The Carbon Footprint/Inventory, the first step in measuring and improving its Carbon Competitiveness

What are the methodologies of the Carbon Footprint/Inventory?

📃 International methodologies

ISO 14 064 is an international methodology for GHG quantification and reporting projects.

Organizations that comply with this ISO standard not only contribute to achieving the climate goals set by the Paris Agreement, but also gain credibility and transparency.

Its revision in 2016 resulted in the publication of ISO 14064-1: 2018.

The latter specifies that organizations wishing to be compliant must take into account all their significant direct and indirect emissions. The distinction between scope 2 and scope 3 disappears, and all indirect emissions, which were previously only optional, must be taken into account.

These changes have done away with the distinction between scopes 1, 2 and 3, replacing them with 6 categories (scope 3 being itself divided into 4 categories) with the obligation to quantify significant indirect emissions.

The GHG Protocol: the World Business Council for Sustainable Development (WBCSD) and the World Resources Institutes (WRI ) have developed, since 1998, in partnership with companies, NGOs and government representatives, a methodology to account for, measure and reduce GHGs from public and private sector economic actors.

This non-regulatory method (or private standard) was the first to define Scopes 1, 2 and 3 as we know them today in other standards and methods.

However, it does not define reporting requirements for organizations and leaves the possibility of excluding scope 3 from the balance sheet.

This method is mainly used by Anglo-Saxon countries, whose regulations are generally less stringent in terms of GHG calculation and reporting for organizations. It is little used by the rest of the world's developed countries, which mainly use ISO 14064-1: 2018.

📄 National methodologies

The French regulatory method :

Since June 2011, under the Grenelle II Law of July 12, 2010, the regulatory method is required for eligible companies (companies with more than 500 employees - 250 for overseas departments) to perform their emissions assessment every 4 years.

Until 2022, only the reporting of scopes 1 and 2 was mandatory for companies, with only the consideration of scope 3 strongly recommended.

This regulatory method was finally revised by Decree 982 of July 1, 2022, and now follows the methodological principles of ISO 14 064 -1: 2018, in particular the mandatory inclusion of Scope 3 for companies entering the scope of the Extra-Financial Performance Declaration (EFPD), and adds the obligation to draw up a transition report indicating the footprint reduction efforts achieved and projected by the company.

Note that since 2019, we no longer speak of CO2 emissions but of GHG (Greenhouse Gas) emissions expressed in "tons of CO2 equivalent", CO2e, which represent a better reality of the emissions to be taken into account, already retained in the framework of the Kyoto Protocol: CO2, CH4, N2O, SF6, NF3, HFC, CFC, PFC

The GHG inventory® method - Association Bilan Carbone

In France, ADEME published in 2004 a methodology for quantifying greenhouse gas emissions for organizations called GHG inventory.

The GHG inventory method®takes into account all the greenhouse gases defined by the IPCC for all physical flows, and covers all SCOPES 1, 2 and 3 as defined by the GHG Protocol.

Today, this method is coordinated and disseminated by the Bilan Carbone Association (which has since become the Association for the Low-Carbon Transition), but remains closely linked to ADEME, which allows the publication of these Bilans Carbone® on its website

As a member of the ABC, Global Climate Initiatives (GCI), provides online tools to identify, calculate, reduce and contribute to the best possible carbon footprint, in full compliance with national and international texts, benchmarks and standards.

What is the Carbon Footprint/Inventory composed of?

It is carried out in several stages:

🎯 The framing

🔎 Identification of emission sources and factors

📃 Data collection

📊 Balance sheet calculation and analysis

📉 The development of a transition/reduction plan (with short, medium and long term reduction targets)

✅ The online publication

é🎯 Define the framework

The first step is to define its perimeters:

Temporal scope:

It is the quantification of the carbon footprint during a given period. The temporal perimeter is defined using 2 concepts:

• • The reporting period: the period or year to which the activity data collected for the carbon footprint/inventory relates. In accordance with Article R. 229-47 of the Environmental Code, the reporting year is the year preceding the year in which the report is prepared or updated.

• • The baseline period: The baseline period allows the organization to track its trajectory over time and measure the effectiveness of the measures implemented. The organization can either use its first year of reporting as the baseline year, or the last year in which its assessment was done.

Organizational scope:

• • Depending on the complexity of their structure, organizations may comprise one or more establishments, which may themselves own, control or be involved in different activities.
• • The property, asset or activity may have one or more sources of its carbon footprint.

