More and more companies are choosing to prioritise sustainability as they grow. But beyond the products and partners they select, how can they ensure that they make the best environmental decisions? For many companies, it starts with the CO2 footprint. Companies want to lower CO2 impact and need innovative technology to help them a) measure it and b) see how they can reduce it.
As a planet, many of us are seeking to lower our carbon footprint to combat climate change. Individuals and companies alike; everyone has a CO2 footprint. You can calculate it by adding all associated greenhouse gas emissions and converting them to CO2 values.
The CO2 footprint measurement looks at both direct and indirect emissions. Direct emissions are calculable emissions that can be tied to a specific action. For example, taking a plane trip, or turning up the heating are both actions that have a direct impact on carbon footprint generation. Whereas indirect emissions are caused by things like the manufacturing of a product you buy, for example.
Businesses have several good reasons to focus on sustainability, including proposed regulations from the Securities and Exchange Commission (SEC) in the US. And the soon-to-launch Corporate Sustainability Reporting Directive (CSRD), which affects the EU (and businesses with EU entities), corporate social responsibility, and competitive advantage for stakeholders like investors, customers, and employees.
But what aspects will affect your CO2 emissions?
· Ground transport: What kind of transport do employees use? The car, public transport, a bike? And what type of fuel?
· Air travel: Is there any business-related air travel?
· Heating: Are renewable energy sources used in your office building? Is the heating turned down?
· Electricity consumption: What kind of electricity is used and how much?
· Waste: Do you produce much waste, and is it separated?
Companies that calculate CO2 footprint look at three components (scopes) to work out their emissions. These include:
Environmental, Social, and Governance (ESG) legislation, like the CSRD will target more businesses come 2024 (including +3000 in the US), and many companies are looking to get ahead of the game with scores, certifications, and initiatives that help drive their overall sustainability strategies.
One such initiative is B Corp certification. This certification shows that a company not only has financial value and interests but also adds value in terms of sustainability. Obtaining this certification is challenging and time-consuming but ultimately worthwhile for many organisations.
Besides mapping CO2 emissions, your goals will likely include a reduction target. You can start by looking through your business processes to see where to reduce emissions, for instance, in production or business travel policy.
You can also look at the companies you buy from, whether you can be more sustainable in the office, and whether you can encourage more sustainable transport options as a business.
Struggling with working it all out? Intelligent expense management software can help.
At Payhawk, finance teams are able to customise our innovative spend management solution in ways that can help support company-wide ESG initiatives if they choose.
For example, your financial controllers might set approval workflows around certain limits to help ensure that employees don’t spend a lot on car hire but consider the train instead. They might also encourage employees to take advantage of subscription tracking software for things like buying monthly train tickets, parking subscriptions, and so on.
Your financial controllers can also set up business travel policies in TravelPerk (which we integrate with) to clearly outline what is and isn’t allowed for corporate travel within your company and seamlessly link it to our corporate cards and expenses.
Getting visibility over CO2-impacting expenses is a big benefit too. By setting custom fields and categories within the tool to reflect different transportation for example, you can easily see fuel expenses, ticket costs, and more (and see what project they're related to).
Finally, the software allows budgets to be set up for sustainable initiatives. Payhawk can help allocate budgets to sustainable initiatives and CO2 reduction measures.
Of course, Payhawk itself is also doing its bit. We're currently in the process of obtaining our B-Corp certification and working with Plan A to take control of our impact. As our CEO Hristo Borisov says:
"Plan A has given us immense support in streamlining our carbon accounting processes and reporting. They provided us with the tools to measure our company's emissions, assess our decarbonisation potential, and prepare for the regulatory shifts impacting our ever-increasing international footprint."
Interested in taking control of your company spend and getting better visibility into expenses (including those with a carbon impact)? Book a demo today.
Whether you have tens, hundreds, or thousands of employees, we’re making your business spend work for you, giving you control over spending at scale with a single solution. Say goodbye to tedious finance tasks, schedule a demo with us today.