Carbon Added Accounting: reliable CO2e footprint of products bases on concrete company data
As a company, you must report, allocate and reduce your CO2 emissions. Customers, governments, consumers and banks ask and demand reliable emission data. Also at product or service level. So you need concrete data: from your own company and from all suppliers in the chain. But how do you handle this? Topsector Logistiek developed a uniform methodology for the entire production chain: Carbon Added Accounting. You can get started right away with the existing company data. this way you create a uniform record of your footprint, you demonstrably and easily comply with (future) laws and regulations and you gain insights to effectively optimise business processes and make them more sustainable. Joost Wesselman of Wesselman Flowers shares his experiences.
Consequences of European CO2 legislation
The European Climate Agreement stipulates that companies must reduce their CO2 emissions by 55% before 2030. Companies subject to the CSRD must therefore include their environmental impact in their annual report from as early as the 2024 financial year. Scope III in CSRD further requires companies to report their emissions at product level, so that governments, customers and consumers can make environmentally conscious choices. For this, they need all the emission data from their suppliers. Even if they operate outside the EU. This is made possible by the so-called Carbon Border Adjustment Mechanism (CBAM). Companies pay a CO2 import tax on the footprint of products they import into the EU.
Furthermore, from 2027 onward, residents of the EU will have to pay for the greenhouse gas emissions they cause. Therefore, to make the emissions of every product and every service demonstrable and verifiable, transparent, uniform data is required for the entire chain.
All this legislation makes the footprint of your products and services an essential KPI of your company. It may initially seem difficult to make this demonstrable, especially if you are a link within a supply chain. However, with the Carbon Added Accounting method it is feasible. Simply using the company data you already have.
What is Carbon Added Accounting?
Carbon Added Accounting is a practical method for CO2 accounting throughout the entire production chain. It is roughly comparable to the VAT that you charge for your part of the work. You charge on your share of CO2e emissions. Since you also state an indication of the quality of your own data and that of predecessors in the chain, the reliability and accuracy of the ultimate figures become clear. This is not only important for the companies themselves, but also for accountants, governments and consumers. This way they can make well-considered, sustainable choices. Ultimately, you arrive at the total CO2 footprint of a product or service: the footprint of the entire chain. Carbon Added Accounting has been set up in such a way that it ties in with existing accounting methods. Financial directors, controllers and accountants who have worked with it state that this method makes it easy for them to work with it.
Existing company data suffices
Joost Wesselman, director-owner of Wesselman Flowers and Tulpen.nl, started working with Carbon Added Accounting together with Topsector Logistiek. “I think you should set up your company in such a way that you can ultimately operate sustainably. That’s the way to go. It’s not as if we’ll have achieved that by tomorrow, but it’s our aim to do better every year.”
To achieve this, they are now supplying all the data they have to Topsector: about energy consumption, production, locations, surface areas, the number of kilos of packaging, etcetera. Joost: “They then apply their calculations, the Carbon Added Accounting method, to this. It even goes so far as us bringing them into contact with our suppliers of, among other things, bulbs and machines. They follow that up straight away. For example, we now know the footprint of the machines we use, which therefore gives us more and more insight into our own footprint.
This of course requires an effort on our part, but it is great that such an umbrella organisation has the manpower and resources to make it possible for us to take this step. The width of the project, in which all our business processes are analysed, the way they approach it, the experience they bring and how deep they dive into the matter: that makes it very interesting for us.”
Coming up with the method together
But what is it like to work with Carbon Added Accounting? “Retrieving the data is fine,” says Joost, “but I still find it difficult to get to grips with the footprint calculations. I still need the expertise of Topsector to do them. And coming up with the methodology together, that’s something else too. For example, in the past we have taken over companies. How do you calculate the carbon footprint of such an existing company? Those people from Topsector immediately start asking questions about that. Because you actually have to write off that footprint over x number of years. With things like that, it’s good to have people with experience involved. They just think things through thoroughly, start following it up immediately and also implement it in the calculations straight way. That really takes us a step further.”
“We are now working on calculating the emissions per tulip. That’s fairly new in the industry, calculating the footprint per tulip, bunch or sales unit across the entire chain. In the short term, we can really say something about that.
It’s also very instructive to see where we are now and where we were five years ago. It clarifies which measures are effective and what we have achieved already. Based on the data coming from the systems, we can monitor and evaluate our processes and measures and map out and compare the effects. This in turn provides the tools to plot a path to the future, in which we will be producing more and more sustainably.”
Soon you can read the whole story of Joost Wesselman, including the results of the project, on our site.
Do you want to have more information? Please contact us.