vehicles.
Scope 2 are indirect emissions from where the energy the business uses is produced. The emissions caused when generating electricity makes up the majority of this for most organisations.
Scope 3 encompasses all the indirect emissions from both the upstream and downstream value chain that are not included in Scope 1. They are challenging to measure as they sit outside the company’s direct control and comprise 15 categories including; purchased goods, employee commuting, use of sold products, transportation and distribution and leased assets.
Scope 3 emissions normally account for more than 70% of a company’s carbon footprint. Collecting robust and accurate data in this area is a critical part of the process in understanding the company’s true impact on the climate.
This series of short articles are designed to help inform your decision making process. Next month we will explore: How you measure your Carbon Footprint.
If you have a question relating to Net Zero or Carbon or would like us to address a specific topic in a future article, please email me: mark.sherwood@auditel.co.uk
THE TERMINOLOGY (put this in a box? coloured to complement the header)
Carbon Neutral – short term
Means balancing your reducing GHG emissions by “offsetting” an equivalent amount of carbon for the amount produced.
Net Zero – long term
This is reached with the amount of residual C02e (carbon dioxide emissions) emitted is matched by the quantity of C02e removed or captured. You cannot achieve net-zero by offsetting.