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What is a carbon footprint?

The carbon footprint is the amount of carbon dioxide produced by the activities of individuals, entities (like companies and organizations) and communities. It includes so-called “direct emissions” - those created by combustion of fossil fuels in manufacturing, heating/cooling and transportation - as well as emissions required to produce the electricity associated with goods and services consumed. It derives from the principle of ecological footprint - the total area of land required to sustain an activity or population - and measures environmental impacts, such as water use and the amount of land used for food production.


Many different factors are considered when attempting to measure a company’s carbon footprint, including:

  • Whether the company uses fossil-fuel based means of transport for logistical purposes;
  • What sources of energy a company uses in heating and cooling offices, plants and other facilities and whether that electricity/energy is generated from renewable energy sources or not;
  • Whether energy efficient lights are used in offices and other company facilities;
  • The amount of insulation in a company’s buildings.


The “size” of a company’s footprint varies depending on many factors. For example, all other things equal, a company that uses petrol-powered trucks will create a larger carbon footprint than one whose logistics are handled via vehicles powered by batteries and/or green-hydrogen (hydrogen produced using renewable energy).

What is the difference between Product Environmental Footprint and Organization Environmental Footprint?

When talking about carbon footprint generated by companies and organizations, one needs to distinguish between product environmental footprint and organization environmental footprint.

What is the difference between the two? Product environmental footprint allows measuring the amount of greenhouse gasses (GHG) emitted in the production cycle of a product or service, while organization environmental footprints measure the impact of the entirety of an organization’s GHG-producing processes.

When measuring product environmental footprint, the following aspects are considered:

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  • Upstream processes - the amount of GHG emitted by the extraction and production of input materials and their transport;
  • Core processes - the amount of GHG emitted during production of the final product, including factory/production energy use;
  • Downstream processes - the amount of GHG emitted during distribution and stocking of a product, as well as during its use and end-life.


In terms of measuring organization environmental footprint, emissions are considered in terms of one or more of the following “scopes”:

  • Scope 1 - Direct emissions, for example from stationary and mobile combustion, process emissions and land use emissions;
  • Scope 2 - Indirect emissions from imported energy (for example, electric energy, steam, heat, compressed air);
  • Scope 3 - Other indirect emissions, for example those resulting from production and transportation of raw materials, product distribution, waste management and employee transfers.

Does carbon footprint cause climate change?

The impact a company’s carbon footprint can have on the climate is directly proportional to its size: the larger the footprint, the larger the impact.


So does having a carbon footprint cause climate change?


Considering that a company’s carbon footprint in large part reflects its greenhouse gas (GHG) emissions - which are generated principally by burning fossil fuels and are considered most responsible for heating the planet - the simple answer is: yes. The more companies use fossil fuels for things like power generation, transportation, heating and cooling offices and plants, and production processes, the more CO₂ is released into the atmosphere. 



The process driving the energy transition for a sustainable world

But how does carbon affect climate change? The mechanism is simple: carbon-emitting fossil fuels like coal and oil contain carbon that plants removed from the atmosphere through photosynthesis over a period of millions of years. Through human activities, that carbon is reentering the atmosphere in a much shorter time frame. As carbon dioxide levels continue to increase in the atmosphere, this leads to negative environmental impacts including increased ocean acidification, rising sea levels and - from a merely climate perspective - more intense droughts and monsoons, as well as more frequent and intense storms.

How to reduce carbon footprint for a company?

Depending on what sector they operate in - energy, industry, services, power generation and distribution - companies generate carbon footprints of various sizes, just like people. And just like people, companies can take steps to decrease their carbon footprints.


How can companies reduce carbon footprints generated by their activities? A first - and perhaps the most obvious - step concerns energy sourcing. By switching from high greenhouse gas (GHG) - emitting fossil fuels like coal, oil and natural gas to renewables like solar, wind and hydroelectric, companies can make a big dent in their carbon emissions, reducing their carbon footprint.


Following are some other tips for companies on how to reduce carbon footprints:

  • Recycle and reduce waste as much as possible;
  • Use web-based communications in place of traditional mail;
  • Reduce air travel by using alternative methods of travel and web-based tools for communication and tele-conferencing;
  • Reduce fossil-fuel based transport;
  • Set GHG emission targets along the entire supply chain in order to encourage suppliers to reduce their own emissions and monitor suppliers’ progress in meeting targets;
  • Invest in energy efficiency in terms of building materials, heating and cooling solutions, etc.;
  • Be transparent in communicating GHG emission reduction targets and publish results of their efforts in clear, easy to understand ways.

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