Byline: Will Jones
In the early 2000s, the dedicated work of researchers and scientists revealed that the human population was causing substantial damage to the Earth's atmosphere and its overall conditions. One of the most predominant results of this was that a hole was forming in the ozone layer. Considering that the ozone layer is a crucial part of the planet's stratosphere and plays an integral role in shielding inhabitants of the Earth from the harshest conditions of the Sun's ultraviolet radiation, this was not an ideal development.
To combat this, scientists, organizations, and governments worldwide united to reduce carbon emissions and work to reverse these effects internationally. During this time, carbon assessment became a much more vital part of every business's infrastructure. Today, carbon assessments are essential for businesses aiming to understand and reduce their environmental impact, meet regulatory requirements, and enhance their sustainability credentials.
Businesses can begin their journey toward net zero by investing in a comprehensive carbon assessment to effectively measure and manage their emissions profile.
What Is a Carbon Assessment?
A carbon assessment measures the total greenhouse gas (GHG) emissions a business or process produces directly or indirectly. It is the first step in identifying ways to reduce a company's carbon footprint, which benefits the planet, environment, and country.
In the years since the hole in the ozone layer became such a central subject, consumers have grown far more aware of environmental conditions and how big businesses contribute to them. As a result, many people now choose which brands they purchase products from or companies they work with based partly on their environmental protocols.
While some may balk at the idea that such regulations could be necessary for companies, consumers, and the market, such rules and assessments have proven undeniably valuable. After several years of diligent care and work, the hole in the ozone layer is projected to have almost entirely recovered by 2026, specifically because of these actions.
Why Businesses Need Carbon Assessments
Regulatory Pressure
Governments worldwide are introducing stricter carbon reporting regulations, such as the SEC climate disclosure rules in the US.
Consumer Demand
Beyond government mandates, there's also the simple benefit of consumers investing more in companies that remain transparent about their carbon footprint. In recent years, 85% of consumers have become "greener" in their purchasing habits.
Investor Expectations
ESG factors, including carbon impact, are now key considerations for investors. Regulating carbon emissions is not merely a moral or ethical conundrum for businesses but also a financial one.
How It Works
A carbon assessment measures a company's carbon footprint across three different subsections, referred to as Scope 1, Scope 2, and Scope 3.
Scope 1: Direct Emissions
These are emissions that the company itself is directly responsible for, on-site.
Scope 2: Purchased Energy
These are indirect emissions that result from purchased energy on the grounds. These emissions from electricity to heating and cooling result from the company's operations but may not stem directly from the company itself.
Scope 3: Supply Chain Emissions
These are emissions that result from a company's supply chain, well beyond the bounds of its actual location. They account for the emissions from burning fossil fuels such as gasoline in transporting products and beyond.
The Importance of Data Collection
To gauge a company's emissions, all relevant information, from energy bills to transportation, manufacturing, and other sources, must be factored in. Without this information, the carbon assessment will be rendered invalid.
How Carbon Assessments Help Businesses
A mid-sized manufacturing company conducted a carbon assessment and discovered that over 60% of its emissions came from a single supplier. Switching suppliers and optimizing logistics cut emissions by 25% in one year.
FAQ Section
What Does a Carbon Assessment Include?
It includes measuring GHG emissions from all business activities, categorized into Scope 1, 2, and 3 emissions.
How Often Should a Business Perform a Carbon Assessment?
Ideally, annually, to track progress and update strategies.
Is a Carbon Assessment Expensive?
Costs vary depending on the size and complexity of the business, but many firms find the ROI significant through energy savings and risk reduction.
Can Small Businesses Benefit From Carbon Assessments?
Yes, especially as more clients and supply chains demand ESG compliance at all levels.