How do you compare and benchmark your carbon footprint with other organizations in your sector?

Many large corporations are taking steps to reduce their value chain GHG emissions and such clients may soon require their suppliers to declare carbon intensities of their products (e.g. tCO2/kg product). This may become a deciding criteria in large supply orders and clients with lowest emission intensity in a product category and geography may be also able to command some premium.

When it comes to benchmarking, following key actions must be considered such as It requires a strategic comparison with sector peers. First, define scope (direct & indirect emissions) and source reliable data from databases against the desired ESG standard framework such as CDP, GRI, or sector-specific tools. Analyze the status against sector averages and best-in-class benchmarks. Use insights to identify improvement areas and target emission reduction strategies. Responsible interpretation and clear communication are key to making impactful improvements. By benchmarking, One can set ambitious goals, track progress, and become a leader in your sector's sustainability journey

I. Define the parameters of comparison, including scope and metrics for measuring carbon footprint. II. Collect data on carbon emissions and sustainability practices from both my organization and others in the sector. III. Analyze and compare the data to identify strengths, weaknesses, and areas for improvement, informing future sustainability strategies.

Carbon Footprint (Ton CO2/Ton of product) has become another benchmarking tool to define Organization's reputation on Sustainability index and environmental impact. However need to ensure that international standards are being followed and scope parity is there in comparison. For Carbon footprinting done religiously - Green Premium can be commanded by responsible organisations (lesser CO2 emissions than competition).

Comparing and benchmarking are crucial to understand market trend in terms of decarbonization. It is also important to have specific plans with tailored KPI respecting them year on year. Your sustainability report is open to consumers and other stakeholders such as financial institutions. Two other important indicators are the progressive reduction of your carbon footprint and the speed you put on it. Fast movers always increase their market share.

To measure your carbon footprint effectively, it's essential to define what you want to measure and the methodology you'll use. Depending on your objectives and data availability, consider using different scopes, boundaries, and indicators. This includes Scope 1 emissions from sources you own or control (e.g., fuel combustion or vehicles), Scope 2 emissions from purchased electricity, heat, or steam, and Scope 3 emissions from sources outside your control (e.g., business travel or supply chain). Additionally, comparing metrics like carbon intensity (emissions relative to a specific activity or output) or carbon efficiency (inverse of carbon intensity) can provide valuable insights.

Factors that can be compared are: 1. Scope 1&2 emissions 2. Scope 3 emissions combined 3. Sector specific material categories within scope 3. 4. Emission intensity relevant to your sector. 5. Target set against sector average.

Examples of Comparison & Benchmarking Comparing the amount of carbon emissions per unit of production (e.g., per product manufactured, per customer served) with industry averages Benchmarking energy consumption patterns against industry peers can reveal opportunities for optimizing energy efficiency Comparing strategies implemented by similar organizations to reduce emissions (such as switching to electric vehicles, implementing energy-efficient technologies, or adopting green supply chain practices Benchmarking supply chain emissions, including upstream and downstream activities, can identify emission hotspots and drive collab efforts to reduce overall carbon footprint. IKEA has done almost all of the above listed points.

Comparison Between Same-Sector Companies is ALSO tough because carbon footprinting depends on a lot of moral standards. There isn't any fixed formula but here are some points to help you understand better: 1. Find reliable data: Look for industry reports, databases, or tools like the GHG Protocol or CDP. Seek data from trusted sources, ensuring consistency and relevance. 2. Consider multiple factors: Compare absolute emissions (total tons) and intensity (emissions per unit of production or revenue). Account for differences in operations and supply chains. 3. Analyze the numbers: Analyze emission reduction targets and progress. Ex: Compare renewable energy use and resource efficiency. Assess investments in sustainability initiatives.

The most excellent comparison technique is undoubtedly the United Nations Climate Neutral Now programme. It does not require your organisation to pay fees to have your targets “validated” by the Scheme “ awarding” your company their Scheme’s “approval”!! We need to be cautious when we are asked to pay the Scheme operator to take their “test” in order to get their “approval”. This “benchmarking” requires you to pay the “benchmarker” - this is little different from the purchase of “Papal indulgences” to buy “forgiveness of your sins”. We need to be professionally skeptical when we are offered awards upon payment

To effectively compare and benchmark your carbon footprint, seek reliable and comparable data from other organizations in your sector. Utilize sources such as public reports and disclosures from entities like CDP, GRI, or GHG Protocol. Additionally, explore sector-specific databases and tools like eGRID, EcoTransIT, or Cool Farm Tool. Participating in peer-to-peer networks and initiatives such as RE100, Science Based Targets, or Carbon Disclosure Project can provide access to average or best-in-class values for your sector or sub-sector. Leveraging these resources allows you to learn from peers and benchmark your performance against industry standards.

