Corporate Carbon Footprint Reporting

What is Corporate Carbon Footprint Reporting?

Corporate carbon footprint refers to the greenhouse gas emissions resulting from the activities of organizations, expressed in terms of carbon dioxide equivalent (CO2e). Corporate carbon footprint reporting is the process of measuring, documenting, and disclosing the greenhouse gas (GHG) emissions produced by an organization. This includes emissions from direct operations, energy consumption, and supply chain activities.

The emissions are determined by calculating the emissions resulting from the organization’s activities in the previous year. The calculated value is expressed in “tons of CO2” units. Emission sources are evaluated in six categories in accordance with the ISO 14064-1:2018 standards.

1. Defining Boundaries/Sources: This is the first stage where the operational boundaries of the business are defined, and direct and indirect CO2 emissions are classified. From this point on, emission sources related to the company’s activities, such as production, costs, supply, and exports, will be identified, setting the first step toward the targeted carbon reduction/neutralization.
2. Data Collection: Data causing greenhouse gas emissions due to the company’s activities are collected to create an inventory.
3. Calculation: Greenhouse gas sources are calculated using emission factors and expressed in carbon equivalent terms.
4. Reporting: The calculation of the company’s carbon emissions, assumptions, and references are reported in compliance with the ISO 14064-1:2018 standard, with clarity and accuracy.

Why is Corporate Carbon Footprint Reporting Done?

Corporate carbon footprint reporting is the process of monitoring and measuring the environmental impact of a business. This reporting is essential for fulfilling environmental responsibilities, promoting sustainability, and complying with legal obligations.

Many countries have enacted laws requiring companies to report and reduce their carbon emissions. Additionally, there is an increasing demand for environmentally conscious companies from both consumers and investors, making carbon footprint reporting essential to meet these demands.

For companies, this reporting can also provide a competitive advantage, increase internal efficiency, and optimize energy consumption. Furthermore, it enables them to earn financial incentives by investing in carbon credits and environmentally friendly projects.

Transparent environmental reporting helps build trust and improves brand reputation. In conclusion, corporate carbon footprint reporting enables companies to track and manage their environmental impacts, achieve sustainability goals, and adopt an eco-friendly approach.

In summary, the purpose of corporate carbon footprint reporting is to identify carbon-intensive processes and implement strategies to reduce environmental impact.

How is Corporate Carbon Footprint Reporting Done?

Corporate carbon footprint reporting primarily aims to understand the impact of a company’s operational activities on carbon emissions.

The first step is to categorize the company’s emissions into three main categories: direct emissions (gases produced by the company itself),indirect emissions (gases produced as a result of the energy sources the company uses),and other indirect emissions (gases produced by external factors such as transportation, logistics, and supply chain). These emissions are calculated using internationally recognized standards and methodologies (e.g., the GHG Protocol).

During the reporting process, appropriate measurement tools and data collection methods are used to ensure the accuracy of the data. Companies classify their emissions and create carbon reduction strategies, outlining the steps they take to achieve these targets. Additionally, regularly updating and presenting reports to stakeholders is crucial for environmental transparency and sustainability.

Corporate carbon footprint reporting not only demonstrates an environmentally conscious approach but also helps companies comply with legal regulations and build trust with potential investors and business partners.

Carbon Footprint Data Collection and Measurement Methods

Companies collect data through energy consumption records, fuel consumption logs, and supplier reports. Common measurement tools include:

• GHG Protocol: A globally recognized framework for emission accounting.
• ISO 14064: An international standard for quantifying and reporting greenhouse gases.
• Life Cycle Assessment (LCA): An assessment of environmental impacts throughout a product's lifecycle.

Carbon Footprint Reporting Standards and Frameworks

• Global Reporting Initiative (GRI): Provides sustainability reporting guidelines.
• Carbon Disclosure Project (CDP): Helps companies manage their environmental impacts.
• Task Force on Climate-related Financial Disclosures (TCFD): Promotes the disclosure of climate-related financial risks.
• Science-Based Targets Initiative (SBTi): Aligns companies’ emission reduction targets with climate science.

