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Carbon footprint: why and how to measure?

13 April 2023
Article by Roberto Correia, consultant at INEGI in the area of Circular Economy

The climate crisis is an issue that leaves no one indifferent and the relationships between companies and customers, and companies and investors, are also affected by this reality. This is why it is increasingly important for the industry to understand and quantify its carbon footprint, and to be transparent about its actions.

But after all, what is the carbon footprint? This concept quantifies the direct and indirect emissions of greenhouse gases produced in a given activity or process, expressed in units of carbon dioxide equivalent (kg CO2eq).

The quantification of the Carbon Footprint must begin with the definition of the scope of assessment, with data on business activities forming the basis for this calculation and the same must be normalized through the application of the Greenhouse Gas Protocol and the International Organization standards for Standardization (ISO) 14064 and 14065.

There are two types: corporate and product footprints. The first evaluates the emissions of all the activities of the respective company or organization, such as the use of energy and transport, among others. The product footprint can be determined from the life cycle assessment (LCA), considering all emissions during its useful life, covering all stages of its existence, from resource extraction, to its disposal or reuse. .

In the context of our consultancy work on Circular Economy, we help companies to measure indicators in both these domains. Why?

Virtually all actions and decisions taken by a company can contribute to greenhouse gas emissions, so the more specific and accurate this data is, the more accurate the calculation of the Carbon Footprint will be.

Why measure the Carbon Footprint?

Because calculating the Carbon Footprint has several advantages. Let's see:

Reduce costs and impacts in line with the fight against global warming

This measurement makes it possible to identify the main sources of emissions and develop strategies to reduce them, which should involve increasing the efficiency of production processes, optimizing energy consumption, reducing waste, increasing the recovery and reuse of materials, among others. That is, the reduction of carbon emissions can also result in financial benefits for the company.

Combat climate change

We all have a role to play in the fight against climate change, but companies have the greatest margin of action, and a special contribution to collectively achieving the goals set by the European Commission. Companies must, therefore, know their carbon footprint in depth in order to be able to define improvement action plans. It is important to invest in a roadmap that allows for the improvement of environmental performance, with the objective of decarbonizing in the short-medium term, also including the contemplation of action plans in various lines of sustainability, such as energy efficiency or the circular economy.

In this way, the Carbon Footprint will be an essential tool in identifying the current environmental performance scenario and in defining action plans to improve the organization.

Strengthen reputation with stakeholders

Transparently disclosing carbon emissions and reduction targets can be a competitive advantage for an organization, as it demonstrates the involvement and commitment of companies in preserving the environment, preponderant in the definition of a position before its stakeholders, especially customers and investors .

This positioning can have the same effect on the companies' communication, leveraging awareness based on environmental responsibility. Through the evolution of the carbon footprint, it is possible to illustrate the organization's commitment to sustainability to the public. And part of this audience will be potential future employees, so this could still be a factor in attracting and retaining talent.

Meet environmental and regulatory goals

In most developed countries, companies are obliged to follow legislation regarding the regulation of greenhouse gas emissions in different economic activities. In Portugal, there is legislation in the field of climate change, namely Regulation (EU) 2020/852 on 22 June 2020 (Taxonomy), European Emissions Trading (ETS) or Implementing Regulation (EU) 2018/ 2066.

How to reduce carbon emissions?

As the Carbon Footprint analyzes all sources of greenhouse gas emissions, it is an excellent starting point for defining and implementing carbon reduction strategies.

Any strategy will be unique, as it depends on specificities not only of the sector or business, but also of the respective processes and facilities. However, there are some measures applicable to all sectors, such as choosing suppliers with a low Carbon Footprint, reducing resource consumption in production processes, introducing energy efficiency measures, and even considering the frequency and need for business travel. .

Also, along with the digitization processes that are currently being implemented in the industry, companies understand the added value of having the Carbon Footprint and other sustainability indicators integrated with their equipment and systems, in a digitized and customized, allowing its monitoring, this being clearly a market trend representative of a significant technological evolution that INEGI monitors and implements with its stakeholders, positioning them at the forefront of innovation.

It should also be noted that the Carbon Footprint is just one of several environmental indicators for sustainable development. There are many others associated with the sustainable transition that are equally relevant, such as the Water Footprint, Ecological Footprint, Use of Natural Resources, Impact on Biodiversity, Eutrophication, Ecotoxicity, Waste Disposal, Soil Contamination, among others. Each of these indicators provides a unique insight into the environmental impact of a company or product, and it is important that they be evaluated in an integrated way to obtain a more complete understanding of sustainability.


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