Different ways to compare your CF are: 1. Use peer disclosed data. 2. Use rating or outputs provided by various rating agencies like MSCI, sustainalytics, CDP etc. 3. Use secondary research data

Steps to Compare & Benchmark emissions 1.Gather detailed data on your organization's carbon emissions across various scopes (e.g., direct emissions from operations, indirect emissions from electricity consumption, supply chain emissions) 2.Select key performance indicators (KPIs) for benchmarking, such as carbon intensity (emissions per unit of output), energy efficiency metrics etc 3.Define peer groups within your industry or sector for meaningful comparison 4. Utilize carbon accounting software/ tools designed for emissions tracking and analysis.Like CFC,(LCA) Software,EMS systems that track,Supply Chain Analysis Tools 5.Compare organization's emissions data against industry benchmarks and peer performance 6. Collaborate with experts

When comparing and benchmarking carbon footprints with other organizations in the same sector, several challenges and limitations arise. Firstly, varying methodologies and data collection practices can hinder accurate comparisons. Secondly, differences in operational structures, geographic locations, and supply chain complexities can skew results. Additionally, confidentiality concerns may limit the availability of comprehensive data for benchmarking. Despite these challenges, organizations can overcome limitations by adopting standardized measurement protocols, collaborating with industry peers for data sharing, and focusing on improvement rather than direct comparison.

In order to compare, one needs to understand the goal, functional unit and scope boundary within which the computation was done, as for comparison the denominator has to be same. Further the data sources or assumptions should be same which will give correct results for comparison. Even different software available in market can give different output.

Comparing carbon footprints faces challenges like data quality, comparability, and interpretation. Differences in data sources and methods can lead to gaps or errors. Varied scopes and indicators affect comparability. Interpretation is influenced by context and audience. To ensure fairness, normalize data, explain assumptions, and avoid oversimplification.

In my experience, benchmarking and comparing carbon footprints is a real head-scratcher. It's not like comparing apples to apples, it's more like comparing apples to oranges.There are just so many variables at play. Different companies operate in diverse sectors, with varying resource usage, stakeholders, and supply chains.It's a complex web to navigate.Finding reliable data is as finding a needle in a haystack.Availability, accuracy, and interpretation of data pose challenges. There's no universal standard, so what one company considers "green" might be another's "needs improvement." It's all subjective, which opens the door for misinterpretation.In such cases, always Data simplicity & clear communication is the key.

Various ways to improve your comparison and benchmark are: 1. Make it temporal relevant by using the updated disclosed data. 2. Try to use authentic source of data. 3. Start with an industrial comparison and gradually shift to company specific comparison. 4. Use accurate and relevant parameters while comparing.

Overcoming challenges in comparing carbon footprints involves clear objectives, transparent scope, and credible data. Use consistent adjustments to account for differences. Communicate results responsibly, acknowledging data limitations and avoiding exaggeration.

Benchmarking carbon reduction and emissions is tricky.Fear not, there are ways to elevate your comparisons, Define the specific aspect you're comparing, whether it's energy consumption/unit produced, supply chain emissions etc Identify competitors or industry leaders with similar operations and production methods. This ensures a more relevant comparison. Look for industry-specific protocols or frameworks for measuring. This minimizes ambiguity and strengthens your analysis. Be upfront about the limitations of your data and methodology. Acknowledge any gaps or assumptions Identify key trends and insights.Use visuals like charts/graphs to communicate your findings effectively. Clear communication is key.

Three key strategies for comparing and benchmarking carbon footprints, 1. Utilize Industry Benchmarks: Identify and utilize industry-specific benchmarks to compare your organization's carbon footprint. 2. Engage in Collaboration: Participate in industry-wide initiatives and collaborations that facilitate benchmarking. 3. Adopt Standardized Metrics: Embrace standardized carbon metrics and reporting frameworks recognized within your sector.

Carbon accounting is mostly a discipline to understand the emission profile of your company to identify the actions to take that will make the biggest impact when it comes to decarbonisation. Start working on your emission hotspot and balance between the potential impacts of the actions & the ease of their implementation to be efficient. Benchmarking your CCF with other companies can be a very complex exercise as industries aren't always mature when it comes to accurate carbon accounting. Being the least emission intensive company in your industry is a nice-to-habe but not the end of your company's net-zero journey.

Au delà de la comparaison, l'échange avec d'autres organisations (de son secteur ou pas) permet de partager des bonnes pratiques, d'identifier des difficultés et les aborder conjointement, de peser auprès de fournisseurs communs.