By Luca Bisio and Judith Bielich
Not knowing where to start when facing a new project can be overwhelming. But this is how many of our clients feel when they start to calculate their carbon footprints. The biggest challenge is often the quality of the data used to measure carbon emissions – it is either not centrally available, not analysable, or missing altogether. But there is hope: you can start tackling climate change without perfect data, as long as you continually improve your data quality.
First things first: what kind of data are we talking about?
To calculate a carbon footprint, companies need activity data, ideally primary data. This includes data on energy consumption, waste, business travel and other emissions. If direct activity data is unavailable, companies can use secondary data in the form of assumptions, averages, or default values. This data is then multiplied by emission factors, usually sourced from established databases like DEFRA or ecoinvent, which provide emission values for various materials and activities. This equation is repeated for every emissions source and added together to obtain the carbon footprint.
What exactly is the data problem then?
For the large majority of sectors, the bulk of a company's emissions sit within scope 3(60-90%), meaning in the supply chain. Companies do not have direct access to this data, and many work with a large number of suppliers, even 500 or more. The effort required for a company to contact each of its suppliers and request their emissions data would quickly become prohibitive. Attempting to calculate scope 3 emissions can also reveal other issues, such as data dispersion and poor data quality.
"Done is better than perfect"
This admittedly controversial perspective from former Facebook COO Sheryl Sandberg offers a pragmatic solution to this problem. In order to achieve the goals of the Paris Agreement as quickly as possible, we just need to get started, and the first step is to create a baseline carbon footprint. We have three tips on how to do this.
Data quality doesn't need to be perfect in the first year
Companies do not need to start with only primary data. Valuable insights can also be gained from averages or expenditure-based data. These form the foundation for further analysis, and companies can then use subsequent years to refine their data. Ideally, in the longer term, data is provided directly by suppliers. This iterative approach leads to ongoing improvement in data quality and provides companies with a more accurate understanding of their emissions.
Expenditure analysis reveals emission hotspots
An analysis of a company's expenditure tends to reveal the most important emissions hotspots – the largest sources of emissions in the company. This is because expenditure shows where the company is spending most of its resources. High expenditures are often associated with energy-intensive activities, extensive supply chain interactions, or other processes that can have a significant impact on the environment. Once these areas of expenditure are identified, companies can prioritise their data collection and focus on the activities that have the greatest impact on their carbon footprint.
Unstructured data can be a catalyst for a comprehensive corporate carbon footprint
Some organisations face the challenge that their data is unstructured and scattered. They begin the transformation process by collecting and reporting this unstructured data. Only those willing to devote the resources to collect and interpret it effectively will really take ownership of their own data. This proactive approach not only leads to a comprehensive understanding of companies’ environmental impact, but also fosters improvements in areas like operational efficiency and regulatory compliance. Embracing better data management, therefore, extends beyond the carbon footprint, enriching various facets of the organisation.
Just do it – but then optimise it
For the first year of measuring the carbon footprint, these approaches help companies take the first steps towards climate action. But this is not something to rest on: with accurate primary data and the right assessment tools, you can continue to develop your climate action strategy. Improved data collection means you can track your company's emission reductions more accurately and better derive future reduction targets and measures.
We can help you to centralise and analyse scattered data. For example, the ClimatePartner Network Platform, helps to integrate your suppliers into the data collection process. You get an overview of the emissions data from your supply chain, enabling you to implement reduction strategies and start with the decarbonisation of your supply chain. Your suppliers benefit by having access to training materials, sharing their emissions data with their own customers via the software, and benchmarking against competitors.
Want to find out more about how we can help you with your carbon footprint data collection? Contact us today.