Calculating your carbon footprint – A guide for an online gift company
A company’s day-to-day operations result in Greenhouse Gases being released into the atmosphere. This happens through travel, production, shipping costs, materials, electricity use and a number of other functions. As the increasingly frightening reality of climate change begins to penetrate our psyche, the emphasis on reducing carbon emissions is becoming more and more important to organizations. But… you can’t reduce your carbon footprint without first calculating it.
It may look like a daunting task at the outset but over the next few months GreenFeet will create guides for different types of businesses to follow to help them determine their carbon footprint easily and efficiently. (You’re welcome! And by the way, if you’d rather not go to the effort of doing this yourself, sign up for GreenFeet and we can do it for you!) First up… here’s a guide for calculating emissions for a small online consumer business.
We are using a small online gift company (called JustHappyTears) as our example company for this exercise. It’s a nine person company, based in Boston, Massachusetts that produces personalized art prints on canvas and wood.
In the following blog post we are going to cover everything from explaining the GreenHouse Gas Protocol, to understanding how to identify and categorize your emissions as well as walking you through each category and explaining, with working examples, exactly how to make the relevant calculations to produce an accurate view of your company’s carbon footprint.
What is the GreenHouse Gas Protocol?
The Greenhouse Gas Protocol has become the defacto standard of carbon footprinting. It provides guides and tools that aid the process and with an ever-changing world where carbon footprinting is becoming a necessity rather than an option it’s worth taking the time and energy to establish an accurate footprint initially. If you’re serious about reducing your carbon footprint, then you must have an accurate baseline. You want to track emissions with enough accuracy to ensure effective management and reduction. Start as you mean to go on and the result will be a less work intensive effort year-on-year.
First things first… there are a number of Greenhouse Gases that get emitted into the atmosphere, (Carbon dioxide, Water Vapor, Methane, Ozone, Nitrous Oxide, Chlorofluorocarbons) with carbon dioxide being the most prominent. For the purpose of calculating emissions the gases fall under one umbrella and are all converted to metric tonnes of carbon dioxide equivalent or CO2e.
The starting point for your emissions calculation is to determine where your emissions are coming from. Think of the life-cycle of your product for example, as well as any activities related to your business operations such as company travel or the emissions generated from the use of your office building. It’s important to note that your carbon footprint is a large part of your environmental footprint but a company’s food waste and use of natural resources should be considered for a complete overview of how ‘green’ or sustainable it is.
Firstly choose a base year, you’re going to need one to compare and contrast as you monitor your emissions going forward.
Secondly, you need to identify and categorize the emissions your business produces.The GHG Protocol breaks down emission sources into three different categories or ‘scopes’. These can appear to be quite complicated at first glance but basically they break down as follows :
- Scope 1: Direct emissions that occur from sources that are owned or controlled by the company… for example burning oil to heat buildings, burning fuels to power company vehicles.
- Scope 2: Accounts for emissions from the generation of purchased electricity consumed by the company.
- Scope 3: Accounts for emissions produced as a result of the activities of the company, but which occur from sources not owned or controlled by the company… for example: air travel, IT infrastructures (servers in the cloud that your website runs on), employee commuting, shipping, manufacturing and materials.
Step 1 Identifying your Emissions Categories
Identify the sources of your emissions. This section is all about what data you will need to collect in order to calculate your company footprint. We will categorize the data you need to gather by scope (i.e. scope 1, 2 or 3).
Burning fossil fuels is the biggest factor in human produced carbon emissions. To understand what data you need to collect for Scope 1, begin by thinking about all the different ways in which your company burns fuel.
For the example that we’re using (a small online gift company) Scope 1 emissions come from heating or cooling the office. If your company has its own office you need to examine your heating bill. This will give details needed to calculate your carbon emissions from gas usage or any other heating source. If you’re sharing a coworking space you can determine your heating bill emissions through use of emission factors and cost per square footage of your office. We will outline how to use emission factors as part of your calculations a little later in our calculations section (step 2 below) but for now a simple definition: emission factors are used to convert your activity data (e.g. the amount of gas used) to carbon emission equivalent values. Different countries or states generally have different emission factors and these must be consulted when establishing your carbon footprint for that location.
