The reality is that the natural world is changing and we are totally dependent on it. It provides our food, water and air. It is the most precious thing we have and we need to protect it.” Sir David Attenborough

The European Climate Law sets a legally binding target of net zero greenhouse gas emissions by 2050. EU Institutions and Member States are obliged to take the necessary measures at EU and national level to achieve the target.

The Green Deal introduces important obligations and regulations for organizations to calculate, manage and report their carbon footprint. These regulations of the European Union provide important steps towards a sustainable future. With this awareness, organizations must work together for a sustainable world, develop strategic plans to comply with these regulations and take the necessary steps to manage their emissions.

What is Corporate Carbon Footprint?

Corporate carbon footprint refers to the sum of greenhouse gases emitted directly or indirectly into the atmosphere as a result of an organization’s activities. This concept is recognized as an important tool for measuring and managing environmental impacts. Carbon footprint calculation evaluates greenhouse gas emissions from energy consumption, transportation, production processes, waste management and other operational activities of organizations. This calculation is very important in terms of combating climate change and realizing sustainability goals.

What are the Carbon Footprint Calculation Methods?

Corporate carbon footprint calculation and reporting can be made according to ISO 14064 and GHG (Green House Gas Protocol) for the specified reference year.

The corporate carbon footprint is generally divided into three main categories:

Direct Emissions (Scope 1): Emissions from sources owned or controlled by the organization. For example, fuel use in production facilities or exhaust gases from vehicles, heating systems, etc. fall within this scope. Emissions from sources under the entity’s own control.

Indirect Energy Emissions (Scope 2): Emissions purchased from energy sources such as electricity, steam, hot water used by the organization.

Other Indirect Emissions (Scope 3): Emissions from sources beyond the organization’s control, such as its supply chain, product use, business travel, operational activities and waste management. This category often requires a more complex and comprehensive calculation.

The ISO 14064 standard, on the other hand, divides Scope 3 emissions into four more headings and examines emissions under a total of 6 categories.

The Importance of Corporate Carbon Footprint Management

Managing the corporate carbon footprint provides the following benefits for organizations:

1. Mitigating Climate Risks: Reducing carbon emissions reduces the risks associated with climate change and increases organizations’ resilience to future regulatory and financial risks.
2. Competitive Advantage: Environmentally friendly practices and a low carbon footprint help organizations stand out in the market competition and play an important role in customer preferences.
3. Regulatory Compliance: Managing carbon emissions facilitates regulatory compliance and helps avoid potential penalties.

Legal Obligations and Regulations

Many countries and regions have introduced legislation requiring the calculation and reporting of carbon footprints.

In Turkey, there are various regulations and legal obligations related to carbon emissions:

1. Reporting of Carbon Emissions: In Turkey, large-scale industrial facilities and energy consumers are required to report emissions under the Carbon Emissions Regulation. This regulation helps Turkey to reach the targets of a carbon emission trading system in line with the European Union (Carbon Emission Regulation July 2010 Official Gazette: 27605, Regulation on Carbon Emissions Trading September 2013 Official Gazette: 28744)
2. Ministry of Environment and Urbanization Regulations: The Ministry has issued various regulations and directives on carbon emissions. Companies are required to comply with these regulations and regularly report their carbon footprints. (Communiqué on Reporting and Monitoring of Industrial Carbon Emissions, March 2014, Official Gazette: 28924)
3. Sustainability Reporting: Especially large companies are obliged to disclose their carbon footprint in their sustainability reports. These reports are both recognized as a legal obligation and taken into account by investors and the public. (Communiqué on Sustainability Reporting November 2019 Official Gazette: 30911)

The “Green Deal” is a comprehensive strategy to achieve the European Union’s goals of combating climate change and sustainable development. The Green Deal has introduced various regulations and obligations, especially for companies and organizations in European Union countries. One of these regulations is the section on corporate carbon footprint and emission management.

Sections of the Green Deal on Corporate Carbon Footprint are given below:

European Climate Law and Carbon Emissions1. European Climate Law and Carbon Emissions

This law, adopted in 2021, sets Europe’s net zero emissions target by 2030. It includes emission calculation and reporting obligations for companies.

• Main Target: Reduce emissions by at least 55% by 2030 compared to 1990 levels.
• Company Obligations: Companies are required to calculate and report their emissions and take the necessary measures to achieve their reduction targets.

2. European Emissions Trading System (ETS)

This system, which started in 2005, controls carbon emissions through trading. Covered sectors can buy and sell emission rights.

• Obligations of Companies: Covered companies must regularly submit emission reports and obtain the necessary emission allowances.
• 2021-2030 Period: The ETS sets emission reduction targets and market arrangements in line with the European Climate Act.

3. Corporate Sustainability Reporting Directive (CSRD)

Adopted in 2021, this directive regulates the sustainability reporting requirements of large companies and publicly listed companies.

• Scope of Reporting: Companies are required to report their environmental, social and governance (ESG) performance in detail. This includes calculating and reporting the carbon footprint.
• Disclosure Requirements: Companies must provide information on greenhouse gas emissions, energy consumption and other environmental impacts.

4. Taxonomy Regulation

This regulation, which came into force in 2020, defines sustainable activities and promotes green finance.

• Sustainability Criteria: Helps companies assess whether their activities comply with environmental sustainability criteria.
• Reporting and Transparency: Companies are expected to report on their compliance with green activities and clearly indicate the environmental impact of these activities.

Conclusion and Recommendations

Managing the corporate carbon footprint is not only a legal obligation but also a strategic advantage. Organizations need to set emission reduction targets and regularly calculate and report their carbon footprint. In addition, adopting sustainable business practices and minimizing environmental impacts will provide both environmental and economic benefits in the long run.

It is critical for companies to effectively manage their carbon footprint in order to both protect the environment and increase their competitiveness. Therefore, emission calculation and reporting processes should be meticulously carried out and continuously improved.

Calculating corporate carbon footprint is critical for companies to fulfill their environmental responsibilities, meet legal and regulatory obligations, provide financial advantages, gain competitive advantage, strengthen stakeholder relations and engage in strategic planning. This process enables companies to contribute to a sustainable future by providing both environmental and economic benefits.