Calculating Carbon Footprints Accurately
The carbon footprint of purchased products and services is a critical factor in carbon reporting and a vital component of a corporation’s carbon footprint reduction strategy. Understanding the footprint of purchased material on an actual basis, meaning by the supplier and purchased quantity, is a prerequisite to calculating an accurate, periodic carbon footprint of a corporation’s own manufactured products. But it does not stop there. The energy consumed by each production step as well as direct emissions resulting from manufacturing activities provide additional contributions to the carbon footprint, both, on an organizational level and also on a finished goods level. This applies whether we produce a tennis shoe, a chemical, or a car.
An accurate calculation and active reduction strategy of the carbon footprint does save cost, for example by avoiding Carbon Border Adjustment Mechanism (CBAM) payments, like the European carbon border tax.
The SAP Sustainable Footprint Management (SFM) tool allows companies to compute accurate, real-time value chain and finished product carbon footprint numbers from cradle to gate. It provides a scalable and accurate solution for this business requirement. How does this calculation work?
We used the generic example of strawberry fruitcake production. We created a set of videos to explain step by step, how the raw material as well as energy consumption footprints are getting calculated by using SFM. We do this for each production step and facility infrastructure component and finally determine the carbon footprint equivalent of the final product. This provides accurate, real-time, and monthly data, allowing companies to engage in active carbon reduction strategies, compare against targets, report actual and monthly numbers, save costs by reducing tax obligations, and ultimately gain market share.