Take the example National Grid gas and electricity bill above. We can see the kilowatt hours and therms usage details on the left hand side. We refer to these values as ‘activity data’. Emission factors are used here to convert the amount of therms (or kWh) to the CO2e unit needed to establish your footprint. Remember that it helps to convert all fossil fuels to the universal CO2e measure when calculating carbon emissions.
“Activity data” is a measure of a level of activity that results in GHG emissions. As you work your way through the scopes and all of your C02 producing activity within your companies operations, different units of activity data will be used. For example: kilowatt hours of electricity, gallons of heating oil, therms of cubic metres of gas, miles or kilometres travelled. These measures will then generally be used in conjunction with emission factors (usually geographically based) to establish a calculation of C02e production.
If you’re part of a coworking space, the process of calculating Scope 1 emissions is going to be slightly different. If you can access the utility bill for your building or space you will be able to calculate or at least estimate your portion of it. Generally, the facilities team at your coworking space will be able to provide you with the relevant billing info so that you can work it out pretty easily. Companies like WeWork for example, heavily promote the benefits of coworking from a sustainability perspective and even have dedicated sustainability teams working on being even more environmentally efficient. Another way to do this if you do not have access to the utility bill information is to figure out the square footage of office space utilized by you and calculate an estimate based off of this. There’s a good post here by the guys at Observable covering how to calculate a carbon footprint estimate based on the size of your office space.
It’s important to note that also factored into Scope 1 would be emissions from company vehicles as it’s an emission source that is owned by the company. In our example (a small online gift company) there is one company car in use. A quick google search will unearth lots of different carbon calculators. Select a calculator for car emissions like this one and it will allow you to insert details of the type of car, distance travelled by the car and fuel consumption of the car. The more details you can include here the better, but these calculators will apply averages where needed. If you’ve got more detailed information regarding travel, the Map my Emissions site can give you a more specific location based estimate.
Scope 2 emissions essentially concern your electricity use. The Kilowatt Hour (kWh) is generally the billing unit used for energy delivered to consumers for their electricity. These details are standard in any given electricity bill. Simply gather your electricity bills, identify the kilowatt usage and and use an emission factor for your location (or a carbon calculator such as this one) to determine C02e output.
Scope 3 encompases emissions that are produced from basically everything else – emissions from sources not owned or controlled by you but related to your business activities.… so for example… company travel, use of third party services (e.g. website hosting, any cloud software/apps that you use) and product manufacturing and shipping. The GHG Protocol again has a comprehensive guide on calculating Scope 3 emissions which they breakdown into 15 different categories but for the purpose of this exercise we’ll try to give a simplified overview of the guide which at times can be overwhelming!
Keep this list to big impactful areas, there’s not a lot of benefit in including lots of areas that have minimal impact on your overall emissions. Take a company like Stripe (who have taken a leading role when it comes to sustainability) for example which has over 2500 employees as of June 2020 (that many gift companies may use for online payments), they list only 3 major areas when it comes to scope 3 i.e. servers, employee commuting and business travel.
Within scope 3, according to the GHG Protocol, emissions can be further classified into two subcategories: upstream and downstream emissions. For the purposes of this exercise, ‘upstream’ accounts for the emissions that stem from activities related to the production of a product, ‘downstream’ in our example case accounts for emissions that result from shipping.
The best manner in which to identify your scope 3 emission areas is to list all the activities in terms of the value chain and life cycle of the product or company activities, from start to finish. This will help you to narrow down what should and shouldn’t be included in the report. Then list all purchased and sold goods or services. Finally list all suppliers and relevant partners. For example… our company’s activities in its value chain are:
- Business activities – employee travel such as air travel and commutes.
- Website/servers – Shopify (our online sales platform).
- Production and shipping emissions – emissions generated from the product creation process as well as shipping and delivery to customers.
Business Activities Breakdown
The aviation industry accounts for around 2% of global emissions and is therefore a strong focus for emission reduction opportunities. It also frequently makes up a significant proportion of a company’s emissions, especially if there is a regular cadence of business travel within your organization. As a result, it’s relatively easy to secure accurate calculations for a company’s air travel. There are a number of ways in which you can calculate emissions as a result of company air travel. There are lots of different air travel carbon calculators online with emission factors already built in, allowing you to receive accurate calculations quickly. Simply gather flight information for employees for your baseline year and use a calculator such as this one to calculate Co2e emissions.
