Sales and Fulfillment
Setting bold emission targets to reduce corporate carbon footprint
To achieve the Paris Agreement target on reducing global greenhouse gas (GHG) emissions and reaching a net-zero economy, countries and companies are aiming to converge on the 1.5°C target. Moreover, awareness among investors is adding pressure on companies to define clear climate change mitigation strategies. One of the ways to decrease the environmental impact of businesses is by monitoring and reducing the corporate carbon footprint.
What is corporate carbon footprint?
A carbon footprint is the total greenhouse gas emissions caused directly or indirectly by a person, an organisation, an event or a product. Thus, the impact of your business on the environment is its corporate carbon footprint. Corporate carbon footprint considers carbon emissions under three categories of direct and indirect emission ‘scopes’ defined by the GHG Protocol.
Monitoring and reducing the corporate carbon footprint of a business is crucial to planning a green business strategy that is sustainable in the long run.
Business benefits of reducing carbon footprint
The case for reducing carbon emissions has become increasingly compelling. In 2021, more than 13,000 corporate disclosures representing 64% of global market capitalisation were recorded by CDP, a non-profit organisation that promotes environmental disclosures.
Let’s look at the advantages of reducing carbon footprint:
- Rising energy costs and supply volatility necessitate energy savings.
- Mandatory reporting in many regions requires companies to calculate, monitor, and report their carbon footprints.
- A growing number of businesses have included emission reduction targets as a part of their future strategies and CSR programmes.
- Reducing carbon footprint benefits the business’ brand value as more and more consumers and investors look for environmental transparency in their transactions. In 2021, CDP received requests for corporate carbon footprint data from over 590 investors with over US$110 trillion in assets.
- It is critical to meet the GHG emission reduction target to limit global warming well below 2°C, and ideally closer to 1.5°C, as lately agreed by G20 countries, in a language stricter than the 2015 Paris Agreement. Failing this, the social, economic, and individual impacts will affect life on earth as we know it now.
How to calculate carbon emission reduction?
To reduce carbon footprint, you need to map the processes that add to it and then mitigate them:
- Decide the method:
- Define the scope:
- Collate the data:
- Apply emissions factors:
- Monitor your emissions reductions:
Employ a consistent method to calculate the accurate carbon footprint. The GHG Protocol and ISO 14064 standard are among the more popular ways to arrive at your corporate carbon footprint.
Set a clear and transparent organisational scope for calculating the carbon footprint.
Gather relevant data within the defined scope to calculate the corporate carbon footprint accurately.
Carry out the final calculation by multiplying the activity data by standard emission factors. After detailed analysis, express the activity in KPIs for monitoring.
Monitor the carbon footprint year on year to know if your efforts to reduce carbon emissions have been successful.
How are companies reducing their carbon footprint?
Right from product design to end of life, businesses can improve their sustainability standards and reduce their carbon footprint across the entire value chain in the following ways:
- Product design and packaging:
- Sustainability of inputs and suppliers:
- Efficient use of operational resources: Analyse ways to recycle and reuse resources like by-products, water, and waste.
- Optimisation of the supply chain network:
- Adoption of circular economy models:
- Implementation of AI-based technology and analysis:
Reduce the company’s environmental footprint, including the footprint of its supply chain through creative product design. Moreover, changing packaging and cube utilisation can lower your carbon footprint.
Use raw materials having a favourable environmental footprint. Benefits of reducing carbon emissions using renewable energy sources include lesser power volatility and better energy savings in the long run. You can also reduce your carbon emissions by favouring suppliers that prefer renewable sources for raw materials, natural resources, and energy.
GHG emissions from supply chain operations are five times greater than those from direct operations. Redrawing and optimising the supply chain and logistics can reduce the environmental impact of businesses. Increased localised sourcing is one such example.
Look for opportunities to turn waste to value wherever possible, from repurposing waste and used resources to recycling content to generate new packaging.
AI and machine learning can provide deep insights into several aspects of your business’ carbon footprint and help identify cost-saving ways to reduce carbon emissions. It can monitor emissions and identify improvements along the supply chain. Using AI-based carbon analysis enables businesses to forecast future emissions and take strategic decisions to meet sustainability targets.
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How can Infosys BPM help?
Infosys BPM has extensive experience in process mapping, domain knowledge, data analytics, and cutting-edge business intelligence, which assists enterprises in:
- Ascertaining baseline data from multiple resources and secondary research
- Taking corrective actions based on insights from data analytics
- Improving operation efficiency to reduce carbon emissions through recommended measures
View Infosys BPM carbon footprint analytics offerings that provide concurrent support through technology solutions to keep you on top of new challenges in reducing your corporate carbon footprint.