What is a carbon footprint?
A CO2 balance or greenhouse gas balance is the systematic balancing of greenhouse gas emissions. This involves looking at all greenhouse gases with a relevant impact on the climate. These were set out in the Kyoto Protocol and you will find the list further down on this page.
Although more greenhouse gases than justCO2 are considered, the term "carbon footprint" is used because carbon dioxide is used as a uniform reference value for all greenhouse gases included. Other greenhouse gases are converted into CO2 equivalent in order to establish comparability. CO2 is therefore assigned a global warming potential of 1. Greenhouse gases with a higher impact, such as methane, are assigned a higher global warming potential.
This means that all emissions in a carbon footprint are always stated in CO2 eq, which makes comparability much easier.
The question "What is a carbon footprint?" should be easy for your energy or CO2 management to answer. We will be happy to explain to you why many companies are now obliged to draw up a carbon footprint and what steps are necessary to do so! Find out more about the current EU directives on our knowledge page on ESG and CSRD.
What does a carbon footprint offer a company?
A carbon footprint provides transparency about the distribution of emissions in the company and is therefore the basis for measures to create and improve a climate strategy.
Greater transparency in the CO2 footprint of companies is becoming an increasingly important factor in the economy. On the one hand, this is due to political requirements that demand CO2 emission reports from companies in the form of new reporting obligations (such as the CSRD), and on the other hand, large corporations that require their suppliers to provide information on their greenhouse gas emissions.
Companies that already have broad transparency can benefit from a clear competitive advantage here. Investors are increasingly using a company's carbon footprint as a factor, and a climate-conscious company can also present itself better on the labor market.
Knowing greenhouse gas-intensive processes and making savings there can also lead to cost reductions; emission drivers are often also cost drivers. It is therefore definitely worth improving your CO2 balance.
Do you need a carbon footprint?
What types of carbon footprint are there?
Two types are currently particularly relevant for industry: PCF & CCF. The PCF is the "Product Carbon Footprint" and records the greenhouse gas emissions of a product throughout its entire life cycle. The CCF is the "Corporate Carbon Footprint" and includes all greenhouse gas emissions that occur at company level.
Corporate carbon footprint
The corporate carbon footprint includes the greenhouse gas emissions of a company at different levels. The scope of such a balance sheet is defined by the so-called scopes. Scopes are different emission categories: Scope 1 shows the direct emissions, Scope 2 the energy-related emissions and Scope 3 the indirect emissions upstream and downstream of the processes. Where exactly the boundaries lie and how a meaningful delineation is possible is decided on a case-by-case basis.
CCFs are often drawn up as part of the preparation of a sustainability report. They are also part of a transformation concept.
They are prepared in accordance with various standards. The most important is the Corporate Accounting and Reporting Standard in the GHG Protocol. The GHG Protocol's series of standards for recording greenhouse gas emissions sets the global benchmark for a corporate balance sheet. There is also the DIN EN ISO 14064-1 standard.
At the beginning of an assessment, the objectives and framework conditions as well as the scope are defined. This is known as defining the system boundaries. Data collection then begins, whereby activity data and emission factors must be collected or researched. These are then used to calculate the emissions and assess the data quality, which can vary enormously. At the end, the results are summarized in a CCF report and can be used.
Product Carbon Footprint
The product balance is more complex than the CCF, as a balance is drawn up for each individual product and the entire life cycle. Services are also to be understood as products.
Within the GHG Protocol, there is the Product Life Cycle Accounting and Reporting Standard, which provides the framework for a PCF. There is also an ISO standard here, EN 14067.
A PCF is based on the typical five phases of a product's life cycle:
1. raw material extraction
2. production
3. distribution and storage
4. use
5. disposal
There are two ways of carrying out a product carbon footprint, cradle-to-gate and cradle-to-grave. In the former, only the emissions that occur "up to the factory gate" are accounted for. This only includes the first two life cycle phases.
Cradle-to-grave accounting is more comprehensive. Here, the emissions from distribution and use as well as disposal of the product are also accounted for.
CO2 balance as part of a transformation concept
A corporate carbon footprint is part of a so-called transformation concept. A transformation concept or climate strategy is a plan of action that is drawn up to achieve climate neutrality for a company.
Market and government requirements can quickly become a challenge for companies.
Factors such aCO2 transparency and a focus on climate targets can become the basis for decisions when awarding contracts.
To ensure that you as a company remain competitive in the future, you should prepare for these requirements now. We will be happy to accompany you from A to Z on your path to climate neutrality!
Further information
Greenhouse gases that contribute to climate change and are recorded (measured in CO2 equivalents) in a carbon footprint:- Carbon dioxide (CO2)
- Methane (CH4)
- nitrous oxide (N2O)
- Halogenated hydrofluorocarbons (HFCs)
- hydrofluorocarbons (HFCs)
- sulphur hexaflouride (SF6)
What are GHG scopes? | Scope 1, 2 and 3 for your company's carbon footprint
If you are not yet familiar with the basics of Scopes 1-3 and the Greenhouse Gas Protocol, you can close this knowledge gap directly by watching our explanatory video on YouTube: