Company CO2 Emission Calculation – Where to Start?

Companies are focusing on CO2 emission calculations as buyers, consumers, financiers, and regulatory bodies demand these data. Biocode is a carbon footprint calculator for companies to calculate greenhouse gas emissions according to the GHG Protocol. It divides emissions into three scopes and supports both consumption and activity-based calculations, required for reporting major emission sources.

Global fintech giant Euronet to the small Finland-based Anton & Anton are among the companies that have used Biocode to calculate their emissions. We’ve noticed that certain questions recur in calculations regardless of company size. We’ve compiled these common questions and their answers here! If you have further questions, contact us and we’ll explore them together!

Where should a company start with CO2 emission calculation?

Understanding the company’s operations is crucial before deciding what data to collect and what to calculate. One must also choose the platform for performing the calculations. According to the GHG Protocol, setting objectives and defining the organizational scope are critical first steps:

1. Objectives: What the calculation aims to achieve. Are the results used, for example, to define SBTi goals, or is it just to get a rough overview of the company’s emissions for internal development?
2. Organizational Scope: How company operations are examined. Options include operational and financial control and ownership interests. Organizational scope affects which Scope category, for example, emissions from leased property are calculated. For conglomerates, organizational scope also affects how emissions are distributed between parent and subsidiary companies.
3. Scope: What aspects are included in the calculation. A materiality analysis is used as a tool to identify the company’s most significant emission sources. Under CSRD reporting, a double materiality analysis is required, identifying the most significant impacts caused by the company and the factors that affect its operations.

How detailed should the data collection be?

Before starting the calculation, a materiality analysis should be conducted to identify the most critical operations for the company’s core business and the most significant sources of emissions. Decisions on which operations data is collected from and what can reasonably be excluded from the calculation are based on the results of the analysis.

The GHG Protocol recommendation is that, especially in the first calculation, data should be collected as comprehensively as possible. With a more comprehensive understanding of the sources and amounts of emissions, it is easier to justify in the following year’s calculation if a less significant emission source is excluded.

Where should data collection start?

Data collection should begin with operations known to emit significantly, like raw materials for food companies. We recommend to prioritize the order for data collection. Data can be collected from several operations simultaneously, such as raw materials and business travel, but then the responsibility should be shared among several people.

Who should be involved in the calculation process and how should responsibilities be divided?

A project manager who coordinates the data collection and calculation processes and ensures everyone has a common understanding of the process’s progress should be appointed for the calculation project. Multiple people should participate in data collection so that those with the best understanding of, for example, where the data is located and who should collect it are involved. Distributing responsibilities also helps the project progress efficiently.

How are emissions from leased spaces, such as warehouses, calculated and to which Scope sub-category do they belong?

Emissions from electricity use, heating, and cooling of leased spaces should be included in the company’s CO2 emission calculation. Depending on the organisational scope and type of lease, emissions from leased spaces are accounted for in different Scope categories:

• Operational Control: Emissions from the energy consumption of a leased space are calculated in Scope 1 or 2, as the company is considered operationally responsible for them. For example, electricity use of a leased space is considered under Scope 2 category “Purchased Electricity.”
• Financial Control or Ownership Interests: If it is a “operating lease,” emissions from the energy consumption of the space are calculated in Scope 3 category “Upstream Leased Assets.” If it is a “finance lease,” emissions are calculated in Scope 1 or 2, as in operational control.

Can we request emission factors from, for example, raw material suppliers or logistics service providers?

We recommend to request emission factors directly from suppliers. Ensure these factors come with transparent documentation of the methodologies and standards used, along with data quality and assumptions made. This consistency and reliability are crucial for accurate calculations.

What is the difference between upstream and downstream transportation?

Upstream and downstream transportations are both third-party transportation services not involving the company’s own or leased vehicles. These third-party services are utilised for transporting raw materials and finished products, among other things. Other transportation emissions, such as those from the company’s own vehicles and business travel, fall under other Scope categories.

Upstream transportations describe the logistics services paid for by the company itself, while downstream transportations are not paid for by the company but are still part of the company’s supply chain. For example, if a company pays for the transportation of finished products to a central warehouse, but a trade central office pays for the transportation from the central warehouse to the grocery store, the first transportation is accounted for as upstream emissions, and the latter as downstream emissions.

Can we exclude discontinued business areas from the calculation next year?

Always include significant operations that emit greenhouse gases in the CO2 emission calculation. Excluding any significant operation, even if discontinued next year, is not justified.

How do we calculate transportation distances without complete supply chain data?

Make reasonable estimates and assumptions when complete data isn’t available, especially for downstream transportation, which often involves external operators.