Three Roads to Carbon Footprint Calculation — Which is Best for You?
Companies across the world are under increasing pressure from customers, business partners, investors and shareholders to decarbonise their supply chains, which account for more than 70% of most companies’ emissions.
The first step to doing this is the calculation of their Scope 3 carbon footprint. This baseline measurement provides a valuable benchmark for evaluating future success in meeting carbon reduction goals.
But how do you build an accurate supply chain emissions baseline? Perhaps you’re just embarking on your sustainability journey and want to understand how to undertake this measurement, or maybe you’re already measuring your carbon footprint, but you have concerns around accuracy and effectiveness.
In this blog post we evaluate the three most common routes to Scope 3 carbon footprint calculation: using an external consultancy, an internal development team or implementing software to automate the process. We explore the pros and cons of each of these approaches to help you establish which option is best suited to your needs.
Using a climate consultancy
Climate consultancies can offer businesses of all sizes a bespoke service that goes beyond carbon footprint measurement. Many of them work with companies longer term to support them with controlling environmental risks, generating savings, building an Environmental and Social Governance (ESG) strategy and more.
Bespoke carbon accounting - A consultancy can guide you through Scope 3 emissions measurement, tailor the process to your needs (for example, basing it around the modes of transport that you use most frequently), and help you to collect the right data.
Support with target-setting - It can also support you in defining your carbon reduction goals, which may include developing a Net Zero or carbon neutrality roadmap.
Support with carbon-reduction planning - Consultants can offer guidance on methods to reduce emissions, such as switching to cleaner sources of fuel, avoiding empty shipping containers, and even slowing down the speed of some transports.
High costs - Using a consultancy can be very costly, with fees reaching tens of thousands of pounds per year for emissions calculations and carbon reduction plans.
Longer time to value - Most consultancies want to take the time to get to know your company, including getting an in-depth understanding of your supply chain operations. This is so that they can select or build a calculator that is most suited to your business needs. If implementation speed is important to you, a consultancy may not be the best choice.
Variations in expertise - Consultancies have varying degrees of expertise when it comes to carbon footprint measurement. Some have experience in calculating a particular scope, while others tend to work with specific types of clients within the logistics sector. That’s why it’s important to do your due diligence and to find out what factors and methodologies they use for measurement. Lack of official accreditation for logistics emissions measurement - Few consultants are accredited by the Global Logistics Emissions Council (GLEC). The GLEC Framework is the only globally recognized methodology for calculating and reporting on the GHG footprint across the multi-modal supply chain. Accreditation is particularly valuable in demonstrating the accuracy of your measurements to stakeholders and legislators.
Building an internal calculator
Some companies have developed their own internal carbon calculators. These differ hugely in their complexity and are usually built by a team of developers.
A bespoke calculator suited to your needs - Building your calculator in house means that you can tailor it to the needs of your business. You can select everything from the methodologies used to the reporting formats. This is useful, as you’ll know what data you have at your fingertips and you can build your calculator around it.
Easy to adapt as your company grows and changes - as a business scales, introduces new services, partnerships, and customers, its carbon footprint inevitably evolves with it. Using an internal team means that you can adapt your tool to changing needs - although arguably a software tool is still likely to be a quicker solution.
Carry a high level of risk - If you’re looking to declare your baselines publicly, you’ll lack the third-party assurance that is required by some regulations. Moreover, if your calculations are found to be inaccurate, your company will be held to account for the error. Likewise, if you’re sharing these measurements with customers and internal stakeholders, you may be pulled up on inaccuracies and accused of greenwashing.
Can be time-consuming to build - If you’re aiming for granular, accurate emissions measurement, your team will need to explore different measurement methodologies that go beyond using simple, default values. For this reason, an internal calculator can be time-consuming and costly to build.
Difficult to build an expert team - Continuing on from the above point, it’s not easy to find engineers with a deep understanding of emissions factors and methodologies. You might find that the recruitment process itself is time- and labour-intensive.
Using a software solution for emissions measurement
Relatively low cost - Most software solutions can be up to 10 times cheaper than the cost of hiring a consultancy.
Fast time to value - Most software solutions enable you to self-serve, and you can get a transparent, accurate emissions calculation in minutes. Some provide you with step by step guidance on how to collect and input your data.
Transparency - Software solutions are usually transparent about the factors and methodologies that are used in their calculations. Some go as far as giving a clear and detailed breakdown of how the emissions for every journey were measured.
A user friendly output - Software solutions tend to offer an easy-to-understand output, meaning that you can identify and understand your top emitters and take the appropriate climate action. Some also offer a reporting functionality which makes it easy to share reports with investors and other stakeholders.
Integrated climate services - Some software solutions are simple emissions calculators with no additional support when it comes to analysing the results and taking climate action. But there are some providers which offer an integrated service, which might include support with carbon footprint reduction and offsetting your residual emissions. This means that you can take climate action at the click of a button, using a single log-in.
Varying calculation depth and quality - There are varying capabilities of software providers across the market. Some use basic default emissions values, while others offer bespoke methodologies for each mode of transport.
Varying levels of accreditation - There are only a few tools currently available on the market which are GLEC accredited. If the provider isn't shouting about their GLEC accreditation, then they're unlikely to have received it. Conforming to the GLEC framework ensures that a provider’s methodology complies with the industry standards for emissions measurement for each transport type. It can be particularly valuable if you’re publicly declaring your baselines, as it offers an assurance of measurement accuracy.
Deciding which option is best for you
Making a decision about how best to measure your supply chain emissions depends largely on your needs and budget. If you require long term support with implementing a sustainability strategy or carbon reduction plan, you may choose to go down the climate consultancy route. But note that this is likely to be costly, which is why it’s often not a realistic choice for many small to medium-sized companies. Also, many consultancies are not officially accredited for measuring scope 3 emissions and their methodologies lack the granularity required by most legislators.
If you have a tech team at your disposal, building a calculator from scratch might be tempting, but watch out for the high risk associated with potential measurement inaccuracy.
If you’re looking for a more cost-effective and transparent carbon footprint calculation with high time to value, using a software tool is the most sensible option. Start by doing a thorough check of the Scope 3 measurement methodology used by selected providers, and check their credibility. Here are 10 questions that you should ask any prospective provider about logistics emissions measurement.