A call for a Net Zero economy
As outlined by the 2015 Paris Climate Agreement and reinforced by the more recent COP 26 Glasgow Climate Pact, reducing carbon footprint is one of the core challenges that companies across the world are called to face in order to mitigate and hopefully reverse the threatening effects of climate change and meet the Agenda 2030 Sustainable Development Goals. Net Zero emissions has been recognized as one of the most effective targets to drive companies’ climate strategies, in line with the most ambitious climate policies such as the EU Green Deal or the UK 2050 Net Zero Strategy.
The sixth IPCC report in 2021 unfolds a dramatic last call for a quick and mandatory cut to carbon emissions within all human activities in order to keep global warming behind the 1,5 degree Celsius tipping point.
At company level, committing to an effective carbon management plan aiming to measure, manage and reduce GHG emissions is an innovative solution, contributing to a global Net Zero Economy, ensuring business resilience, climate compliance and transparency for all the stakeholders.
How to calculate company carbon footprint and become a carbon neutral business
Carbon neutrality and Net zero emissions both refer to neutralizing the balance of GHG emissions released into the atmosphere but these goals are different when it comes to system boundaries, delivery time horizon and carbon reduction strategies.
A business carbon footprint is the sum of the GHG emissions released by a company along its value chain. The list of emissions sources along the company activities and processes is called GHG inventory and the resulting emissions are measured in CO2 equivalent (CO2e), a standard conversion unit which takes into account the different global warming potentials (GWP) of the different greenhouse gases.
The most recognised standards for business carbon footprint are ISO 14064 released by the International Organization for Standardization and the GHG Protocol Corporate Standard of the World Resources Institute (WRI). ISO 14064 is based on the GHG Protocol, therefore the two standards outline very close guidelines.
According to ISO 14064-1 standard, the mandatory emissions a GHG inventory must include are the direct emissions released by the sources controlled by the organization (Scope 1 emissions) and the indirect emissions embodied in the production of the purchased electricity and heat (Scope 2 emissions). A third category of indirect emissions released along its value chain but outside the organization boundaries can be voluntarily included in the company carbon footprint GHG inventory (Scope 3 emissions).
A company can become carbon neutral in the short term applying a two step strategy including:
- Measuring the carbon footprint of Scope 1 and Scope 2 emissions
- Offsetting the carbon footprint by purchasing carbon credits.
Offsetting the carbon footprint through internal carbon reduction projects represents a more complex and mid-long term solution but it contributes, together with the Scope 3 emissions reduction, to the more ambitious goal of net zero emissions by effectively reducing carbon emissions and potentially removing emissions from the atmosphere by carbon positive projects.
This last approach underlines the 2050 Net Zero goals included in the EU Green Deal and the UK climate strategy that require all GHG emissions produced by human activities to be removed and makes carbon trading rather a short term and less preferable option.
Private businesses play a driving role for the transition towards a net zero economy as they can influence emissions reductions all along the value chain by reducing their supply chain carbon footprint through a supplier’s selection and promoting the behaviour change of their customers by applying more sustainable business models.
Net zero emissions is a high impact strategic goal which can ensure resilience and company success on a long term horizon, together with anticipating upcoming emissions compliance requirements and climate finance macrotrends.
Carbon management with NUVA
NUVA supports forward thinking businesses in reaching their net zero emissions goals through the complete tailored path or facilitating the improvement of specific carbon management challenges.
A complete company net zero roadmap unfolds along the following phases:
- Measuring company carbon footprint according to ISO 14064-1 (or GHGP) and identifying most carbon intensive areas across the value chain;
- Benchmarking the results against sectorial, geographical and dimensional staples;
- Evaluating the compliance performance regarding current and upcoming carbon management requirements through a tailored policy analysis;
- Set a company goal for GHG emissions performance such as a Science Based Target, carbon neutrality or net zero emissions including Scope 3 emissions sources;
- Setting a funding strategy and budget;
- Evaluating GHG emissions abatement projects financial viability through Marginal Abatement Cost Curve (MACC), Net Present Value (NPV) approaches and climate finance access plans;
- Reporting about the carbon management performances through the best international standards to enhance transparency and stakeholders satisfaction.
NUVA also supports organizations through assurance and verification of company carbon footprint, product carbon footprint and emissions reduction projects.