Carbon emissions often make up the largest impact hotspot in a company’s operations. And greenhouse gas emissions (GHG) are THE term that is linked to the climate crisis.
Additionally, they have been emphasized by stakeholders, investors, governmental institutions, and norms and regulations as key factors and KPIs in sustainability. So it’s no wonder that these terms are often used interchangeably with the “environmental” footprint.
However, our ecosystems are made up of many different factors that all support each other as a cohesive whole. And- the same goes for the impact your company has on the environment.
By constantly focusing on carbon- or greenhouse gas emissions- aren’t we forgetting the rest of the ‘environment’ in environmental footprint? What are the risks of a tunnel vision on carbon/GHG emissions in your sustainability strategy?
Carbon vs. Environmental footprints
First, let’s clear up a couple of these most popular climate change terms. Because they often seem to be used interchangeably.
‘Carbon footprint (climate)’
A carbon footprint can be calculated by performing a Life Cycle Assessment. It includes all greenhouse gas emissions (GHG) expressed in kg CO₂ equivalents (kg CO₂-eq). These equivalents make it possible to come to a single metric for global warming potential, expressed in tons of CO₂. Even if the global warming effect is not caused by CO₂ but another GHG, such as methane or laughing gas. This footprint is also often referred to with the term ‘climate’, as it includes all relevant greenhouse gas emissions that form a danger to our climate issues.
Now, an ‘environmental’ footprint is the total package. It consists of a wide spectrum of environmental impact category outcomes calculated by a Life Cycle Assessment (LCA), that include climate emissions.
Some of these other impact categories, next to climate emissions are;
- Eutrophication: This impact category covers the impacts on terrestrial and aquatic environments due to the emission of nitrogen containing compounds. Think of over-fertilisation or nitrogen extensive construction processes. A serious issue that is incorporated in many legislations and even puts some construction projects on hold in The Netherlands.
- Acidification: This category indicates the potential acidification of soils and water as a result of the release of certain gases, such as nitrogen oxides and sulphur oxides. One of the more ‘famous’ results here is acid rain. As you can imagine, acidification can heavily impact ecosystems and may even cause damage to buildings.
- Toxicities: Toxicities include both impact on human health as well as ecosystems (freshwater organisms) due to toxic substances that are emitted to the environment. The resulting impact on human health could, for example, be cancer.
- Ozone depletion: This category indicates the emissions to air that cause destruction (a gradual thinning) of the Earth’s ozone layer. It’s also called ozone layer depletion- and causes increased UV radiation levels on our Earth’s surface. This is of course damaging to human health- think of increases in types of skin cancers. But UV radiation also affects agricultural productivity (reduces plant growth).
So- although these two footprint types (carbon/climate & environmental) are calculated through the same means (LCA). An environmental footprint is the only one that discusses all types of environmental impact a company can have on our environment.
There’s more to environmental impact than carbon
It’s true, carbon footprints often plays a large role in a company’s impact on our environment. There’s a reason carbon and it’s notorious brothers and sisters from the greenhouse gas family are so important to our environmental reduction efforts. They contribute significantly to global warming, which results in many different changes in our climate. And this often comes back in a company or product’s environmental scores, such as the environmental cost indicator (ECI).
However, it isn’t always the case that only carbon makes up the biggest environmental impact of your footprint. A good example is the Environmental Profit & Loss Account (EP&L) from Kering Group, which is the mother company of Gucci, Yves Saint Laurent and many other luxury brands. On image 1, you can see that next to GHG emissions (climate) with 35%- land use actually contributes significantly to Kering’s environmental impact with 31%. And so does water pollution with 10% of the total environmental footprint.
Excessive greenhouse gas emissions aren’t our only problem- biodiversity, land use, or water mismanagement (in water scarce countries), are equally pressing issues in our collective environmental crisis. We shouldn’t forget that.
The danger of focusing too much on carbon
Simply put: solely focusing on carbon footprint, can result in too much focus on a single issue in your sustainability strategy. Indeed, by doing so, you can potentially exclude other relevant impact outcomes that could heavily impact the environment as well.
On top of that, ‘forgetting’ other environmental impacts could even negatively affect your carbon reduction efforts. And it’s the same the other way around. Your reduction efforts could increase negative impact in other impact categories. Maybe switching from fossil to biobased resources seems like a good way to reduce emissions in your product’s production. However, this can result in extra land use/use of fertilizers/pesticides- which then negatively affects biodiversity and disrupts local ecosystems.
Our point is: always look at your environmental footprint as a whole. And model your impact reduction efforts accordingly. This way, you ensure you’re not leaving out on anything and your actions aren’t damaging the environment in another way.
Uniting all impact categories into 1 single outcome
Now, it is understandable to think: “These 30+ impact outcomes are a lot– how can I make sure I take all of them into account?”
There are multiple ways to do so. But the best way to unite all your impact outcomes is by linking it to a value everybody knows: money.
There are a couple of ways in which you can do that. The first is by performing an LCA to calculate an Environmental Cost Indicator (ECI). The ECI is a metric used in Dutch construction and links the 30+ impact outcomes to predefined weighing factors (unit/€). For example, 1 kg of CO₂-eq equals 0,05€. As a result, you’re left with one single indicator that can be easily compared and interpreted for investments and/or innovation.
The second, is an Environmental Profit & Loss Account (EP&L). An EP&L is also calculated through an LCA. It works in a similar way to the ECI, but isn’t linked to one specific industry (construction). In an EP&L, LCA Midpoint indicators (the environmental impact categories previously mentioned) are calculated and subsequently monetized (€) as well. An effective way to create an inclusive sustainability policy, that everyone will understand.
Read more about how our customer Philips uses an EP&L to report their Environmental Profit and Loss- right here.