I read this week about something that’s been dubbed “Carbon Tunnel Syndrome” to describe our growing fixation with reducing GHG emissions, sometimes to the exclusion of the bigger sustainability picture. It struck a chord, as it seems many companies are focusing only on their carbon reduction goals right now in pursuit of the holy grail that is Net Zero, and while that is indeed a vital goal, it’s important that it’s done thoroughly.

One way to do this is by producing a carbon inventory. Effectively, this is a comprehensive and thorough listing of all sources of emissions and a record of what they are. It should go beyond listing the scopes 1 and 2 emissions that many companies already have a handle on and look into scope 3 as far as is possible at this stage in the company’s journey. It may sound somewhat daunting, particularly when you know that countries that are signatories to the United Nations Framework Convention on Climate Change (UNFCCC) have to produce a carbon inventory every 3-5 years, but it doesn’t have to be.

What is a Carbon Inventory?

This is simply about mapping your carbon emissions at every source across your business – identifying what GHG emissions you are producing, why, when and where they are produced and understanding your impacts fully. Doing this will allow a business to identify what can be cut quickly and what might require a bigger investment. It will also help you understand the potential costs you might face, if and when carbon taxes are introduced.

Although it may seem like a huge piece of work, it’s one that’s worth doing, as mapping all the emissions within your value chain will allow you to make informed decisions across three key issues:

• Where your greenhouse gas (GHG) emissions are concentrated (scopes 1,2 or 3)
• What ESG (environmental, social and governance) impacts you need to consider
• The sustainability measures that can best be implemented to support operational efficiencies, cost savings and emissions reductions

How and where do I start?

If you’ve already committed to decarbonize your business, creating a carbon inventory is a robust and necessary starting point. You may already have completed this is the process of calculating your carbon footprint, or it may be your next step to drill further into the information you’ve uncovered at the first stage. If you’re considering the Science-Based Targets route, creating a carbon inventory will help you map the data you need with greater accuracy and in more detail. In all of this, data is key.

Even if you haven’t progressed beyond looking at scopes 1 and 2 yet, mapping the impacts from scope 1 (direct) emissions from your facilities and company owned assets such as vehicles and scope 2 (indirect) emissions from purchased electricity, heating and cooling is an important exercise. The critical factor in all of it though, is capturing the data.

This is about good practice, whether you’re assessing a whole company or a single product, the same approach applies. Tools and resources exist in abundance, and one of the most reliable sources is the Greenhouse Gas Protocol website, which helpfully lists the 15 categories for scope 3 emissions as follows:

Upstream Scope 3

• Purchased goods and services
• Capital goods
• Fuel and energy-related activities (not included in scopes 1 and 2)
• Upstream transportation and distribution
• Waste generated in operations
• Business travel
• Employee commuting
• Upstream leased assets

Downstream Scope 3

• Downstream transportation and distribution
• Processing of sold products
• Use of sold products
• End-of-life treatment of sold products
• Downstream leased assets
• Franchises
• Investments

Not all categories will apply to every company, but review and select those that do, and undertake a full inventory, even if you don’t have all the data to calculate impacts at this stage. This will help you understand what data you need to capture and the next step is finding the best tool to do this. There are lots of data capture tools out there, but our advice would be to go with one that does more than just capture carbon. If you have a full commitment to ESG or sustainability, a tool that will help you measure, monitor and report on every aspect will be more efficient and give you a more holistic view of your progress.

And guess what? That’s just what we can offer at SustainIQ, so feel free to reach out to discover more at [email protected].