Calculate and Improve Your Company's GHG Footprint

First of all, conducting a greenhouse gas inventory (GHG) allows a company to accurately assess its carbon footprint and understand the primary source of each of its greenhouse gas emissions. 

The main difference between the Carbon Footprint and the GHG Footprint lies in the definition of the scope of emissions accounting.

Under ADEME’s methodology, the calculation of the GHG footprint takes into account the entire life cycle of the products or services provided by a company’s operations. This allows for a comprehensive assessment of the operations’ GHG emissions and helps identify potential areas for reduction.

Greenhouse gas (GHG) emissions are calculated based on energy consumption, using conversion factors specific to each energy source. This allows for standardized measurements and results in an emissions figure expressed in carbon dioxide equivalents (CO2e).

In other words, it involves multiplying its activity data (in kWh, units, liters, or euros) by an emission factor (the average amount of greenhouse gas emissions per unit of its activity data).

Beyond regulatory requirements (particularly since Decree No. 2022-982), conducting a GHG inventory is an essential step for a company because it allows it to identify and list the sources of greenhouse gas emissions directly or indirectly related to its operations.

Conducting its first GHG inventory will provide an initial assessment and help identify the main sources of emissions. This will make it all the easier to identify potential reduction opportunities and develop a low-carbon strategy for the company.

Conducting GHG inventories on a regular basis will provide an opportunity to adjust the company’s action plan and ensure that it meets its goals for reducing its environmental impact.

To accurately measure a company’s greenhouse gas emissions, it is necessary to identify all of its emission sources. It is therefore necessary to collect data on its operations:

• Energy consumption (gas, fuel oil, diesel, gasoline, electricity, etc.)
• Assets under depreciation (real estate, vehicle fleet, IT equipment, furniture, etc.)
• Purchases of goods (raw materials, supplies, food products, etc.)
• Purchases of services (Internet subscriptions, equipment maintenance and installation, service provision, fees, etc.)
• Travel: employees’ commutes to and from work, business travel, visitors and customers, etc.
• Freight Transport
• Disposal
• Use and end-of-life of its products.

Although it is recommended to be as comprehensive as possible over time when identifying sources of spending, you can start with financial data and refine the accuracy of that data over time. We recommend that you take a step-by-step approach to your budget review, starting with your largest expenses at the outset.

Reducing your company's carbon footprint involves several steps:

• Calculate Your Carbon Footprint for the First Time
• Identify the largest sources of emissions and identify ways to reduce them by improving the accuracy of the data used for measurement
• Involve your suppliers by asking them to calculate the carbon footprint of the goods and services they provide. This will make the measurement more accurate, and you will then be able to implement a responsible procurement strategy.
• Develop an action plan and a strategy for monitoring progress over time to ensure its successful implementation and effectiveness.

Since the Grenelle II Act (2010), the following organizations are required to conduct a regulatory GHG inventory (BEGES) every 4 years (every 3 years for the federal government and local governments):

• Companies with more than 500 employees in metropolitan France (250 in overseas territories)
• Public institutions with more than 250 employees
• Local governments with more than 50,000 residents
• The Government and Its Agencies

This report must be published on the ADEME platform and accompanied by a transition plan outlining the proposed reduction measures.

This decree strengthened existing requirements by mandating:

• Inclusion of Significant Indirect Emissions (Scope 3) in the Regulatory Report
• The publication of a transition plan that includes quantified reduction targets and a timeline for implementation
• Financial penalties of up to €10,000 (€50,000 for repeat offenses) may be imposed if the financial statement is not prepared

Since January 2024, the CSRD has been gradually expanding non-financial reporting requirements to European companies. It mandates the disclosure of detailed information on GHG emissions in accordance with the ESRS (European Sustainability Reporting Standards), including:

• A comprehensive GHG inventory (Scopes 1, 2, and 3)
• Emissions reduction targets aligned with the Paris Agreement
• A Climate Transition Plan

In 2025, the CSRD will apply to large publicly traded companies, and will then be extended to publicly traded SMEs starting in 2026.

Beyond regulatory requirements, conducting a voluntary GHG inventory makes it possible to:

• Anticipate future regulations that will gradually apply to a growing number of companies
• Meeting the expectations of investors, contractors, and customers regarding climate transparency
• Identify opportunities for cost savings by optimizing energy and resource consumption
• Strengthen the company's brand image and employer appeal