What does “climate neutral” enterprise mean? - Key questions and answers

What do the first steps towards being a climate neutral enterprise look like – and what consequences can they have?

OMIRA had its CO2 emissions calculated by zukunftswerk eG, a co-operative for advisory consulting on issues pertaining to sustainable corporate development. On the basis of data from 2014, our company’s footprint amounts to 59,746 tonnes of CO2. During previous years we had already undertaken a large number of steps – particularly in the area of energy consumption – to reduce burdens on the climate. However, now that our carbon footprint has been determined we have a much better knowledge about where we have to start towards reducing our impacts on the climate even further. Due to activities already initiated and the conversion to green electricity we were able to quite rapidly diminish our footprint by more than 20 %.

In addition, we have compensated for our CO2 emissions with the help of UN climate certificates. As a result we shall be a climate neutral enterprise for the next few years.

What is a carbon footprint and how is it determined?

The carbon footprint is a measure of the quantity of greenhouse gases (measured in CO2 equivalents) which originate directly and indirectly due to an activity on the part of an individual, an enterprise, an organisation or a product. It incorporates emissions arising from raw materials, production, transport, trade & commerce, utilisation, recycling and disposal. Accordingly, the fundamental concept behind the term carbon footprint is to create a basis on which influences on the climate can be measured, given a value and compared. This, in turn, enables necessary reduction potentials to be identified, the drawing up of appropriate measures and an evaluation of their effectiveness. The goal is always to stop climate change due to greenhouse gases.

The corporate carbon footprint is carried out in compliance with the internationally recognised Greenhouse Gas (GHG) Protocol Corporate Standard.

Which greenhouse gases are included in the calculation and what are CO2 equivalents?

The six main greenhouse gases as established by the Intergovernmental Panel on Climate Change (IPCC) and the Kyoto Protocol, namely carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SH6), are included in the calculation of greenhouse gas emissions.

These six main greenhouse gases do not all have an identical impact. For example, methane is 23 times as harmful to the climate as CO2, nitrous oxide 310 times as harmful, and sulphur hexafluoride even 14,000 times as harmful. That’s why all greenhouse gases are converted to CO2 in order to compare the emissions with each other. These are then referred to as CO2 equivalents. The conversion of collected consumption data (for instance electricity or fuel consumption) occurs by means of emission factors which indicate the emissions per unit (e.g. per kilowatt-hour or litre of petrol).

What can we do to combat climate change?

Solutions to the problem of climate change are being demanded by citizens, companies, regions and cities, and they are being increasingly enacted. A binding agreement under international law, the Kyoto Protocol, was created for this purpose as far back as 1997. It regulates the greenhouse gas emissions from a number of emission-intensive industries in industrialised countries.

There are several possibilities to curb climate change. The key measures are:

  1. Prevention of greenhouse gas emissions through maximum efficiency with regard to energy and materials, modification of consumption habits, procurement of regional goods and regional value chains;
  2. Energy production from sustainable renewable energy sources (wind, water, solar) instead of fossil fuels;
  3. Reduction of greenhouse gases in the atmosphere via so-called carbon sinks. In this case CO2 from the air is captured and stored, for instance in the form of biomass or in soils.

Why do emissions certificates make sense?

The greenhouse effect is a global phenomenon because greenhouse gases in the atmosphere are distributed to a roughly identical degree. In terms of the whole world, that’s why it it is of no importance where in the world greenhouse gases are being saved or where they are being stored. And that’s why it was established in the Kyoto Protocol, a binding agreement under international law, that so-called climate protection projects which prevent or store greenhouse gas emissions can be undertaken where they are economically most efficient. Which is the reason why many projects take place in newly industrialising or developing countries: the potential for savings via new technologies is still quite large there. The initiators of the climate protection projects – which are predominantly renewable energy projects – receive emissions credits for their involvement which can be traded in the form of emissions certificates. What’s more, emissions trading contributes significantly towards the transfer of clean technologies to newly industrialising or developing countries, as well as to a sustainable (economical, ecological and social) development of the region.

What kinds of advantages does an enterprise gain from climate neutrality?

  1. Climate neutrality makes a contribution towards the objectives set by the government, the European Union and the United Nations.
  2. It sensitises staff, suppliers and customers with respect to how they deal with finite resources. This has a positive influence on how energy and other resources are dealt with, both within the enterprise and in people’s everyday lives.
  3. It currently makes a pioneering role in the market possible.

What happens to the data and the findings?

Our greenhouse gas balance-sheet provides a transparent overview regarding greenhouse gas emissions output during production at OMIRA GmbH. The report consequently forms a key building block within the company’s commitment to climate protection. On the basis of those the figures determined, the company can be declared climate neutral for several years by purchasing a corresponding quantity of UN climate certificates.

What kinds of projects are supported via the emissions rights purchased by OMIRA GmbH?

OMIRA GmbH has purchased emissions rights pertaining to various hydropower projects in Bolivia, Brazil, Chile, Guatemala, Peru, the Philippines and Vietnam. Emissions rights pertaining to wind power projects in China, India and South Korea were acquired in addition.

The hydropower projects account for a net power output between 14 MW and 300 MW. The projects go hand-in-hand with a number of social, ecological and socioeconomic benefits. The most significant being the substitution of fossil fuel sources through the use of renewable energy sources. Above and beyond this, the energy generated will be fed into the national grid. This contributes substantially towards power supply stability because considerable transmission losses arise due to the long distances involved. These distances have to be bridged.

The wind power projects have a net power output ranging between 28 MW and 100 MW. Alongside numerous ecological, social and socioeconomic advantages, however, here too the most significant benefit is the substitution of fossil fuel sources (primarily coal-fired power stations) through the use of renewable energy sources. Technology transfer is yet another priority that is supposed to contribute towards a further expansion of renewable energies. And what’s more, the turbines installed are going to be mainly manufactured on-site, a factor that creates jobs on a local scale.

What happens to the CO2 certificates after they have been sold?

Zukunftswerk eG, the aforementioned consultancy, recognised the CO2 emissions that originated due to OMIRA GmbH on the balance-sheet and retired a corresponding number of CO2 certificates held in an account with the EU. The reason this bears a significance is because retiring acquired CO2 certificates is a prerequisite for the designing and marketing of carbon-neutral enterprises or products. If not retired, a CO2 certificate might possibly be traded further on the voluntary market, meaning that no additional reduction of emissions would be achieved.

Doesn’t all of this simply boil down to ‘greenwashing’?

No. The term ‘greenwashing’ means that it is being suggested to consumers within the scope of a company’s public relations work that an ecological philosophy is being taken into account here that is supported and perceived in the course of daily work. What often lies concealed behind the ‘green philosophy’ is purely an advertising claim, albeit one the companies don’t really feel committed to.

In contrast, we at OMIRA perform our daily work in accordance with a variety of environmental and social standards. We are regularly audited for compliance with them and are subject to mandatory reporting. In addition to climate neutrality, these standards include our ISO and Sedex certifications, for example, as well as all social guidelines for our customers, suppliers and staff. A detailed overview regarding our activities towards sustainability can also be found in our Sustainability Report.