The identification of this organization constitutes the definition of the organizational perimeter, which makes it possible to define the goods, assets and activities concerned by the GHG emissions report.

Operational scope: concerns all GHGs related to operations, broken down by category and by item. It is in this perimeter that are accounted for :

• • Emission items that identify the source
• • Emission factors (EF ) that allow to evaluate the quantity generated by the company's activities
• • The different scopes 1, 2, 3 and 4 where they are distributed to be measured

Based on the organizational and operational perimeters previously defined, organizations must identify their activity data and the related EFs (emission factors).

For further information, seeScope 4 avoided emissions: definition.

🔎 Identification of emission sources and factors

The carbon footprint is defined as "the total amount of greenhouse gases emitted with a direct or indirect effect by an individual, organization, event or product".

The carbon footprint is thus based on the organization's activity data, and on a set of EFs allowing to convert them into tons of CO2 equivalent.

• • The activity data correspond to the quantities to be filled in for each emission category. Example of activity data: Energy consumption in liters or kWh.
• • EF: coefficient relating the GHG emission to the activity data generating these emissions.

Greenhouse gas emissions = activity data x corresponding EF

There are 4 types of emission factors:

• • Monetary emission factors: these factors are proposed by ADEME and other international reference bases, and are applicable to Scope 3 emissions. They considerably simplify the work of entering the GHG balance, but have many drawbacks. Indeed, by using these factors, the company must disclose accounting information to carry out its regulatory GHG inventory. These factors are also not very meaningful because the emissions calculated depend on the prices at which the company has negotiated its energy, goods and services purchased. Thus, inflation inflates the carbon footprint of companies! ADEME gives an uncertainty of 80% for these factors and recommends using them only as a last resort
• • ️Emissionfactors by type of products and services: these factors are also proposed by ADEME and other international reference bases. However, they are only average factors. For example, a T-shirt, which has only one emissions factor in the base, may be produced in Asia or Europe using different processes, materials and energy, which makes the amount of GHG emissions associated with it vary considerably. Moreover, not all goods and services are covered by these factors (only 7,000 factors in the Ademe's Base Carbone®, for hundreds of millions of products and services on the market...).
• • Composite Emission Factors® (PCF ): these factors are developed from the detailed composition of a product or service and take into account the GHG emissions associated with each stage of its life cycle (extraction and transport of raw materials, manufacturing processes, distribution from the factory, use and end of life of the product)
• • Emission factors per unit of work (EFW): these factors are calculated from the overall carbon impact of an organization or part of its activity by allocating its GHG emissions to its production units. They allow to take into account the different stages of the life cycle in a precise way.

️ ➡ PCFs and emission factors per unit of work are thus essential tools for companies wishing to improve their Carbon Competitiveness® by favoring suppliers with the best "carbon" performance.

The EFs used for the Carbon Footprint/Inventory can come from different reference bases

Before using these databases, it is important to ensure that they comply with the methodological principles in accordance with the various standards and regulations.

For more rigor, GCI advises you to use only one Base per calculation because the factors proposed by each one do not always respect the same methodological principles in their elaboration.

Only if there is a lack of PAs related to an organization's activity, factors from another database can be added to the main database.

• • Base Carbone®: Managed by ADEME, this is a French public database of EFs required for carbon accounting exercises.
• • Ecoinvent®: International life cycle inventory (LCI) database that supports various types of assessment. It can be used to obtain the EFs required for the Bilan Carbone, as well as for the full Life Cycle Assessment (LCA).
• • UK-BEIS (DEFRA): Database of EFs from the UK government's Department for Environment, Food and Rural Affairs, which is responsible for environment and agriculture and greenhouse gas reporting. These EFs can be used by organizations of all sizes based in the UK and by international organizations reporting in the UK.
• • INIES®: National reference database on environmental and health data on construction products and equipment managed by the CSTB

They are all available on the GCI platform and regularly updated by our methodology department.

GCI focuses on encouraging the calculation of EFs by suppliers (PCFs) so that they can be integrated by their customers.

👉 This gives a much better accuracy in the evaluation of its footprint

👉 A collaboration between customers and suppliers is thus possible to find together the best ways to reduce GHG emissions.

📄 Data collection

This is an essential point of the balance sheet; it must be as exhaustive as possible. It is a demanding step that may require the participation of the different departments of an organization, because this collection must concern all the activity data of the company.

