Why you should take this step

To achieve carbon neutrality – balancing your greenhouse gas (GHG) emissions with reductions and offsets – you need to know your starting point. That starting point is your baseline. Greenhouse gas accounting is the foundation for every other aspect of your carbon neutrality program, and this complex and time-consuming process should not be underestimated.

Questions on your mind

  • Who should be responsible for GHG accounting?
  • How are carbon emissions calculated?
  • What data does my company have available?
  • How do we start collecting missing data?
  • How do we validate and improve data?

How to calculate your carbon footprint

Calculating your carbon footprint involves multiplying your activity data by an emission factor. Once you’ve calculated your carbon footprint, an external partner can scrutinize your baseline. This review will highlight what activity data still needs to be collected, how you can collect that data and which emission factors to assign.
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Activity data x Emission factor = Carbon footprint

Sustainable Product

Activity data

Data on the activities that generate carbon emissions (e.g., the volume of electricity used to power an office building or factory, or the weight of the waste sent to recycling).

Sustainable Business

Emission factor

An estimate of the average amount of carbon emissions associated with one unit of an activity. For example, in the U.S. one MWh of electricity generates 488 kg carbon dioxide equivalent (CO2e). Recycling one kg of wood generates 0.022 kg of CO2e.

Sustainable Business

Carbon footprint

The total amount of carbon dioxide released into the atmosphere as a result of your business’ activities, calculated by multiplying your activity data by an emission factor.

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The level of detail needed to construct your carbon footprint can feel overwhelming! Do not let the complexity stop you. While mapping your emissions, you will likely discover new aspects of how your business processes work which will help you identify areas for improvement.

Assign responsibility

Accounting for your GHG emissions involves some detective work. You need to ensure your activity data and emission factors are accurate, or you risk miscalculating your footprint. If you don’t have a clear activity data owner, you need to assign responsibility for the GHG accounting process. Someone in your Environment, Health and Safety (EHS) or Sustainability department might be up for the task, but it’s most important you find someone who can gather and analyze data from various sources.
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Often activity data is captured in various parts of the organization rather than through a central repository. Investing in sustainability reporting software and setting up a regular data collection process could allow you to store all activity data in one system and to automate the carbon footprint calculation.

Emission factor databases

Unfortunately, there is not one, universally agreed upon and applied set of emission factors. Instead, a variety of factors live in different databases, such as DEFRA and EcoInvent. These databases house datasets for emissions resulting from specific processes, such as waste disposal, fuel consumption, business travel, electricity consumption and several other activities. Visit the GHG Protocol website for a useful overview of emission factor databases.
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Your choice of emission factor database can dramatically impact your carbon footprint calculation. If you work with external experts, make sure to ask which databases they base their calculations on, to ensure their approach aligns with your ambition and your previous carbon footprint calculations.
GHG accounting is always somewhat imperfect. You simply cannot know exactly how much you are emitting, but you can make the best possible estimation by using reliable activity data, valid assumptions when actual data is not available and the right emission factors.
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When it comes to collecting data, don’t let perfect get in the way of good

When it comes to collecting data, don’t let perfect get in the way of good

- Chris Berkhout, Sustainability Data Analyst

Things to consider

  • Expect various measurement units if you operate globally.
  • Local utilities may send a total energy bill, not the breakdown by energy source.
  • Shared facilities may not have meters to show individual business consumption.
  • You can create emission factors for specific activities if the standard factors don’t suffice – but thoroughly document your assumptions!

Our approach

We realized there was no magic trick to acquiring new activity data – we needed to engage departments across our business and implement a reliable data collection process. We worked together with an external partner to construct and validate our carbon footprint, and we used their expert knowledge to align our reporting practices with global standards.
The LM Wind power Way

Our activity data

For years, we've published our carbon footprint as part of our annual Sustainability Report, collecting data directly from our factories and offices through an online sustainability reporting software (SoFi). Our carbon neutrality pledge compelled us to collect data for activities we had never tracked (such as material transport from suppliers to our factories). For areas where we lacked data, we worked with our external partner to create validated estimations.
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Try to improve your reporting every year. If you initially estimate the emissions from an activity, try gathering actual activity data the next year. If you suspect data is incomplete or inaccurate, work with the people collecting the data and aim for stronger data in the future.
The LM Wind power Way

Our emission factors

Selecting our emission factors became the greatest, unexpected challenge along our carbon neutrality journey. The emission factors included in our SoFi system were different than the ones used by our external partner. Thus, we had two significantly different in-house carbon footprint calculations. We spent considerable time and effort figuring out exactly where the emissions factors varied, why they differed and which ones to choose going forward. This misalignment was an unexpected part of our carbon neutrality journey, which we hope you can learn from and avoid!

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