There are a number of ways in which to calculate emissions from employee commutes and the GHG Protocol gives a comprehensive overview here. In summary, there are three options when it comes to calculating your company’s commuter footprint. You can use:
- A fuel based method – determining how much fuel the commutes use and applying an emission factor to calculate footprint.
- A distance based method – determining how far was travelled by commuters and in which mode of transportation and then applying emission factors to calculate footprint.
- Average data method – determining footprint through estimates of employee commuting through averages based on data on employee commuting patterns.
Here’s an employee commute carbon footprint calculator for handiness!
All companies with an online presence will have a server carbon footprint and data centres have historically been a big source of greenhouse gas emissions. If you easily want to calculate the footprint of your website, this is a simple but useful tool.
If you are using an ecommerce platform like shopify for example, you may want to check their sustainability policy. For example Shopify has set goals to be carbon neutral for 2020 so you may not actually need to calculate anything here since using a provider that is carbon neutral means that you will not inherit any carbon footprint from using that service.
If you have more than just a website and your team makes use of cloud servers (e.g. Amazon Web Services, Google Cloud or Microsoft Azure). You may also want to calculate this footprint also. Microsoft now provides a calculator to get an accurate view of this. If you do not have access to a calculator contact your provider and they may be able to give you enough details to estimate your emissions.
Production and Shipping
- For our example (a small online gift company), we need to calculate emissions from printing or the production of our printed products. HP provides a printing calculator which allows us to apply an average data method approach here. More valuable to us for this calculation however is the 2030 Calculator which allows a company to calculate the carbon footprint of a physical product using weight and material estimations.
- If using a third party printer or production facility for your product it’s worth contacting that company directly as they may have an exact carbon footprint per product available. In terms of your shipping carbon footprint, shipping companies like DHL offer a tool which allows you to determine the exact carbon footprint of a particular shipment. It allows for an accurate estimation, given that there are a number of different variables supplied which include the mode of shipping transport, distance traveled and weight of package.
Step 2 Calculating Your Emissions
Now that you have collected the activity data information, it’s time to calculate your CO2e emissions.
Scope 1 Calculations
We determined that our company’s gas bill and single company vehicle fell into our Scope 1 emissions category. Let’s refer back to our example bill below.
We can see that the gas bill (shown above again for convenience) details that 3,837 therms of gas were used throughout the calendar year in question. Our example company uses 50% of this shared space therefore our usage is half of 3,837 which is 1,918.5 therms of gas. In order to convert the therms measurement to the C02e unit, we’ll use this EPA Greenhouse Gas Equivalencies Calculator. The result is that our example company used was 10.2 metric tonnes of C02e.
Company Vehicle Emissions Calculation
We also identified a company vehicle as part of our Scope 1 emissions. In our example we entered the following information into the myclimate.org vehicles emissions calculator:
Distance travelled: 22,530 kilometres/14,000 miles (this is based on the average distance an employee will travel per year in a company car in the United States).
Fuel type: Petrol/Gas
Fuel consumption: We made this calculation using the based on a mid-range car size which detailed that fuel consumption would be 8.42ltrs per 100km.
The My Climate Vehicle Emissions Calculator gave us a company vehicle emissions output of 7.7 metric tonnes of CO2e.
Scope 2 Calculations
In order to calculate Scope 2 emissions, we need to calculate our electricity consumption for the year. We simply consult our example bill (above) and complete the same process as with our natural gas usage for heating, however this time using the electricity usage activity data. The total usage for the building for 12 months was 50,000 kWh of electricity. As we use 50% of the shared space, we divide by two to determine that our company’s usage was 25,000 kWh for the year. We used this Cool Effect Business Carbon Offset Calculator to calculate our footprint. Our input value was 25,000 kWh/ 12 to get the monthly utility usage, giving an electricity footprint of 25 metric tonnes CO2e.
As an aside, the Cool Effect calculator also details the cost of a carbon offset for your usage. In our case the cost of offsetting our electricity footprint alone for the year in question would be $209.25. We will cover this topic of offsetting in more detail in subsequent blog posts.
