CARBON FOOTPRINT
Content
5.
Environmental Management Guidelines for Small Businesses
Carbon Footprint
Directly or indirectly, much of what we do on a daily basis at home and at work contributes to CO2 emissions; burning fuel to heat a building, using electricity generated by fossil fuels to operate equipment or driving a petrol or diesel car. Put simply the product or service that a small business supplies will result in greenhouse gas emissions. It is important to identify, therefore, why and where carbon emissions are generated; to quantify their level; to monitor them on an ongoing basis and to implement a plan to reduce them. A new term has been coined “carbon footprint” to describe the quantity of emissions emitted directly and indirectly by an individual, company, event, product or service. Many organisations are now calculating and managing their carbon footprints so as to proactively address climate change. What is a Carbon Footprint? A carbon footprint is a measure of the greenhouse gas emissions attributed to a company, product or service. When looked at in its widest sense, the totality of a footprint can be vast; encompassing direct emissions from fuels used, indirect emissions from employee travel or even upstream emissions from suppliers or downstream from customer activities.
Introduction Climate change is now recognised by all as a serious global environmental problem. Substantial rises in greenhouse gases (GHG) arising from human activity, the main one being carbon dioxide (CO2), have been shown to cause discernible effects on the global climate system. While meeting the challenge of climate change clearly needs a long term global solution, which includes all countries and regions, each and every Irish business, irrespective of size, sector or location, can play a positive role. By firstly measuring and then reducing their individual emissions, small business can reap both economic and environmental benefits.
5. Carbon Footprint
While it is true that quantifying direct, indirect, upstream and downstream emissions gives a complete picture of an organisation’s impact, such an undertaking can be complex and the usefulness limited if emissions are largely beyond their control. It is worth stating that carbon footprints are rarely comparable between businesses, as most do not use the same calculation method. While international standards are being developed, the real value for companies is to develop a reliable method to understand, measure and reduce their individual footprint. Why Calculate a Carbon Footprint? For most companies, calculating a carbon footprint provides an internal framework to enable them to minimise greenhouse gas emissions. For the vast majority a basic footprint will suffice. However, increasingly carbon footprints are used for external purposes with third parties such as customers and other stakeholders. In these instances it is likely that a more rigorous process will be required. Framework for Managing Emissions Internally Calculating your company’s carbon footprint is an effective way of managing energy and environmental issues. For this purpose it is likely to be adequate to understand and quantify the key emission sources through a basic process, typically including fuel, electricity and transport.
Such an approach, while relatively quick and straightforward, allows reduction opportunities to be identified and prioritised. Managing External Emissions Many companies no longer see the benefits of carbon footprinting confined to internal use and have expanded its role to include marketing and a drive to be “carbon neutral”. Companies can achieve carbon neutrality by offsetting their emissions with reductions made elsewhere which they have purchased. For a company’s claim of carbon neutrality to have validity then their carbon footprint, and hence the offset, needs accurate calculation. In these instances, a more detailed approach is likely, covering a fuller range of emissions for which the company is responsible. Some thought should be given to requiring independent verification to ensure the veracity of the results. How to Calculate a Carbon Footprint A number of standard methodologies exist for calculating carbon footprint which, while most suited to large organisations, can be useful for those who wish to tailor a system to their own requirements. Amongst the best is the GHG Protocol produced by the World Resources Institute and the World Business Council for Sustainable Development available at web-site: www.ghgprotocol.org. In addition the standard, ISO 14064 (web-site: www.iso.org), provides guidance on footprint calculation and emissions reporting.
