With ClimateTrade, organizations can easily calculate their CO2 emissions.

Faced with the heated discussion about the climate crisis and the urgency of taking effective actions to reduce the consequences of global warming, many companies are beginning to work on their ESG (Environmental, Social and Government) objectives. Among which is the “calculation of the carbon footprint”, which allows them to visualize a clear panorama of the impacts caused to the environment resulting from their business models.


Do you know what the Greenhouse Gas Protocol (GHGP) is?

 Many companies have adopted the standards established by the Greenhouse Gas Protocol (GHGP) as it provides accounting standards, calculation tools, and reporting. 

 This protocol establishes a comprehensive, global and standardized framework to measure and manage greenhouse gas (GHG) emissions from operations, value chains, or products for companies and organizations.


Calculation of the carbon footprint, accounting of emissions

 With this protocol, emissions can be classified into three areas:


Scope One: Direct GHG Emissions

 It includes all the direct GHG emissions of a company, such as those from the combustion of fuels in its facilities (for example, natural gas, propane, fuel oil, etc.). Also those of fuels for company vehicle fleets (goods and people). They can begin to be counted from the invoices of the suppliers with the breakdown of the liters or cubic meters they supply.


 Scope Two: Indirect GHG emissions associated with electricity

 Indirect GHG emissions generated by electricity, process heat or cold, or steam used in processes. They can begin to be counted from the invoices of the energy supply companies with the breakdown of the kilowatt-hours, therms or cubic meters that they supply.


Scope Three: Other indirect emissions

Other indirect GHG emissions. It includes those that are not covered in the two previous scopes within the supply chain. They tend to focus on the activities of suppliers and distributors, which is, everything that is produced outside their own facilities and buildings, so they would be the most difficult to identify.


What to include in Scope three of the Carbon Footprint of an Organization?

 In particular, it is recommended to include:

  • the emissions of the means of transport used in the movements of workers from their residence to their workplace, to and from
  • emissions from company trips by executives or middle managers, especially air flights, trips by private or rented car, hotel stays, boat or ferry trips
  •   emissions from outsourced computing services, such as cloud services
  • the emissions of the logistics companies collecting or delivering the products.


It is worth noting that Scope Three emissions in certain sectors is the largest source of emissions, especially by suppliers, distributors or carriers.

To help companies conceptually with the calculation of the CO2 footprint, the main activity carried out in their own facilities is divided into “upstream” and “downstream” activities.

 Emissions “upstream” include those that occur in the life cycle of a product, from the purchase and entry of raw materials or components, all manufacturing, to the exit of the manufacturer or producer’s facilities.

 While the so-called “downstream” emissions occur in the life cycle of a product after sale, that is, including distribution and storage, use of the product and until the end of its useful life.


API ClimateTrade: manages and accounts for CO2 emissions 

APIIn order for large multinational companies or polluting corporations to reduce the carbon footprint of scope 3, for example, by involving their suppliers, advanced digital tools are available, such as the ClimateTrade API: a customized Application Programming Interface for each sector that allows managing and accounting for the emissions of the members of the supply chain and their compensations.

Thanks to decentralized blockchain technology, consensus and clear rules are generated between suppliers and a control dashboard can be used to encourage suppliers to be carbon neutral through the purchase of online offsets. In the ClimateTrade marketplace, the members of the supply chain can offset scope one through EUAs emission rights, and in the case of scope two with renewable energy certificates of origin such as IRECs.


Interested? Complete your registration and talk to our experts.


Article written by Francisco Martín, Head of Engineering.