Spotlight on companies for carbon footprinting
Fàtima Vidal Ayuso
Faculty at Business & Management Strategy Dept.
Carbon footprint can be defined as the impact that human beings cause on the environment, as an indicator that measures the greenhouse gas (GHG) emissions that we emit into the atmosphere and is quantified from CO₂. As we know, GHGs accumulate in the Earth's atmosphere and cause the absorption of infrared energy from the sun, thus creating the so-called greenhouse effect, which increases the global temperature of the planet. This is a matter that is on the order of the day, as the Earth's temperature continues to rise.
Under the Spanish Climate Change Law, companies will have to measure their carbon footprint, as well as prepare and publish greenhouse gas reduction plans
Although it is true that this issue has been in the public sphere for years due to its relevance for society, the first real steps at the European level to address it were taken with the Paris Agreement (2015) and were reinforced at the United Nations General Assembly with the creation of the 2030 Agenda for Sustainable Development. This las meeting marked the beginning of a global agenda towards sustainable development that involves transformations in current economic models, such as a new social model of prosperity that takes into account the limits of the planet.
Spotlight on companies
During the first months of the pandemic, CO₂ emissions were reduced in most countries as a result of lockdown and the stoppage of mass production. At the European level, one of the most striking figures was recorded by Spain, which reduced greenhouse gas emissions by almost 20%.
To support European guidelines and fulfill the 2030 Agenda, Spain passed the Climate Change and Ecological Transition Law, which aims, among other things, to raise awareness of the effect of the carbon footprint of companies on the planet and to implement plans to reduce emissions to make Europe more sustainable and climate neutral.
With the implementation of this new regulation, companies will be in the spotlight, as they will have to control the high CO₂ emissions they may generate. Thus, they will be required to calculate their carbon footprint, as well as to draw up and publish GHG reduction plans. However, although the Law has already been approved, it has not yet been established what type of companies and sectors it will affect.
More than 650 companies in Europe are already calculating their carbon footprint or plan to do so in the next two years, according to data from the report Putting a price on carbon, carried out by the international non-profit organization Carbon Disclosure Project. Geographically, businesses located in countries such as France, Germany, Spain or the United Kingdom are the leaders in this initiative.
More than 650 companies in Europe are already calculating their ecological footprint, especially in countries such as France, Germany, Spain and the United Kingdom
It should be borne in mind that not all companies contribute in the same way to global warmings, since this impact depends on casuistry such as the sector in which they are located, the products they manufacture or the services they offer, among others. This situation means that there are industries in which it is urgent to carry out this count, such as fossil fuels or energy, two of the most polluting.
However, the diversity of industries and sectors implies a wide variety of prices for calculating the carbon footprint. The enormous diversity seen in the case of Europe is striking. As the above-mentioned study shows, the price range in the last years has been between $28 and $532 per tonne. A price fluctuation that has increased in recent years, as more and more companies are subjecting themselves to these calculations.
Wide diversity of business sectors means a wide range of princes for calculating the ecological footprint: during 2021, the scale has ranged from $28 to $532 per tonne
Among the more than 5,900 companies surveyed in the study, the vast majority agree that knowing the impact of their ecological footprint has helped them pursue different goals, among which the following out:
- Boost investment with lower CO₂ emissions generation
- Improve energy efficiency
- Encourage internal behavioral change
- Identify and take advantage of opportunities with lower GHG emissions
Taking into account these assessments, the application of the new regulations in Spanish territory could lead, together with the promotion of other incentives, to a notable change in the philosophy of companies, leading them to also seek community objectives based on the reduction of emissions and investment in sustainability.