Environmental Management Guidelines for Small Businesses
Identify the Scope of the Footprint The scope of a footprint should depend on the reasons why a company is undertaking the calculations. Emissions are often classified on the basis of the level of control a company has over them. LEVEL 1 DIRECT EMISSIONS FROM ACTIVITIES THE COMPANY CONTROLS Direct emissions normally result from burning fossil fuels, which emit CO2, such as the oil used to heat the premises or the gas used to provide hot water. Some companies directly release CO2 in processes like fermentation while some emit other greenhouse gases such as methane (CH4) and nitrous oxide (N2O). LEVEL 2 EMISSIONS FROM THE USE OF ELECTRICITY Electricity is essential for companies to power lighting and equipment. In Ireland almost 90% of electricity generated is from fossil fuels such as peat, coal, oil and gas. The remainder is produced from renewable sources such as wind, hydro and biomass. While an organisation is not directly in control of these emissions, by purchasing electricity it is indirectly responsible for the release of CO2. LEVEL 3 INDIRECT EMISSIONS FROM PRODUCTS AND SERVICES Emissions generated upstream each time a company buys a product or service and downstream when products it sells are used and disposed of, can indirectly be attributed to them. While upstream and downstream emissions are part of a complete carbon footprint, calculating them can be extremely complex. Should, for instance, a company distributing steel products quantify all the emissions involved in their mining, smelting, production and transport?
When calculating a basic carbon footprint for internal use it is likely to include emissions emitted directly and those from electricity generation, but exclude some or all indirect emissions. For most firms this means just a handful of major emissions sources will need quantification, such as fuel and electricity used on-site and company owned transport. When deciding if indirect emissions should be included the ability of the company to reduce these emissions should be a consideration. Where a more detailed footprint is required for purposes such as carbon neutrality then emissions from all levels will need to be assessed. Collect the Data and Calculate the Footprint In the case of the basic footprint much of the key information required is likely to already be in place such as data from electricity and gas meters. Other information such as records of the miles travelled by the company vehicles may not be currently recorded. However once collected, input data such as fuel, electricity and transport consumption figures can be converted to the amount of CO2 emissions by using the standard emissions factors, which can be found on the websites of a number of institutions such as the Carbon Trust. When calculating a more detailed carbon footprint a number of decisions must be taken as to the exact extent which upstream and downstream emissions will be included. It is important that these boundaries, assumptions and estimations made and other decisions, such as whether outsourced activities and leased assets are included or excluded, are transparent and fully recorded. Data requirements can often be extensive, complex and difficult to obtain.
Environmental Management Guidelines for Small Businesses
5. Carbon Footprint
The reliability of the data often decreases the further up or down the supply chain the emissions are from the organisation itself. In many instances the assistance of suppliers and customers will be a necessity. Managing the Footprint Once a company’s carbon footprint has been calculated, it allows it to be monitored, managed and hopefully reduced. It is important not to get lost in the methodology and not forget the objective – to provide a product or service in the most efficient manner and with the lowest possible carbon footprint. Emissions and energy consumption are inextricably linked and reductions improve the efficiency and therefore the competitiveness of a firm. Once the initial carbon footprint has been quantified then the company should: Use the data collected to identify all areas where emissions can either be reduced or efficiencies improved. Prioritise the options based on feasibility, environmental or financial benefits. Set targets for improvements internally, with contractors and with upstream suppliers. Implement the actions. Monitor the performance on an ongoing basis. Communicate success.
Verification Where companies use their carbon footprint for marketing purposes, they should consider having the carbon footprint verified by an external entity to increase the credibility of the process where necessary. Verification is likely to entail an independent analysis of the methods used and calculations performed. Summary Climate change is a recognised global environmental issue that affects all aspects of society. Carbon dioxide is recognised as a key greenhouse gas that contributes to this problem. By measuring the carbon emissions or ‘carbon footprint’ of a business, ownermanagers can identify strategies that tackle climate change and deliver energy efficiencies and cost savings for that business. Further Information The Carbon Trust: www.carbontrust.co.uk International Standards Organisation www.iso.org Green House Gas Protocol www.ghgprotocol.org
Copyright 2007 Published by the Small Firms Association 84/86 Lower Baggot Street Dublin 2 Telephone: 01 605 1500 Fax: 01 661 2861 E-mail: [email protected] Website: www.sfa.ie This guide is intended to generate discussion and/or consideration of the more important issues to be taken into account when examining environmental management issues. The SFA or AIB Bank do not accept responsibility for any loss or damage occasioned by any person acting or refraining from acting as a result of the material in this guide. Detailed professional advice should always be obtained before acting on any matter raised in this guide.
