Imagine trying to improve your grade in a class without knowing how each assignment contributes to your grade. It’d be impossible to know which efforts make the most difference and where you should spend most time studying. And that’s what it’s like if an organization tries to reach environmental sustainability targets without implementing carbon tracking.
Carbon tracking is how organizations monitor their carbon emissions over time. Whether your company has set net-zero targets, you’re working toward decarbonization, or you have other emissions-related sustainability goals, carbon tracking plays a vital role in demonstrating your success or failure.
At a high level, carbon tracking shows a company’s overall CO2 emissions, but it’s important to track emissions from specific locations and processes as well, so you can see which areas within your organization have the most room for improvement, or are holding you back from your goals.
In this article, we’ll explore what carbon tracking is, how it benefits your business, and how to do it.
What is carbon tracking?
Carbon tracking is the process of measuring and recording an organization’s carbon emissions at regular intervals. This process may focus solely on emissions the organization directly controls through its operations (Scope 1 emissions), or it may encompass indirect emissions that occur as a result of its energy consumption (Scope 2 emissions), or even indirect upstream or downstream emissions that result from suppliers’ the organization works with or how consumers use the product (Scope 3 emissions).
For example, a manufacturer that produces agricultural equipment would track CO2 emissions from burning fossil fuels to produce their products and operate their facilities (Scope 1), emissions from purchasing electricity to run their equipment and heat or cool their facilities (Scope 2), emissions suppliers generate to manufacture components and emissions that come from customers burning fuel to use their products (Scope 3).
As you can imagine, it’s much easier to track the CO2 emissions an organization directly controls, but Scope 2 and 3 emissions are essential for understanding the total carbon impact of the organization’s operations.
Benefits of carbon tracking
Carbon tracking isn’t a fad or vanity project. It’s a process that benefits your organization in tangible ways. It can play a key role in financial growth, meeting your sustainability goals, and avoiding penalties.
Attract investors, job candidates, and consumers
Investors use sustainability data to more accurately compare similar investment opportunities and determine the level of risk a company presents. When companies use carbon tracking to demonstrate that they are effectively managing sustainability risks, investors can be more confident in the direction the business is heading, and there’s less likelihood that they’ll experience reputational damage or face penalties from regulators.
While it varies drastically from one industry and market to another, public sentiment may also strongly favor organizations that can support their commitment to sustainability in tangible ways. If carbon tracking shows your company is trending in the right direction and making headway toward global sustainability goals, consumers may be more loyal to your brand, and may even be willing to pay more for your products. Data also suggests that your commitment to sustainability plays a significant role when competing for top job candidates. According to IBM’s Institute for Business Value, 71 percent of employees and employment seekers say “that environmentally sustainable companies are more attractive employers.”
Maximize the impact of sustainability efforts
When you segment carbon tracking data by location, asset type, process, or other criteria, you can identify the specific parts of your operations that generate the most carbon emissions. As you consider sustainability initiatives and solutions, this can help narrow your focus to the areas that will have the greatest effect on your carbon footprint, ensuring you’re not wasting efforts and budget on low-impact initiatives
Comply with sustainability regulations
Around the world, regulators are pressuring companies to disclose their GHG emissions data. For now, the focus has largely been on Scope 1 and 2 emissions, but some organizations are required to report Scope 3 as well. Carbon tracking isn’t the only consideration with sustainability regulations, but implementing this process plays a key role in working toward compliance—and thereby avoiding penalties and legal repercussions.
How to implement carbon tracking
The larger your organization, the more complex it is to start monitoring your carbon emissions. But at whatever scale you operate, the process is the same. Here’s how carbon tracking works.
Identify carbon emissions sources
Carbon tracking starts with pinpointing the assets and operations that generate carbon emissions, building a list of all the sources of carbon emissions throughout your organization, from infrastructure to vehicles, equipment, and manufacturing. Even suppliers. For reporting purposes, you’ll want to group these sources by their scope, too. This should serve as a database for all of the carbon emissions sources you’ll need to track. The more specific your list of sources is, the more useful it will be as you monitor where and how your organization produces emissions.
Collect fuel and energy consumption data
Once you know where all your carbon emissions are coming from, you need to monitor how much fuel and energy each source consumes over time using the appropriate units for each source (such as gallons, short tons, thousand cubic feet, or kilowatt hours). Tracking on a monthly or weekly basis will give you better insights into the seasonality of your CO2 emissions, helping you address peak emission periods and more accurately understand any changes.
Calculate your carbon emissions
Different fuels and energy types generate different amounts of carbon emissions. However, the formula is generally the same. The type of fuel or energy is the CO2 emission factor, and to calculate emissions produced by the source, you multiply the volume or mass of the emission factor consumed by the pounds or kilograms of CO2 per unit of volume or mass.
Emission factor consumed (gallons, kilowatt hours, etc.) x CO2 per unit = CO2 emissions
Suppose your company uses propane powered boilers in the production of plastic products. Burning propane produces 12.68 pounds of CO2 per gallon. So your carbon emissions calculations for these boilers might look something like this:
10,000 gallons of propone x 12.68 pounds of CO2 per gallon = 126,800 pounds of CO2
You’ll perform these calculations for every emissions source in your organization. Carbon accounting software like Tango Energy & Sustainability can also perform these calculations for you automatically, using industry standard emissions factors across commodities for your region.
Tracking Scope 3 carbon emissions is far more difficult, and requires cooperation from suppliers and other partners that contribute to your emissions lifecycle.
Record and monitor your emissions over time
Tracking your emissions requires you to document your calculated emissions and build a growing database that shows your emissions over time, so you can analyze your emissions from month to month and year to year. This empowers you to identify patterns and trends to demonstrate progress or reveal areas where you have the greatest potential to reduce emissions.
While a complicated spreadsheet might do the trick for smaller organizations, carbon accounting software is a scalable, purpose-built solution for centralizing all of your emissions data across your portfolio, with dedicated features to make carbon tracking and sustainability reporting easier.
Simplify carbon tracking with Tango Energy & Sustainability
The larger your portfolio and more complex your operations, the more difficult carbon tracking and accounting becomes. Tango Energy & Sustainability by WatchWire helps ease the burden by centralizing your emissions data and tracking Scope 1, 2, and 3 emissions, renewable energy credits (RECs), global warming potential, and more. Tango automatically calculates your location-based and market-based emissions, so all you have to do is monitor your progress.
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