Understanding your organization's carbon footprint is the first step toward meaningful change.

Corporate Carbon Footprint

The Corporate Carbon Footprint (CCF) is a significant indicator used in sustainability reporting and helps organizations comply with directives such as the Corporate Sustainability Reporting Directive (CSRD). By considering both direct and indirect emissions, it is calculated according to the Greenhouse Gas Protocol and ISO 14064 standards. By calculating and understanding your CCF, you can identify cost-effective CO2 reduction opportunities and manage greenhouse gas risks effectively.

Social and legal background

Climate change, climate protection and climate adaptation are issues that concern people, not only in Germany but worldwide. The EU has adopted reduction targets for 2050 in its climate laws. These, along with other measures were defined as part of the European Green Deal, which include regulatory and taxonomic actions. The requirements will affect companies’ activities over the coming decades and will be gradually tightened. Environmental performance, particularly global warming potential, is already an essential non-financial indicator for companies. The Corporate Carbon Footprint is a harmonized, scientifically based method for determining, analyzing and communicating your company's global warming potential. This allows you to quantify your greenhouse gas emissions, identify potential reduction opportunities and meet the requirements of the transformation to a climate-neutral economy.

How is a corporate carbon footprint created?

The Corporate Carbon Footprint (CCF) is essentially a corporate Life Cycle Assessment focussed on a single environmental impact category: Global Warming Potential (GWP 100). As in Life Cycle Assessments, several factors are defined in preparation for the CCF: the goal and scope of the study, reference year, system boundaries, cut-off criteria, underlying standards, and other company-specific parameters. The most important standards for CCF calculation are the Greenhouse Gas Protocol (GHG Protocol) and the ISO 14064 standard. We are happy to advise you on the extent to which your CCF should comply with one, both, or other sustainability standards and specifications.

GHG Protocol

The GHG Protocol is a standard developed by the World Resources Institute and the World Business Council for Sustainable Development for calculating and reporting greenhouse gas emissions by companies. It defines principles, calculation rules and reporting targets. Direct and indirect emissions from companies are divided into three scopes.

Scope 1 includes direct emissions, such as emissions from combustion processes in production and company-owned vehicles.

Scope 2 covers indirect emissions from purchased electricity, heat, cooling, and steam.

Scope 3 includes upstream and downstream indirect emissions, such as the extraction of raw materials, waste treatment and business travel..

The GHG Protocol also recommends verifying the results.

ISO 14064

Similar to the GHG Protocol, ISO 14064 defines principles for recording, calculating and reporting greenhouse gas emissions in six categories. Categories 1 and 2 correspond to scope 1 and 2 of the GHG Protocol, where the term 'category' is used instead of 'scope'. In contrast, ISO 14064 divides upstream and downstream indirect emissions (Scope 3 in the GHG Protocol) into four categories:: indirect greenhouse gas emissions from transportation, from products used by the organization, from products generated by the organization and from other sources. The ISO standard also provides clear verification requirements.

The calculation is mandatory for emissions in scopes 1 and 2 (or categories 1 and 2). Indirect upstream and downstream emissions (GHG: scope 3 / ISO 14064: category 3 - 6) must be selected based on a company or sector-specific materiality to ensure a cost-efficient approach. High quality results are ensured by including all significant indirect emission sources. Figure 1 provides an overview of the considered emission sources in the various GHG Protocol scopes and ISO 14064 categories.

Relationship between regulatory requirements for sustainability reporting and the corporate carbon footprint

The calculation and assessment of a company's climate-relevant emissions are usually an important part of sustainability reports. In the European Economic Area, the Corporate Sustainability Reporting Directive (CSRD) plays a central role in achieving a climate-neutral economy. The CSRD requires companies to report on their sustainability performance in accordance with the European Sustainability Reporting Standards (ESRS) providing specific information on climate change. The CCF is a mandatory component of CSRD reports under the ESRS-E1 Climate Change Standard.

ESRS-E1 focuses specifically on climate change and sets demanding reporting standards for companies. ESRS-E1 requires reporting on greenhouse gas emissions calculations, evaluation of reduction measures, integration into the corporate strategy and financial modeling. The aim of ESRS-E1 is to give investors and stakeholders a comprehensive understanding of how reporting companies contribute to climate change and how climate change affects their business activities and financial performance.

Contact us today to calculate and verify your company's carbon footprint and integrate it into your sustainability reporting.