They are then divided into several categories, or emission items:

• • Energy consumption (gas, oil, diesel, gasoline, electricity, etc.)
  • Depreciating assets (real estate, fleet of vehicles, computer equipment, furniture, etc.)
  • Purchases of goods (raw materials, materials, etc.)
  • Purchases of services (internet subscription, maintenance and installation of equipment, supplies of services, fees, etc.)
  • Personal travel: employee commuting, business travel, visitors and customers, etc.
  • Transport of goods
  • Waste disposal
  • The use and end of life of its products sold.

This data is then associated with an EF which will allow the calculation of the carbon footprint associated with the organization's activity.

To facilitate data collection, GCI offers questionnaires that are differentiated according to the activity (about 50), and then customized by each user according to the particularities of his or her organization.

• • They are divided into 7 categories that cover all the regulatory items, using an intuitive approach.
  • Once the information is entered, the tool automatically allocates it to the regulatory items of the 3 scopes (or 6 categories if ISO 14 064-1), according to the EFs used

GCI is a collaborative platform:

• • The main user can add other users allowing them to participate in the input, with different levels of authorization.
  • To facilitate the communication of all operators, present and future, it is possible to enter an internal comment at the level of each question of the declaration.

Thus, the users of the same client account communicate with each other and intervene on the same balance sheet according to their respective competences and naturally creates a collective memory of the entries facilitating later searches for the location of the data

📊 Balance sheet calculation and analysis

Carrying out a Carbon Inventory® allows you to define an effective path for reducing your carbon footprint in the most important areas.

It also allows us to question the company's economic and commercial model, its net efficiency, and its social utility in a low-carbon world.

The identification phase of the emission sources is therefore a key step in the realization of the assessment, and must be as exhaustive and transparent as possible.

The approach to GHG accounting and reporting via GCI is based on 6 principles:

1. Consistency in the use of methodologies that allow meaningful comparisons of gases emitted over time
2. The accuracy of the quantification of the emitted gases
3. The exhaustiveness of the consideration of all the positions in accordance with the regulations.
4. Relevance of the GHG statement to the organization's business sector
5. Transparency of assumptions and information sources used for clear decision making
6. Verification of reliable results.

They are the result of a collaborative process that involves diverse parties representing a wide range of technical, environmental, scientific and accounting disciplines.

📉 The development of a reduction plan

Once this phase of identification of emission sources is completed, they will be analyzed to identify the most polluting activities of the company.

It is during this stage that a plan of action to reduce emissions begins to take shape.

➡ This plan is a key element in steering the decarbonization of the business. In particular, it will serve as a roadmap and establish short, medium and long-term reduction targets to be met.

It will also make it possible to monitor and steer the measures implemented to best meet the challenges of the Paris Agreement.

GCI assists the organization in the development of its reduction plan and simplifies this process through 4 key actions:

1️⃣ Provision of a catalog of ideas for reduction measures in relation to the sector of activity

2️⃣ Provision of a catalog of reduction measures defined at the time of the elaboration of the assessment

3️⃣ Simulation of potential impacts of reduction measures to make the right decisions

4️⃣ Monitoring and steering of the SBT (Science Base Target) or SNBC (National Low Carbon Strategy)trajectory

✅ The online publication

Since June 2011, within the framework of the Grenelle II Law of July 12, 2010, a method and a regular publication of their GHG inventory® are required for the various eligible companies:

• • Companies with more than 500 employees - 250 for overseas departments,
• • Communities with more than 50,000 inhabitants
• • Other legal entities of public law with more than 250 employees.

Eligible companies are obliged to publish every 4 years, while eligible local authorities and other legal entities of public law have an obligation to update and publish every 3 years.

How do you choose a reliable solution for your Carbon Footprint/Inventory?

To guide companies in this choice, the Association of Professionals in Energy and Climate Consulting (APCC), has written a reference note containing advice, as well as questions to ask, to help them make an informed choice and take action. We have summarized them.

As a member of the APCC, GCI takes great care to ensure that each of their recommendations are fully complied with.

• • Find out the nature of the activity data in order to obtain a Carbon Footprint that is the most representative of the reality of the company'scarbon footprint.
• • Verify that the "carbon bases" used by the Carbon Footprint solutions are proven.
• • Determine the level of detail needed to most accurately measure the results of the measurements and to understand in detail the most significant items.
• • Ensure the transparency of the solution by having access to raw data and calculation assumptions
• • Ensure that updates and maintenance are done on a regular basis