Understanding Carbon Management: A Guide for Manufacturing and Production Companies
Manufacturing and production companies must adopt carbon management to meet new regulations, reduce costs, and enhance sustainability and competitiveness.
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Coupled with the imperative to drive innovation and efficiency, manufacturing and production industries face a pressing mandate: carbon management. Amidst heightened global concerns regarding climate change, these sectors stand as substantial contributors to carbon emissions. The necessity to curb these emissions extends beyond regulatory compliance; it’s an urgent call to mitigate environmental impact, cut operational costs, and fortify market competitiveness.
With new mandatory non-financial and sustainability reporting under the EU's Corporate Sustainability Reporting Directive (CSRD) in effect since January 2024, companies in the EU are under growing pressure to cut emissions and commit to reduction targets.
So what exactly does carbon management entail? SE dives into this topic to give you a quick overview of what carbon management is and how to incorporate it into your business operations.
What is Carbon Management?
Carbon management is increasingly important because emissions reporting is now mandatory for many UK and EU businesses. At its core, carbon management refers to the comprehensive understanding, assessment, and mitigation of carbon dioxide (CO2) and other greenhouse gas (GHG) emissions stemming from business activities.
When companies think about their carbon management plan, they need to think about emissions from all sources. They need to understand where their carbon emissions are coming from and how they can reduce them. Companies should look at their largest sources first and assess where they can have efficiency gains to reduce their carbon footprint.
Carbon Management in Practice: Key Strategies
Understand Your Emissions Baseline
You might have heard of the terms - carbon inventory, carbon footprint, or carbon assessment - which are all synonymous with the breakdown of how much carbon you produce across different areas of your business. Your company’s carbon footprint is a measurement of your organisational activities over a period of 12 months. It involves calculating your carbon emissions to get a full picture of your company’s overall impact, which includes:
• Scope 1 emissions: These are direct emissions from sources your organisation owns or controls directly, such as fuel for boilers, furnaces, and vehicles.
• Scope 2 emissions: These are indirect emissions from the energy your organisation purchases and uses, such as electricity, steam, heat, or cooling.
• Scope 3 emissions: These are emissions your organisation is indirectly responsible for, up and down its supply chain. For example, the supplier emissions from sourcing raw materials or distributor emissions when shipping your products.
Calculating your carbon emissions is essential for complying with reporting requirements, but it can be a complex process. Measuring your scope 1 and 2 emissions is easier because you can track those within your organisation. Calculating your scope 3 emissions is more challenging because you don’t control or necessarily have access to that data. However, this usually comprises the bulk of your company’s greenhouse gas emissions.
For most businesses and public bodies, the majority of their GHG emissions and cost reduction opportunities are outside their own operations. The Greenhouse Gas Protocol provides detailed guidance for calculating your scope 3 or supply chain emissions. Start by talking with your primary suppliers and request essential operational information like energy usage, water consumption, transportation, and shipping details to determine how much of these emissions relate to your organisation’s operations.
Once you’ve calculated your scope 1, 2, and 3 emissions, you’ll have an overall measurement of your company’s carbon footprint. This serves as the starting point for your future efforts to reduce carbon emissions.
Perform a Life Cycle Analysis for Your Products or Services
A life cycle assessment examines your organisation’s carbon dioxide emissions and other environmental impacts throughout the entire lifespan of your product or service, starting from production to disposal. To conduct this assessment for your products, outline their complete journey from beginning to end, which involves:
• Sourcing or extracting raw materials
• The manufacturing process
• Transportation or distribution of the final product
• Additional emissions during its use, such as from replacement parts
• Recycling, repurposing, or disposal at the end of its life cycle
After mapping these stages, calculate the relevant greenhouse gas (GHG) emissions at each phase of the product’s life. This approach offers a fresh perspective on your company’s carbon footprint. By analysing emissions at various stages, you can identify opportunities to reduce carbon output throughout your products’ lifespan from a carbon management standpoint.
Utilise a Carbon Management Framework to Prioritise Goals
Once you’ve identified where your emissions come from, you can transform this understanding into an actionable plan. A widely used approach known as the ‘carbon management hierarchy’ offers guidance (see the diagram below).
This framework outlines the recommended steps for managing your carbon footprint. It’s important to note that following these stages sequentially isn’t mandatory. For instance, you can start offsetting your operations immediately while simultaneously devising ways to decrease emissions. Use this framework as a tool to explore various solutions. The larger section at the base of the pyramid outlines the best potential course of action if you can achieve it; otherwise, you progress up the pyramid to explore alternative strategies.
Implementing Energy Efficiency and Conservation Measures
Implementing energy efficiency and conservation measures is crucial for decarbonisation. This includes upgrading facilities with energy-efficient technologies, optimising heating, ventilation, and air conditioning (HVAC) systems, and adopting smart building management practices.
HVAC accounts for half the total emissions in the built environment. By significantly reducing energy consumption and waste from heating and cooling in buildings, operational costs and environmental impact could be greatly reduced.
Conclusion: Why Should Your Business Adopt Carbon Management Practices?
Integrating carbon management is pivotal for any business aspiring to operate sustainably and contribute positively to the environment. The pressure to act is now in full force, and it is not just from policymakers; it also comes from stakeholders, including employees and investors. The advantages of carbon management extend beyond environmental impact:
• Cost savings: Opting for eco-friendly alternatives not only aligns with environmental goals but also saves on expenses.
• Regulatory risk reduction: Proactive carbon management shields businesses from stricter future climate regulations.
• Stakeholder alignment: Addressing climate concerns meets expectations of investors, customers, and employees.
• Competitiveness and innovation: Leading in sustainability sets businesses apart and fosters innovation.
About Symphony Energy
Symphony Energy is an engineering technology company specialising in HVAC energy optimisation. We combine deep engineering knowledge with smart technology to reduce the energy demand of commercial buildings. Symphony Energy’s solutions can reduce the HVAC energy costs of buildings by up to 80% — without the need for invasive retrofits or costly equipment.
Take the first step towards reducing your carbon footprint by requesting a free and non-binding demo with one of our experts today and find the solutions that best fit your business needs.
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