One expectation we often encounter when conducting Greenhouse gas inventories for companies is the desire to compare their organizations’ calculated carbon footprint with other companies, especially competitors. It is completely natural – to better understand whether the carbon footprint is large or small and how it measures up against others in their industry.
While we commend any company that takes the first and vital step in mapping and understanding their climate impact, it’s important to note that a company’s carbon footprint cannot always be directly compared to another, even if they operate in the same sector, with similar business models and production volumes. Let’s dive into why that is.
Different Scopes and Categories
Each company conducting a GHG inventory can choose which scopes and categories to include in their emissions calculations. Usually, Scope 1 and Scope 2 are mandatory but Scope 3 is often voluntary. If one company reports only Scope 1 and Scope 2 emissions, while another includes Scope 3 emissions as well, it becomes challenging to make an apples-to-apples comparison. Excluding certain categories, such as emissions from the supply chain or waste management, can significantly affect the total carbon footprint. While companies can tailor their GHG inventories to specific scopes and categories, it’s important to keep this in mind when comparing results with others.
Fluctuating Emissions
A company’s carbon footprint can fluctuate significantly from year to year, depending on various factors such as changes in production volume. A company might also make large investments in new equipment, and the GHG impact of these investments is allocated to the year of purchase. Even though the equipment may be used for decades, the emissions from that year’s GHG inventory may appear inflated due to the investment.
Different Calculation Methods
Companies may use different calculation methods derived from the GHG Protocol, such as the “spend-based” method or the “operational-based” methods. These methods can lead to vastly different results because they address emissions sources and calculations in different ways.
Data Quality and Emission Factors
The quality of available data can vary, which directly affects the accuracy of emissions calculations and complicates comparisons across companies. Moreover, the final results are heavily influenced by the emission factors used – how geographically and temporally relevant and precise they are can vary significantly.
Data Confidentiality
Some companies may choose not to share all the details of their GHG inventories, and present total emissions without giving any details about what is included and what is not, especially if they are not required to do so by regulations. Incomplete reporting or confidentiality concerns can further complicate comparisons and result in uninformed assumptions.
Why It’s Still Worth Reading Other Companies’ Sustainability Reports?
Despite these challenges, reading sustainability reports of other companies operating in the same sector, which often include the results of their GHG inventory, is still very valuable:
- Percentage comparisons: Instead of comparing absolute numbers, you can focus on what percentage of emissions come from different scopes and categories for comparison.
- Best practices and strategies: Reviewing other companies’ reports can offer insights into the measures they are taking to reduce GHG emissions, potentially offering ideas for optimizing your own operations.
- Future goals and strategies: Many reports include information about future goals, such as carbon reduction targets and planned initiatives. These can serve as inspiration when setting goals for your company.
If you want more information or help with the calculation of your organization’s GHG, leave us your contact via the form below!
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