Decarbonization and environmental protection

In a world that is constantly changing and in which the effects of climate change are becoming ever more apparent, companies are facing growing challenges. In order to counteract climate change, greenhouse gas emissions must be drastically reduced in the coming years and decades. As a result of this social responsibility, but also due to stricter legal requirements, it is crucial for companies to monitor and reduce their emissions and resource consumption.

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01

Distinction between the corporate and product level

An important part of this responsibility is measuring the CO2 equivalents produced (other greenhouse gases such as methane are converted into CO2 equivalents). A distinction is typically made between the calculation of emissions at the company level with the corporate carbon footprint and at the product level with the product carbon footprint. In addition, a life cycle analysis enables an even more detailed analysis at the product level by taking other environmental impacts into account alongside greenhouse gas emissions. However, these three approaches differ considerably in terms of collection, scope, and use.

Corporate Carbon Footprint

The corporate carbon footprint describes the sum of all CO2e emissions for which the company is directly and indirectly responsible.

Product Carbon Footprint

The product carbon footprint describes the balance of greenhouse gas emissions over the entire life cycle of a product.

Life Cycle Assessment

The life cycle assessment analyses the overall environmental impact of a product across all phases of its life cycle, considering not only greenhouse gas emissions but also other environmental aspects such as water consumption and land use.

Corporate Carbon Footprint

valantic's strategy for reducing CO2e emissions in companies

With our three-stage process, we ensure that companies meet the legal and social decarbonization requirements. By creating transparency, reducing emissions, and sustainably transforming the entire organization, we create the basis for your company’s “climate alignment.”

Transparency

The first stage involves creating transparency. To do this, the relevant emission categories for your company are determined. It is important to identify the areas and processes that, on one hand, contribute significantly to business success and, on the other hand, cause substantial CO2e emissions. This can range from production, fleet management, and energy supply to transportation and business travel. To quantify these emissions, we rely on existing data sources, such as internal data on energy consumption, waste volumes, and external data such as emission factors and transport miles from service providers. In cases of missing data, we assist you in measuring or estimating the emissions using alternative approaches.

Following the consolidation of this data, the total CO2e emissions are calculated; the resulting figures are also referred to as the climate balance or Corporate Carbon Footprint (CCF). Visualizing the climate balance in the form of charts, graphs, or interactive dashboards aids companies and stakeholders in better understanding the impacts of various corporate activities and in taking targeted measures for reduction in the next step. Since it is often the case that some of the data for the initial calculation of the climate balance is lacking, it is necessary to continuously optimize and calculate the data basis. A final external validation of the climate balance enhances credibility with stakeholders, as potential risks and weaknesses are identified, ensuring a comprehensible and comparable climate balance.

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Reduction

Following the assessment of the climate balance, the second stage involves the reduction of CO2e emissions. The transparency created allows for the identification of emission hotspots, which are the areas and processes where the most emissions are generated. Specific measures for emission reduction are then developed for these areas, such as switching to renewable energy sources, improving energy efficiency, and optimizing transport routes.

In evaluating these measures, their ecological and economic impacts are considered, as well as their feasibility within the company. Based on these evaluated measures, a reduction pathway with specific targets and a timeline are established. Continuous internal validation of this reduction path ensures that the set goals are met, and adjustments are made if necessary. We also offer support for external validation, for example, through the Science-Based Targets initiative, which checks whether the emission reductions meet the demands of the Paris Agreement to limit global warming to well below 1.5°C.

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Transformation

To successfully implement the reduction path and ensure continuous transparency, the final step of transformation requires the long-term integration of sustainability into the company’s strategy and culture. This initially involves the implementation of a governance structure in the form of organizational and structural adjustments to anchor the reduction goals in all areas and levels of the company.

Transparent reporting aids in the monitoring and communication of progress along the reduction path. The transformation is accompanied by change management, which involves informing employees about planned changes, addressing potential concerns, raising awareness of the importance of sustainability, and imparting the necessary knowledge. For a long-term, successful reduction of CO2e emissions within the company, emissions data collection should be increasingly automated.

By applying valantic’s strategy and utilizing external technologies and software solutions, the collection of emission data can be automated, optimized, and delivered in real time. In addition to monitoring, the data can be used to perform simulations and create forecasts, making it easier to compare different courses of action and their ecological and economic impacts. These results can then be used for operationalization by incorporating sustainability metrics into procurement processes and sales and operations planning (S&OP). Only by doing this can emissions be considered an essential factor in company decision-making alongside time, cost, and quality.

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Product Carbon Footprint (PCF)

In addition to transparency at the company level, a product’s impact on the environment can also be analyzed using the product carbon footprint. By creating a PCF, levers can be identified along the entire supply chain and appropriate measures to reduce the environmental impact can be realized.

  1. 1

    Defining the objective and scope

    The first step in creating a PCF is to define the objective and scope of the analysis. Here we determine which product is to be analyzed and which processes need to be included in the calculation. This includes a detailed examination of the product life cycles and the identification of all relevant process steps, from raw material extraction to disposal.

  2. 2

    Data collection

    The next step is to identify possible data sources and collect all the data required to calculate the PCF. We then establish a clear calculation logic and select the appropriate tools to enable precise data collection and processing. We make sure that the selected tools reflect the complexity of the processes and offer user-friendly handling.

  3. 3

    Impact assessment

    This is followed by an assessment of the environmental impact. Here, the data collected is used to quantify the emissions associated with each step of the product life cycle. The focus here is on analyzing the environmental impact and identifying the main drivers. This can form the basis for deriving and evaluating potential for improvement.

  4. 4

    Evaluation and interpretation: analyzing the results

    The final step involves analyzing and interpreting the results. The results obtained are evaluated in the context of the entire product portfolio, and in comparison to industry benchmarks. This phase also includes the development of recommendations for measures to reduce the PCF and integrate the findings into the corporate strategy and operational business.

Life Cycle Assessment

The life cycle assessment (LCA) is an extension of the product carbon footprint (PCF). It goes beyond the mere consideration of greenhouse gas emissions and considers a variety of other environmental impacts, such as water consumption, land use, and resource use. This extended analysis is of interest to companies in order to provide a more holistic view of their products and services. By carrying out an LCA, companies can not only improve their environmental impact, but also develop more efficient and sustainable production processes that can lead to resource efficiency and cost savings in the long term.

If a comprehensive data collection and analysis has already been carried out when calculating the PCF, it is relatively easy to add a life cycle assessment. The data basis for calculating CO2e emissions can also be used as a basis for other environmental impacts. Based on the results, companies can identify opportunities for improvement, optimize resource efficiency, reduce waste, and make informed decisions regarding product design and supply chain management. This allows your organization to effectively broaden and deepen its sustainability strategy.

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Your Contacts

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Marco Fuhr

Managing Consultant

valantic Supply Chain Excellence

  • Decarbonization
  • Social Supply Chain
  • Twin Transition
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Jan Laakmann

Chief Operating Officer

HÖVELER HOLZMANN – a valantic company

  • Sustainability strategy & roadmap
  • ESG reporting (CSRD)
  • Social supply chains (LkSG, EUDR, CBAM)
Dr. Jens Lehnen, mm1

Dr. Jens Lehnen

Principal

mm1 – a valantic company

  • Sustainability strategy & roadmap
  • Circular Economy
  • Green IT
Sebastian Badaghlou

Sebastian Badaghlou

Partner

valantic Digital Finance

  • Digital Finance
  • Financial Steering
  • Corporate Perfomance Management
  • Financial Consolidation