Scope 3 Calculations
Now to Scope 3 which involves calculating employee travel (air travel & commuting), our ecommerce web site and finally printing and shipping emissions.
The company air travel for the year consisted of 6 round trip flights in total detailed below. We used a flight carbon calculator to calculate the following:
- 2 x 2 rountrips (economy class) from Boston to San Francisco, CA (8,700km x 2) = 2.8 metric tonnes of C02e.
- 1 x roundtrip (economy class) from Boston to Frankfurt, Germany (11,800km) = 1.9 metric tonnes of C02e.
- 2 x roundtrips (economy class) from Boston to New York City, NY (1200km) = 0.5 metric tonnes of C02e.
- 1 x roundtrip (economy class) from Boston to Dublin, Ireland (9,600km) = 1.6 metric tonnes of C02e.
The flight carbon calculator determined that our flights emitted 6.8 metric tonnes of CO2e
We used mapmyemissions to calculate emissions from our 9 employees. Another good option is this commute carbon calculator from Stanford University. Mapmyemissions allow you to map your exact journey as well as whether it was by public transport or by car for example. You can also supply additional details like engine size for your car for more accuracy.
When calculating your commutes, it’s going to be more accurate if you have exact data from your employees. However, if you are a larger company it may be difficult to gather all of this information. Many companies will carry out employee surveys to gather this information. If you do not have this data, however you can estimate it using national or regional data figures (e.g. see datausa.io for average commute times and breakdown transportation mode in different locations) which can give a breakdown of how long or far peoples commutes are for example. Also, using tools like mapmyemissions can give you a location based view of the emissions produced for different transportation modes over user defined distances.
For our purposes we had exact data from the 9 employees which broke down as follows:
- 4 driving (5 days per week)
- Average roundtrip commute mileage: 15 miles
- Engine Size: Medium Gasoline
- Resulting in 10 lbs of CO2e per round trip
- Resulting in 2,415 lbs of CO2e per year per employee for 241 working days (261 working days less vacation of 4 weeks)
- Resulting in 9,660 lbs of CO2e for 4 employees driving to work for the year
- 5 using public transport (5 day week)
- Average roundtrip commute mileage: 15 miles
- Commute mode: Public transport (train & underground mix)
- Results in 1.81lbs of CO2e per round trip
- Resulting in 436lbs CO2e per year per employee for 241 working days (less vacation of 4 weeks)
- Resulting in 2,181lbs CO2e for 5 employees using public transport to work for a year
Interestingly the difference between the per trip CO2e output between driving and public transport can really be significant, so if you are looking at areas to reduce emissions that might be a good place to start.
TOTAL: 11,841lbs C02e or 5.4 metric tonnes of CO2e
In section 1, ‘Identifying your emissions’, we referred to the Website Carbon Calculator, for calculating the footprint of your website. We used this to work out that our company website (with 10,000 page views per month) would produce approximately 129kg of CO2e per year or 1.3 metric tonnes of CO2e.
However, since the store actually runs on Shopify, which is carbon neutral, as outlined in detail on Shopify’s environment page, our website is actually carbon neutral. So, because we have chosen a ‘green’ provider, our website does not produce net CO2 emissions.
Based on our records which detailed an average production of 50 wood prints and 50 canvas prints a week, we set about calculating our products carbon footprint using the 2030 Calculator tool.
To use this calculator you firstly input a general overview of your product: it’s weight (544 grams) and whether it is supplied in it’s OEM (original equipment manufacturer) packaging.
Part two of the calculators’ process requires you to input details related to the materials used in the product, the weight and quality of the product, the supplier location and mode of transport used in shipping.
Part three of the calculators’ process requires you to input the manufacturers location, the energy source used by the manufacturer and various other details.
It’s important to note that we did not have access to all of the information that the calculator asked for. Regardless, the calculator gave us a calculation based on the information we could supply, which we felt was ‘good enough’ to give a decent estimate. We calculated that the carbon footprint for a single canvas print was 0.60kg CO2e which resulted in 1,560 kgs of CO2e per year or 1.56 metric tonnes of CO2e per year (0.60 X 50 gifts per week X 52 weeks).
