Emission factors are an essential part of accurately calculating the carbon footprint of a company or product, improving environmental, social and governance (ESG) performance and meeting climate goals and regulatory demands.
Emission factors are the amount of greenhouse gas (GHG) emissions produced per unit of activity. They are measured in kg CO2 equivalent (CO2e) over a 100-year period. For example, the consumption of a certain amount of grid electricity would be multiplied by the corresponding emission factor in kg CO2e/kWh to calculate the total CO2e for that activity.
Emission factors are often used to assess a company’s Scope 3 emissions, which are the emissions that stem from a company’s value chain. Specifically, emission factors can help companies quantify the environmental impact of the energy and materials they purchase.
Why Are Emission Factors Important?
In the past, emission factors were most often used voluntarily for eco-design assessments and for marketing efforts. Today, there is growing pressure on companies to quantify, reduce and report their carbon footprints in a manner that’s transparent and auditable. Therefore, having high-quality emission factors for carbon footprint calculations is now a business imperative.
Emission factors are also an important part of improving business operations internally. As an example, for energy companies, emission factors can be used in the decision-making process for improving power plants, investing in new plants or changing energy suppliers to a more sustainable or efficient option.
Quantifying GHG emissions accurately with emission factors also offers several business benefits, including increased access to capital and a greater competitive advantage. It also enables the purchase of renewable energy certificates or carbon credits.
Many companies use emission factors to calculate an internal price on carbon, which helps them assess the risk of future projects as part of their investment decisions. Governments are also following suit, with the U.N. and other jurisdictions levying energy and carbon taxes in response to climate change.
How to Use Emission Factors Consistently and Responsibly
While emission factors are a powerful tool for gaining greater visibility into a company’s carbon footprint, they must be used in a consistent and responsible manner to produce accurate results.
To use emission factors properly, companies first need to consider what goals they’re aiming to achieve and what problems they’re looking to solve with the results. This will determine which data the company will need for the project.
Companies must also determine when the results are needed and to whom the results will be communicated. Will they be shared with internal experts, customers, management, government organizations or the public?
Here are some best practices for using emission factors for carbon footprint calculations, based on a publication written by Martin Baitz, Ph.D., senior life cycle sustainability expert at Sphera:
- If results aren’t what you expected, check the data instead of trying to tweak results.
- Include complete citations of data, software and methods used.
- Don’t mix emission factors data. If data sources are chosen randomly and mixed up, it can be difficult to distinguish between real technical differences and differences in background data.
- Do a deep dive into the results instead of a surface-level analysis.
- Review and compare results using the most up-to-date data possible.
- Be sure to regionalize your data. This is especially important given that supply chains can span multiple countries and production sites may be in different locations.
- It’s crucial to update your data. Supply networks and technology are growing and advancing quickly, and emission factors must be updated as a result to ensure accuracy.
- Communicate the most likely result of your calculations, not the most extreme one. This is crucial when calculations are being done for companies that have complex value chains where energy or supply sources may be unclear. In these cases, assumptions must be made when interpreting the results for communication. Therefore, it’s essential to consider all likely scenarios when communicating the final results, not just the best- or worst-case scenarios.
Key Characteristics of High-Quality Emission Factors Data
If companies don’t use high-quality emission factors data for their carbon footprint calculations, then they can’t expect to produce high-quality results. Companies risk underestimating their emissions impact if they use emission factors data that is incomplete or imprecise, which can lead to greenwashing.
Additionally, if companies rely on emission factors data that is outdated, then the carbon footprint calculation will be too high. When choosing a provider for emission factors data, there are key characteristics that ensure the data it provides is high quality, including the following:
- The data is updated annually and backed by expertise. Emission factors data should be updated annually and validated by a team of experts who ensure the data reflects the latest research, regulatory requirements and industry practices.
- The data comes from industry-accurate sources. High-quality emission factors data is derived from process-based life cycle inventory data that comes from a wide variety of sources, including academic research, official statistics and industry expertise.
- The data is country- and technology-specific. Emissions produced throughout the life cycle of a product or material can vary depending on where and how it’s manufactured. High-quality emission factors data should account for where the material or product was produced and the technology used to produce it.
Ensuring Accuracy and Decarbonization with High-Quality Data
As pressure builds on companies to quantify and report their carbon footprints, they’ll need the most reliable, accurate data possible to ensure regulatory compliance, compete for investments, meet stakeholder expectations and achieve decarbonization and ESG goals.
Without high-quality emission factors data and the necessary expertise to use it properly, companies risk reporting inaccurate carbon footprint calculations. Simply put, high-quality emission factors data combined with responsible and proper use produces the best results.
