What is a carbon footprint?

Companies are increasingly committing to an environmental strategy, whether to anticipate future regulations or to outline their commitment to fight against global warming. A CSR (Corporate Social Responsibility) business model can be a  real lever to enhance your image and build loyalty among your partners and employees, but where to start?  

A carbon footprint measurement is the first step towards a robust environmental strategy for companies. In this article, we review what a carbon footprint measurement is, why, and how to do it.

What is a GHG footprint assessment?

A Greenhouse Gas (GHG) footprint is an assessment of the amount of greenhouse gasses emitted (or captured) into the atmosphere, over a reference period, by the activities of an organization or a territory.

In France, it is often referred to as Bilan Carbone®, a standard developed by The French Agency for Ecological Transition (ADEME). 

Why measure your carbon footprint? 

It has become necessary to change the way we produce and consume if we want to continue to live on a healthy and habitable planet. We can already see the disastrous repercussions of global warming on our civilizations: famines, displacement of populations, degradation of human health, water shortages, etc...

The IPCC (Intergovernmental Panel on Climate Change) warns of these repercussions and urges governments to drastically reduce their greenhouse gas (GHG) emissions to achieve the objectives of the Paris Agreement and limit global warming to 1.5°C compared to the pre-industrial era. 

Individuals and companies, therefore, have a duty to measure their carbon footprint and take the necessary steps to reduce their emissions, in the short term, and contribute to global carbon neutrality in the long term. 

This transition must be accompanied by concrete actions, the first step being to identify one's own sources of emissions to be able to reduce them: we cannot reduce what we have not measured.

To help them, companies can call upon consulting firms specialized in carbon assessment such as ClimateSeed's.

But what are the specific steps to properly measure your carbon footprint? 

Which perimeter do we need to consider for carbon footprint measurement?

To assess its GHG, several perimeters are taken into account: 

• The operational perimeter, all direct and indirect emissions generated by the company's activity.
• The organizational perimeter, all the company's sites, and facilities. 
• The temporal perimeter, the carbon footprint covers a specific period, delimited in time. 

Emissions are divided by scope (Scope 1, 2, & 3) or by emission items depending on the methodology. These categories correspond to the operational scope. 

What are the scopes of application? 

Scope 1 represents direct GHG emissions and takes into account the sources that are directly controlled by the company. This is the most limited scope and includes emissions related to the company's production process, fuel used for the process, air conditioning, and the company's vehicle fleet. 

Scope 2 represents indirect GHG emissions from the production of electricity purchased and consumed by a company. This includes the electricity and steam required to manufacture a product or provide a service, and therefore includes the energy production associated with a product or service.  

Scope 3 takes into account all other indirect emissions generated by the organization. This is the broadest scope, looking at the rest of the company's value chain (upstream and downstream activities). For example, we analyze emissions from the transportation of goods, waste management, business travel, supplier emissions or purchasing policy, etc.

A decree signed by the Minister for Energy Transition on July 1 2023 makes it mandatory to account for and report all significant indirect emissions, thus including so-called "scope 3" emissions. 

In France, regulations require companies with more than 500 employees to measure their greenhouse gas emissions at least once every four years.

Coming into force in the European Union (EU) in January 2023, the Corporate Sustainability Reporting Directive ("CSRD") represents a significant expansion of the scope of mandatory extra-financial reporting by companies within the EU.

While the NFRD is concerned only with large companies containing more than 500 employees, the CSRD will apply to large companies exceeding at least 2 of the following criteria:

• > 250 employees, 
• 20 million euros balance sheet,
• 40 million euros in sales.

Source: ADEME - Site Bilans GES.