Environmental Management Guidelines for Small Businesses
Carbon Footprint
Directly or indirectly, much of what we do on a daily basis at home and at work contributes to CO2 emissions; burning fuel to heat a building, using electricity generated by fossil fuels to operate equipment or driving a petrol or diesel car. Put simply the product or service that a small business supplies will result in greenhouse gas emissions. It is important to identify, therefore, why and where carbon emissions are generated; to quantify their level; to monitor them on an ongoing basis and to implement a plan to reduce them. A new term has been coined “carbon footprint” to describe the quantity of emissions emitted directly and indirectly by an individual, company, event, product or service. Many organisations are now calculating and managing their carbon footprints so as to proactively address climate change. What is a Carbon Footprint? A carbon footprint is a measure of the greenhouse gas emissions attributed to a company, product or service. When looked at in its widest sense, the totality of a footprint can be vast; encompassing direct emissions from fuels used, indirect emissions from employee travel or even upstream emissions from suppliers or downstream from customer activities.
Introduction Climate change is now recognised by all as a serious global environmental problem. Substantial rises in greenhouse gases (GHG) arising from human activity, the main one being carbon dioxide (CO2), have been shown to cause discernible effects on the global climate system. While meeting the challenge of climate change clearly needs a long term global solution, which includes all countries and regions, each and every Irish business, irrespective of size, sector or location, can play a positive role. By firstly measuring and then reducing their individual emissions, small business can reap both economic and environmental benefits.
5. Carbon Footprint
While it is true that quantifying direct, indirect, upstream and downstream emissions gives a complete picture of an organisation’s impact, such an undertaking can be complex and the usefulness limited if emissions are largely beyond their control. It is worth stating that carbon footprints are rarely comparable between businesses, as most do not use the same calculation method. While international standards are being developed, the real value for companies is to develop a reliable method to understand, measure and reduce their individual footprint. Why Calculate a Carbon Footprint? For most companies, calculating a carbon footprint provides an internal framework to enable them to minimise greenhouse gas emissions. For the vast majority a basic footprint will suffice. However, increasingly carbon footprints are used for external purposes with third parties such as customers and other stakeholders. In these instances it is likely that a more rigorous process will be required. Framework for Managing Emissions Internally Calculating your company’s carbon footprint is an effective way of managing energy and environmental issues. For this purpose it is likely to be adequate to understand and quantify the key emission sources through a basic process, typically including fuel, electricity and transport.
Such an approach, while relatively quick and straightforward, allows reduction opportunities to be identified and prioritised. Managing External Emissions Many companies no longer see the benefits of carbon footprinting confined to internal use and have expanded its role to include marketing and a drive to be “carbon neutral”. Companies can achieve carbon neutrality by offsetting their emissions with reductions made elsewhere which they have purchased. For a company’s claim of carbon neutrality to have validity then their carbon footprint, and hence the offset, needs accurate calculation. In these instances, a more detailed approach is likely, covering a fuller range of emissions for which the company is responsible. Some thought should be given to requiring independent verification to ensure the veracity of the results. How to Calculate a Carbon Footprint A number of standard methodologies exist for calculating carbon footprint which, while most suited to large organisations, can be useful for those who wish to tailor a system to their own requirements. Amongst the best is the GHG Protocol produced by the World Resources Institute and the World Business Council for Sustainable Development available at web-site: www.ghgprotocol.org. In addition the standard, ISO 14064 (web-site: www.iso.org), provides guidance on footprint calculation and emissions reporting.
