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What is a carbon footprint?

ACO2 balance or greenhouse gas balance is the systematic balancing of greenhouse gas emissions. It considers all greenhouse gases with a relevant impact on the climate. These were recorded in the Kyoto Protocol and you will find the list further down this page.

Although more greenhouse gases than justCO2 are considered, it is referred to as aCO2 balance because carbon dioxide is used as a uniform reference value for all greenhouse gases included. Other greenhouse gases are converted intoCO2 equivalents to ensure comparability.CO2 is therefore assigned a global warming potential of 1. Greenhouse gases with a higher impact, such as methane, are assigned a higher global warming potential.
Thus, all emissions in aCO2 balance are always given inCO2 eq, which significantly simplifies comparability. 

The question "What is aCO2 balance?" should be easy for your energy orCO2 management to answer. We would be happy to explain why many companies are now obliged to prepare aCO2 balance and what steps are necessary to do so! Find out more about the current EU directives on our knowledge page on ESG and CSRD.


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What does a corporatecarbon footprint offer? 

Acarbon footprint creates transparency about the distribution of emissions in the company and is thus the basis for measures to create and improve a climate strategy.
More transparency in theCO2 footprint of companies is becoming an increasingly important factor in business. On the one hand, due to political requirements that demand reports onCO2 emissions from companies with new reporting obligations (such as the CSRD), and on the other hand, large corporations that demand information on their greenhouse gas emissions from their suppliers. 

Here, companies that already have a broad transparency can benefit from a significant competitive advantage. Investors are increasingly considering a company's carbon footprint as a factor, and a climate-conscious company can also present itself better on the labor market. 

Knowing greenhouse gas-intensive processes and making savings there can also lead to cost reductions; emission drivers are often also cost drivers. It is therefore worthwhile to improve yourcarbon footprint in any case.


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What are the different types of carbon footprint?

Currently, two types in particular are relevant for the industry: PCF & CCF. The PCF is the "Product Carbon Footprint" and records the greenhouse gas emissions of a product along its entire life cycle.
The CCF is the "Corporate Carbon Footprint"also known as the corporate carbon footprint, and includes all greenhouse gas emissions that occur at the corporate level. 

Corporate Carbon Footprint

The corporate balance sheet covers the greenhouse gas emissions of a company at different levels. The scope of such a balance sheet is defined by the so-called scopes. Scopes are different categories of emissions: Scope 1 shows direct emissions, Scope 2 energy-related emissions and Scope 3 indirect emissions upstream and downstream of processes. Exactly where the boundaries lie and how a meaningful delineation is possible is decided on a case-by-case basis.

CCFs are often prepared as part of the preparation of a sustainability report. They are also part of a transformation concept.
They are prepared according to different standards. The most important is the Corporate Accounting and Reporting Standard in the GHG Protocol. The GHG Protocol's series of standards for recording greenhouse gas emissions sets the global benchmark for a corporate balance sheet. There is also the DIN EN ISO 14064-1 standard. 

At the beginning of a balancing process, the objectives and framework conditions as well as the scope are first defined. This is called the definition of the system boundaries. Then the collection of data begins, whereby activity data and emission factors must be collected or researched. These are then used to calculate emissions and assess the quality of the data, which can vary massively. At the end, the results are summarized in a CCF report and can be used.

Product Carbon Footprint

The product balance is more complex than the CCF, since a balance sheet is drawn up for each individual product and the entire life cycle. In this context, services are also to be understood as products. 

Within the GHG Protocol, there is the Product Life Cycle Accounting and Reporting Standard, which defines the framework of a PCF. Here, too, there is an ISO standard, EN 14067.
A PCF is based on the typical five phases of a product's life cycle:
1. Extraction of raw materials
2. Production
3. Distribution and storage
4. Use
5. Disposal

There are two variants of the execution of a Product Carbon Footprint, Cradle-to-gate and Cradle-to-grave. In the former, only the emissions that occur "up to the factory gate" are accounted for. This only includes the first two life cycle phases.
Cradle-to-grave accounting is more comprehensive. Here, emissions from distribution, use and disposal of the product are also accounted for.

CO2 balance as part of a transformation concept

A Corporate Carbon Footprint is part of a so-called transformation concept. A transformation concept or climate strategy is an action plan that is drawn up to achieve climate neutrality for a company.

Market and government requirements can quickly become a challenge for companies.
Factors such asCO2 transparency and an orientation towards climate targets can become the basis for decisions when awarding contracts.
To ensure that you as a company remain competitive in the future, you should prepare for these requirements now. We will gladly accompany you from A to Z on your way to climate neutrality!

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More information

Greenhouse gases that contribute to climate change and are recorded (measured inCO2 equivalents) in acarbon footprint:

What are GHG Scopes? | Scope 1, 2 and 3 for the carbon footprint of your company

If you don't know the basics around Scopes 1-3 and the Greenhouse Gas Protocol yet, fill this knowledge gap directly by watching our explainer video on YouTube: 

To the video