Total carbon intensity

  • Radia Guira

(‘CO2 Emissions – Total Scope 1’+’CO2 Emissions – Total Scope 2’+’CO2 Emissions – Total Scope 3’)*1000)/(‘Total revenue covered by environmental reporting’*1000)
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« Total carbon intensity » refers to the overall volume of carbon emissions produced by a business in relation to its operational capacity or output. The purpose of this question is to determine the extent to which the company’s operations are directly contributing towards greenhouse gas emissions.

1. « What is the total carbon intensity of your firm? » This question is asking the responding company to provide a numerical figure representing the amount of carbon emissions they produce per unit of their output. (Example: Our company’s total carbon intensity is 10 tonnes CO2-equivalent per million dollars of revenue)

2. « How do you measure your overall carbon intensity? » This question wants to know the methodology the company employs in calculating their carbon intensity. This can include any specific metrics, principles or standards they follow. (Example: We calculate our total carbon intensity using a Scope 1, Scope 2 and Scope 3 Greenhouse Gas Protocol, standardizing emissions with our total revenue.)

3. « What steps are you taking to reduce your overall carbon intensity? » This question aims to identify what methods or strategies the company is using in order to decrease its carbon emissions. This could involve energy efficiency measures, use of renewable energy, or carbon offsetting strategies. (Example: We are implementing energy-efficiency improvements in our production processes and shifting towards using more renewable energy sources.)

4. « How often do you assess your carbon intensity? » The frequency of assessing their carbon intensity will demonstrate a company’s commitment to monitoring and reducing their carbon emissions. (Example: We measure our carbon intensity on a quarterly basis.)

5. « Do you have a set target for reducing your total carbon intensity? » A company that has a specific target to reduce their carbon intensity demonstrates dedication to sustainability and reducing their impact on climate change. (Example: Our target is to reduce our total carbon intensity by 30% by the year 2030.)

Understanding Total Carbon Intensity and Its Importance

In the current global context, the environmental impact of our activities is under increasing scrutiny. One of the key metrics used to gauge this impact is Total Carbon Intensity (TCI). TCI measures the amount of carbon dioxide emissions per unit of output or activity. This metric is significant as it helps businesses and organizations quantify their environmental footprint, set targets, and track improvements over time.

For companies committed to ESG (Environmental, Social, and Governance) criteria, understanding and reducing TCI is not just a matter of compliance or good public relations; it’s a strategic imperative. Climate change, driven by carbon emissions, poses a substantial risk to long-term business sustainability. Moreover, investors, customers, and regulators increasingly demand transparency and action on climate issues. As a result, a clear understanding of TCI is essential for businesses looking to future-proof their operations.

TCI is particularly relevant in the energy sector, where the measurement of carbon intensity of energy products is a critical factor in assessing the environmental impact. In essence, TCI provides a snapshot of how ‘clean’ or ‘dirty’ an energy product is, in terms of carbon emissions. TotalEnergies provides an insightful look into how energy companies are measuring and reporting on carbon intensity.

Calculating Carbon Intensity: The Methodology Explained

Calculating Total Carbon Intensity involves a straightforward yet detailed process. To begin with, the total emissions of greenhouse gases, primarily carbon dioxide (CO2), are quantified. These emissions are then divided by a measure of output, like megawatt-hours (MWh) of electricity generated or tons of product produced. By standardizing emissions in relation to output, TCI facilitates comparisons across different companies, sectors, and time periods.

The International Energy Agency (IEA) provides comprehensive data on CO2 emissions and the energy sector’s performance. Their annual reports serve as a benchmark for understanding global trends and the effectiveness of measures taken to reduce emissions. Access the latest data and insights on these trends from the IEA’s report on CO2 emissions in 2022.

For the electricity sector, for instance, TCI is calculated by dividing the total emissions from electricity generation by the total electricity produced. This calculation can reveal the carbon intensity of a nation’s electricity supply and is crucial for tracking progress toward greener electricity generation. For more in-depth information, Our World in Data offers an interactive chart showing the carbon intensity of electricity for various countries over time.

Reducing Your Carbon Intensity: Steps Towards a Lower ESG Score

For businesses and organizations looking to improve their ESG scores, reducing carbon intensity is a practical step. This endeavor involves a multipronged approach: transitioning to low-carbon energy sources, improving energy efficiency, and innovating in carbon capture and storage technologies. Each of these strategies plays a critical role in reducing overall TCI, and hence improving a company’s ESG performance.

Transitioning to low-carbon energy sources is perhaps the most impactful step in reducing TCI. This can include shifting from coal or oil to natural gas, increasing the use of renewables like solar or wind, or investing in nuclear energy. Each of these energy sources has a different carbon intensity, with renewables offering the lowest TCI and thus the greatest potential for reduction.

Improving energy efficiency is another key strategy. By using energy more effectively, companies can achieve the same level of output with lower emissions. This can involve upgrading equipment, optimizing processes, or adopting new technologies that use less energy. Not only does this reduce carbon intensity, but it also often results in cost savings.

Lastly, innovation in carbon capture and storage (CCS) technologies can provide a pathway to significant reductions in carbon intensity. CCS involves capturing CO2 emissions at their source and storing them underground or using them in other processes. While still an emerging field, CCS has the potential to enable high-emission industries to drastically reduce their TCI.

In conclusion, understanding and decreasing Total Carbon Intensity is critical for aligning with ESG criteria and mitigating climate change. By accurately calculating and taking steps to reduce TCI, companies can demonstrate their commitment to sustainability, satisfy stakeholder demands, and ensure their long-term viability in a low-carbon future.