Is Corporate Carbon Footprint Reporting Mandatory?

A company’s carbon footprint refers to the total greenhouse gas emissions released into the atmosphere due to its activities. In Turkey and globally, calculating the carbon footprint is not legally mandatory, but environmentally friendly practices and sustainability-focused policies and regulations are increasingly common. In many countries, especially in the European Union, companies are required to report their carbon footprints. As environmental awareness grows, many companies in Turkey are starting to calculate and reduce their carbon footprints.

Challenges in Carbon Footprint Reporting

• Data Collection Complexity: Collecting accurate data from multiple sources can be difficult.
• Lack of Standards: Different frameworks and methodologies can lead to inconsistencies.
• Supply Chain Emissions: Scope 3 emissions, influenced by multiple external factors, can be hard to track.
• Legal Changes: Compliance with evolving environmental laws requires continuous adaptation.

How is the Corporate Carbon Footprint Calculated?

Calculating the corporate carbon footprint involves an analysis of a company’s activities to determine its carbon emissions. This is typically divided into three main categories: Direct emissions (from the company’s own operations),Indirect emissions (from externally sourced energy like electricity and heating),and Other indirect emissions (from activities like transportation, supply chain, business travel). The calculation is generally based on carbon footprint calculation software or international guidelines such as the GHG (Greenhouse Gas) Protocol. The calculation may vary depending on the type of energy used, product manufacturing processes, transportation methods, and other operational activities.

Importance of Carbon Footprint Reporting

• Legal Compliance: Many governments and international bodies require carbon footprint reporting as part of climate action policies.
• Investor and Stakeholder Expectations: Transparency in emissions reporting attracts environmentally conscious investors and customers.
• Cost Savings: Identifying energy inefficiencies can lead to significant reductions in operational costs.
• Brand Reputation and Competitive Advantage: Companies that effectively reduce their carbon footprint are seen as leaders in sustainability within their industry.
• Risk Management: Understanding carbon emissions helps businesses prepare for future regulations and market changes.

Which Sectors Require Carbon Footprint Reporting?

The obligation to calculate carbon footprint is more prevalent in sectors with high energy consumption and greenhouse gas emissions. Industries such as energy production, transportation, manufacturing, agriculture, and construction significantly impact carbon emissions. In the European Union and other developed countries, large companies in these sectors are required to report their emissions. In Turkey, there is increasing demand for large companies in the industrial and energy sectors to engage in environmental sustainability reporting. Additionally, setting emission reduction targets has become an important strategy for enhancing a company’s competitive strength.

What is Turkey’s Average Carbon Footprint?

Turkey’s average carbon footprint has shown some improvement in recent years due to growing environmental awareness and a focus on sustainable development goals. However, as a developing country, Turkey’s carbon emissions generally remain high. The country’s total greenhouse gas emissions primarily stem from the energy, industry, and transportation sectors. As of 2021, Turkey's per capita carbon footprint exceeds the global average. However, efforts to address this are increasing, and various regulations are being developed to reduce emissions. In the future, carbon footprint calculation and reporting are expected to expand to include more companies and sectors in Turkey.

Future Trends in Carbon Footprint Reporting

• Digital Transformation and AI in Sustainability: Advanced AI-powered tools enhance accuracy in emission tracking.
• Carbon Pricing and Emission Trading: Governments are introducing carbon taxes and credit systems.
• Blockchain for Transparency: Blockchain technology improves carbon credit verification.
• Increasing Corporate Accountability: Stakeholders demand more transparency in sustainability efforts.

Corporate carbon footprint reporting is a crucial step for sustainability and legal compliance. Companies that proactively measure, manage, and reduce their emissions gain a competitive advantage, attract investors, and contribute to global climate action. Implementing an effective reporting strategy not only ensures compliance but also offers long-term environmental and financial benefits.