Carbon footprint of a company: legal obligation and example

Did you know that since 2010 it is mandatory for companies with more than 500 employees to carry out a carbon footprint? How to calculate a company's carbon footprint? Which companies must do a carbon footprint? What is a company's carbon footprint? All the answers are in this article.

  The carbon footprint is a diagnostic tool for greenhouse gas emissions.

What is a company's carbon footprint ?

  The carbon footprint is a methodology for diagnosing, measuring and analyzing greenhouse gas (GHG) emissions, targeting companies, but also local authorities, establishments open to the public and individuals. It does not only concern carbon dioxide but also other gases, such as methane or nitrous oxide. Please note: the carbon footprint does not concern the company's products. The realization of a carbon footprint is mandatory for some companies, every four years. To carry out this diagnosis, the company can turn to calculation tools offered by partners. Association pour la transition Bas Carbone (Association for the Low Carbon Transition) and the company. The historical partner of the Bilan Carbone realization is the Association Bilan Carbone (ABC), today Association for the Low Carbon Transition. Following the creation of the Bilan Carbone as a diagnostic tool by ADEME in 2004 and the registration of this trademark, its management was entrusted to the Association Bilan Carbone in 2011. The ABC provides companies with the official methodology for quantifying greenhouse gas emissions called Bilan Carbone. An official Bilan Carbone software is also available, in order to facilitate the realization of its climate diagnosis, by simplifying the accounting of GHG emissions.  

Bilan Carbone ADEME with Excel

  Thanks to the resources made available by ADEME and the Low Carbone Association, it is possible to carry out a carbon footprint assessment with a simple Excel spreadsheet, even if this is naturally more tedious than with adapted software. To do so, you will have to rely on the ADEME methodology to account for your emissions. These resources are available on the ADEME website, for free.

Which companies must do a carbon footprint?

According to article L.229-25 of the Environment Code, companies with more than 500 employees are required to carry out a carbon footprint every 4 years. Pursuant to Article 244 of the 2021 Finance Act, Decree No. 2021-1784 of December 24, 2021 also provides for the establishment of a simplified greenhouse gas emissions assessment for companies with more than 50 employees and receiving aid under the "Recovery Plan”.  

How to do a company carbon footprint

  The diagnosis of greenhouse gas emissions, or carbon footprint, can be carried out by the company with or without specialized software, or entrusted to an external service provider.  

Is it mandatory?

  Carrying out a carbon footprint is mandatory when the company is concerned. If the legislation previously provided for a fine of €1500, since 2019 this penalty has been re-evaluated to €10,000 fine, and up to €20,000 in case of recidivism. The companies concerned are obliged to transmit their carbon footprints every 4 years to ADEME via their IT platform.  

How to calculate a company's carbon footprint?

  According to ADEME's methodology, the Carbon Footprint is carried out in six main steps:

1. Preparing
2. Collect the data
3. Calculate the GHG footprint of its entity
4. Presenting the GHG footprint
5. Plan its reduction actions
6. Launching the action plan

  To learn more, you can consult the details of the steps to calculate a company's carbon footprint here.  

Calculating a company's carbon footprint

To account for its emissions, it is necessary to reference all the sources of emissions as well as the different greenhouse gases released.   Six gases are accounted for:

1. Carbon dioxide, the best known GHG;
2. Nitrous oxide, which concerns transport, the chemical industry and agriculture;
3. Methane, linked to the fossil fuel production and intensive livestock farming;
4. Hydrofluorocarbons, used in refrigerators and air conditioners;
5. Perfluorocarbons, linked to the production of aluminum and semiconductors;
6. Sulfur hexafluoride, used in electrical cables and equipment.

  In order to calculate the total emissions with a standard calculation unit, the different emitted gases are converted into CO2 equivalent. Thus, gases that have a much more harmful effect than carbon dioxide in equivalent quantities are scaled up. In the emissions accounting phase, all sources of GHGs are referenced and added together to make the balance. Transport in terms of kilometers travelled, quantity of raw materials consumed, dispatch of finished products, heating of premises... All the emission sources have a known carbon equivalent and are referenced by ADEME. The first phase of collection is therefore the accounting of the emission sources. It will be necessary to record and measure over the year:

• what is purchased externally: office supplies, tools, vehicles, external services, gas and electricity, fuel, etc.
• What is moved: employee travel, freight, deliveries, company vehicles, business travel, etc.
• What is used for the company's activity: inputs, surface area, construction of buildings or warehouses, etc.

  This major data collection must be spread over a set period, generally one year, in order to have all the data. The data will then be converted into carbon equivalents over the year, in tCO2e/year, which will give an overview of the annual carbon emissions of your company. Activity data can be converted to carbon equivalent in two ways: by a monetary approach or by a physical approach. Depending on the emissions item, you can use one of two mentioned approaches to calculate the carbon equivalent. The monetary approach consists in applying the carbon equivalent directly to the cost in euros of the data. For example, paying for an external IT service for 1000€ will have its carbon equivalent. Conversely, the physical approach materializes a consumption of a physical resource. 1000 km by truck represents a quantity of fuel consumed, and therefore an equivalent in kgCO². All these emission factors and carbon equivalents are available on private or public databases. At ADEME, the Base Carbone is the authority. Access to the emissions calculation is free. Of course, the more precise your basic data is about your consumption, the more precise your carbon footprint will be at the end. It is precisely this accuracy that is sought, to be able to act in the future on its GHG emissions.  

Example of a carbon footprint in a company

  Let's now take an example of carbon accounting in a small company to illustrate the point. Mr. Dubois is a carpenter and joiner, and works with one employee. They have a van, a workshop and their own tools. Their activity consists in assembling kitchens, dressing rooms or shelves in private homes, coming to the home to make estimates and assembling the fittings. To realize the carbon footprint of his activity, Mr. Dubois will have to count over the year :

• How many kilometers did they travel to go to their customers' homes ;
• How many kilometers did his employee travel to come to work;
• How many wood, furniture and hardware resources they consumed;
• How much energy did they consume for their power tools, to heat the workshop,
• If they had materials delivered to their workshop, if they used outside services;
• What is the volume of waste produced during the year?
• Etc.

  All these activity data, once accounted for, will have their carbon equivalent expressed in tCO2/year. Depending on the emission factor, Mr. Dubois will be able to calculate with the physical or monetary approach.

Now you know all about a company's carbon footprint

As we have seen, the carbon footprint is a very precise tool for accounting for greenhouse gas emissions. In addition to being mandatory for many entities and companies, it must be renewed on a regular basis. Although having one carried out is expensive, there are now subsidies that can cover up to 80% of the cost of carrying out your company's Bilan Carbone.

To find out more, take a look at the following articles:

‣ Carbon footprint: definition and example ‣ Carbon footprint of a company: legal obligation and example ‣ Personal carbon footprint: how to calculate it ? ‣ What is the carbon footprint of the average French person?