Climate change, caused by anthropogenic factors, is currently one of the most important environmental problems. Governments, non-governmental organizations and industry and business representatives are therefore undertaking initiatives to reduce greenhouse gas emissions, as well as activities that include continuous monitoring, reporting, verification and forecasting of the effects of climate change. There has also been a search for tools that would determine the environmental impact of a product. Thus, the idea of a carbon footprint was born.
The term “carbon footprint” is used to calculate the total greenhouse gas emissions during the full life cycle of a product (enterprise) . It is expressed as carbon dioxide equivalent per functional unit of the product (CO2e/functional unit).
The carbon footprint, along with the water footprint, is also part of the environmental (ecological) footprint. The latter is nothing more than an analysis of human demand for natural resources. In this case, human consumption of natural resources is compared with the planet’s ability to regenerate them. The environmental footprint is the estimated number of hectares of land and sea area needed to compensate for resources consumed in consumption and waste absorption. It is measured in global hectares (gha) per person.
The first country to start counting the carbon footprint for products and even entire companies was the United Kingdom. And no wonder, since emissions in that country were far exceeding standards. British entrepreneurs initially decided to calculate the value of the carbon footprint, and then – having a measurable indicator – they reduced their emissions and watched their progress.
Why calculate a carbon footprint?
Entrepreneurs all over the world – including in Poland – decide to calculate the carbon footprint for various reasons. Currently, it is primarily the market that forces them to do so. Entrepreneurs, working with international companies (mainly from the UK), are even obliged to calculate the carbon footprint for their operations or products.
Most Polish companies learn about the existence of this indicator from their Western counterparts, who send requests for quotations, which include the question of the product’s carbon footprint. A Polish company, wishing to participate in a tender, must therefore count the carbon footprint value for a particular product.
There is also a growing trend among companies – mainly British – showing that the value of a product’s carbon footprint is more important than the price at which they can purchase the product.
A second, important reason for calculating the carbon footprint is the compulsion to report to the Carbon Disclosure Project (CDP). This is an international not-for-profit organization that has created a global system for companies and cities to calculate, disclose, manage and share their overall information on the topic of environmental performance. CDP works across all sectors to motivate businesses to take pro-environmental action and share their achievements in reducing greenhouse gas emissions.
However, CDP enjoys extremely different opinions among entrepreneurs. Some feel noticed and honored to be able to publish their data, while others perceive the organization’s inquiries as propaganda and inappropriate coercion to disclose information that constitutes company secrets. This is negatively perceived by both contractors and the public.
According to the assumptions
Another reason for calculating the carbon footprint is corporate social responsibility reports and non-financial reporting. According to the assumptions, being responsible does not only mean that business organizations meet all formal and legal requirements, but in addition to that, it also means increased investment in human resources, in environmental protection and in relations with stakeholders who can have a real impact on the efficiency of these organizations’ business activities and their innovation.
Hence, businesses that report on their sustainability strategies are placing increasing emphasis on environmental aspects. The carbon footprint is the most reliable, measurable and international tool that gives comparable results of companies from all over the world, operating in the same industries.
The aftermath of mandatory non-financial reporting and strategy-making was the emergence of the Respect Index. It is the first index of the most socially responsible companies of the Warsaw Stock Exchange in Central and Eastern Europe, introduced in 2009. The Respect Index includes Polish and foreign companies on the Main Market operating according to the best management standards in corporate governance, information and investor relations.
It also takes into account environmental, social and labor factors.
Carbon footprint? It’s not art for art’s sake
As mentioned earlier, the carbon footprint can be calculated both for a company and for a specific product. In both cases, the methodology is the same, but other elements are taken into account in the calculation (depending on the processes involved).
Companies around the world, including in Poland, choose to calculate the carbon footprint mainly for a specific product, rather than for the whole company. This is due to the desire to increase the competitiveness of the goods they produce and the demand of contractors.
The essence of calculating a carbon footprint for a product is that it becomes more attractive from the point of view not only of environmentally friendly environments, but also of the entrepreneur who uses the product in his production processes.
If the purchased product has a lower carbon footprint than its competitors, this indicates the responsibility of the manufacturer, who wants to simultaneously protect the environment and optimize the company’s processes. An important aspect is that counting the carbon footprint is not art for art’s sake. It carries with it many opportunities for development, improving energy efficiency in the company and taking a broad view of the company as a whole, rather than a collection of separate departments.