The carbon footprint of our wood print production for the year is 7.8 metric tonnes of CO2e.
Our example online gift company serves a global market; 70% of purchased units are shipped within the US, the other 30% to Europe and beyond. We used DHL’s shipping calculator to determine the carbon footprint of 5,200 gifts per year being shipped to various locations.
When it came to calculating our shipping distances within the US we used our three most common shipping scenarios with the DHL shipping calculator. Basically 70% of 5200 gifts shipped in a year amounts to 3,640 gifts. Analyzing data from our Shopify site allowed us to determine three different shipping scenarios which would allow us to garner an accurate estimation of our shipping footprint within the US. We applied these three scenarios using the DHL calculator as follows:
Example 1: Austin to Orlando (1809km)
Calculation: 1809km (by road) x 1213 gifts = 121.3kg CO2e or 0.1213 tonnes of CO2e.
Example 2: Austin to San Francisco (3166km)
Calculation: 3166km (by road) x 1214 gifts = 206.38kg CO2e or 0.206 tonnes of CO2e.
Example 3: Austin to Boston (2976km)
Calculation: 2976km (by road) x 1213 gifts = 194.08 kg CO2e or 0.194 tonnes of CO2e.
Note the acronym WtW used in the DHL calculator refers to the term Wheel to Wheel energy consumption which covers the entire energy consumption and all greenhouse gas emissions of a fuel caused by production, supply and use in relation to transportation.
Based on our calculations the carbon footprint of 3640 (70%) gifts being shipped within the US per year amounts to 0.5 metric tonnes of CO2e per year.
We employed a similar method to calculate the carbon footprint of the portion of our gifts being shipped to Europe and based on those calculations the carbon footprint of 1560 (30%) gifts being shipped from the US to Europe amounts to 15.366 metric tonnes of CO2e per year.
Adding all this up the total carbon footprint of our company for a year is:
- Buildings Heat: 10.2 MTCO2e
- Buildings Electricity: 25 MTCO2e
- Company Vehicles: 7.7 MTCO2e
- Air Travel: 6.8 MTCO2e
- Commuting: 5.3 MTCO2e
- Website/IT infrastructure: 0 MTCO2e
- Production: 9.36 MTCO2e
- Shipping: 15.9 MTCO2e
With a total emission value of 80.26 MTCO2e for the year.
We used GreenFeet to help calculate and manage our emissions records for analysis with future years, to better understand where we can reduce and to be able to visualize our data. Below shows a visual breakdown per category, per scope and by location.
Visualizing the data gives us a clear view of where the major areas of emissions are. For example we can clearly see that over 43% of our emissions relate to our buildings (electricity and heat), another 41% relates to company transportation, shipping and production (the other category), with the remaining 15% relating to air travel and employee commuting.
We will delve into a deep dive analysis in future blog posts. But we would recommend using a structured tool like GreenFeet for your records rather than an excel spreadsheet, which can be messy. GreenFeet will will let you easily work out where to focus when it comes to reduction or offsetting as well as providing easily shared reporting, data exporting, offset purchasing and future year analysis and comparisons.
Next Steps on your Journey to Sustainability
Once you’ve calculated your carbon footprint, your company is well positioned to reduce it. A fun exercise which may help you place your carbon footprint in context is this calculator from the EPA which gives you everyday examples of how much CO2e you’ve actually used. There are various ways in which to reduce your carbon footprint. You can apply practical measures within your office buildings to reduce the amount of electricity and gas you’re using or you might decide to switch to green energy. You can encourage employees to use public transport or cycle instead of driving. You can seek out services from other providers who are carbon neutral or at the very least sustainability aware. Once you have exhausted all options for reducing your footprint you may want to offset any unavoidable emissions through various carbon offsetting projects. This is something that we’ll talk about in a lot more detail in future blog posts.
Feel free to signup and contact us at GreenFeet if you would like some help calculating your footprint or simply figuring out where/how best to start – take advantage of our free consultancy or ‘Make it Easy Audit’ where we can do all this work for you for only $100 – our mission is to make this easy and cost effective and to help companies of all sizes to become more sustainable.
The important thing for now is that you’ve taken the first steps to becoming carbon neutral or better still carbon negative. Good luck on your quest!