Environmental Management Guidelines for Small Businesses
Identify the Scope of the Footprint The scope of a footprint should depend on the reasons why a company is undertaking the calculations. Emissions are often classified on the basis of the level of control a company has over them. LEVEL 1 DIRECT EMISSIONS FROM ACTIVITIES THE COMPANY CONTROLS Direct emissions normally result from burning fossil fuels, which emit CO2, such as the oil used to heat the premises or the gas used to provide hot water. Some companies directly release CO2 in processes like fermentation while some emit other greenhouse gases such as methane (CH4) and nitrous oxide (N2O). LEVEL 2 EMISSIONS FROM THE USE OF ELECTRICITY Electricity is essential for companies to power lighting and equipment. In Ireland almost 90% of electricity generated is from fossil fuels such as peat, coal, oil and gas. The remainder is produced from renewable sources such as wind, hydro and biomass. While an organisation is not directly in control of these emissions, by purchasing electricity it is indirectly responsible for the release of CO2. LEVEL 3 INDIRECT EMISSIONS FROM PRODUCTS AND SERVICES Emissions generated upstream each time a company buys a product or service and downstream when products it sells are used and disposed of, can indirectly be attributed to them. While upstream and downstream emissions are part of a complete carbon footprint, calculating them can be extremely complex. Should, for instance, a company distributing steel products quantify all the emissions involved in their mining, smelting, production and transport?
When calculating a basic carbon footprint for internal use it is likely to include emissions emitted directly and those from electricity generation, but exclude some or all indirect emissions. For most firms this means just a handful of major emissions sources will need quantification, such as fuel and electricity used on-site and company owned transport. When deciding if indirect emissions should be included the ability of the company to reduce these emissions should be a consideration. Where a more detailed footprint is required for purposes such as carbon neutrality then emissions from all levels will need to be assessed. Collect the Data and Calculate the Footprint In the case of the basic footprint much of the key information required is likely to already be in place such as data from electricity and gas meters. Other information such as records of the miles travelled by the company vehicles may not be currently recorded. However once collected, input data such as fuel, electricity and transport consumption figures can be converted to the amount of CO2 emissions by using the standard emissions factors, which can be found on the websites of a number of institutions such as the Carbon Trust. When calculating a more detailed carbon footprint a number of decisions must be taken as to the exact extent which upstream and downstream emissions will be included. It is important that these boundaries, assumptions and estimations made and other decisions, such as whether outsourced activities and leased assets are included or excluded, are transparent and fully recorded. Data requirements can often be extensive, complex and difficult to obtain.
Environmental Management Guidelines for Small Businesses
5. Carbon Footprint
The reliability of the data often decreases the further up or down the supply chain the emissions are from the organisation itself. In many instances the assistance of suppliers and customers will be a necessity. Managing the Footprint Once a company’s carbon footprint has been calculated, it allows it to be monitored, managed and hopefully reduced. It is important not to get lost in the methodology and not forget the objective – to provide a product or service in the most efficient manner and with the lowest possible carbon footprint. Emissions and energy consumption are inextricably linked and reductions improve the efficiency and therefore the competitiveness of a firm. Once the initial carbon footprint has been quantified then the company should: Use the data collected to identify all areas where emissions can either be reduced or efficiencies improved. Prioritise the options based on feasibility, environmental or financial benefits. Set targets for improvements internally, with contractors and with upstream suppliers. Implement the actions. Monitor the performance on an ongoing basis. Communicate success.
Verification Where companies use their carbon footprint for marketing purposes, they should consider having the carbon footprint verified by an external entity to increase the credibility of the process where necessary. Verification is likely to entail an independent analysis of the methods used and calculations performed. Summary Climate change is a recognised global environmental issue that affects all aspects of society. Carbon dioxide is recognised as a key greenhouse gas that contributes to this problem. By measuring the carbon emissions or ‘carbon footprint’ of a business, ownermanagers can identify strategies that tackle climate change and deliver energy efficiencies and cost savings for that business. Further Information The Carbon Trust: www.carbontrust.co.uk International Standards Organisation www.iso.org Green House Gas Protocol www.ghgprotocol.org
Copyright 2007 Published by the Small Firms Association 84/86 Lower Baggot Street Dublin 2 Telephone: 01 605 1500 Fax: 01 661 2861 E-mail: [email protected] Website: www.sfa.ie This guide is intended to generate discussion and/or consideration of the more important issues to be taken into account when examining environmental management issues. The SFA or AIB Bank do not accept responsibility for any loss or damage occasioned by any person acting or refraining from acting as a result of the material in this guide. Detailed professional advice should always be obtained before acting on any matter raised in this guide.
