Article written by carbonaddedaccounting.nl, original language Dutch.
Now that the CSRD (Corporate Sustainability Reporting Directive) already requires companies to include their CO2 emissions in their 2024 annual report, smaller collaborating partners are also being confronted with the question: what is my share in the footprint made by the chain as a whole? And how do I prove that? “It has now become clear to us what kind of emissions information we are required to publish,” explains Guido de Wit, Programme Manager at Topsector Logistics, “but how to calculate these figures is something everyone is still struggling with.” Carbon Added Accounting offers a solution. “With this method, you can easily demonstrate what your share of the CO2 emissions of a product or service is while ensuring that you are in compliance with all the laws and regulations. And, you improve your competitive position at the same time.”
Many interested companies
European sustainability legislation is crystal clear: The CSRD, CBAM and the expansion of ETS to include road transport… “The pressure to provide reporting with real data is increasing,” says Guido, “certainly now that CO2 emissions are taxed in the short-term. After all, you don’t want to pay for someone else’s emissions. This means that companies required to follow the CSRD will need to request Scope 3 footprint information from their suppliers. And they, in turn, will request the same from their suppliers. This sets the entire sector in motion.”
Establishing CO2 emissions
Guido: “Even though the details of the CSRD are still being decided, it is now for 95% clear what companies are required to report in terms of their CO2 emissions. However, we are all currently racking our brains on how you prove this information and share it in the chain without running up enormous administrative costs. The manner of proof remains tricky, certainly in more complex, international supply chains.” That is precisely why Topsector developed Logistical Carbon Added Accounting: a practical method for CO2 bookkeeping that can be applied throughout the entire production chain. “You can roughly compare it to the VAT you charge for your portion of the work. You calculate and settle your share of the CO2 emissions. Thanks to this pioneering system, you give an indication of the quality of your own data as well as that of the predecessors in the chain, and it will become clear how reliable and accurate the total footprint of a product or service is across the entire chain.”
Data that meets the accountants’ requirements
“This reliability is crucial for meeting the accountants’ requirements. They must verify and approve the emissions figures before these can be included in the annual report. In doing so, they will not only look at the end results, but also at the manner of proof. Is the information complete? Accurate? Up to date?”
Carbon Added Accounting makes it easy to provide substantiated CO2 emissions data. This is important not only for companies and accountants, but also for governments and consumers: it enables them to compare companies, products and services. It is also a perfect way for companies to stand out and take the lead in working towards a sustainable future.
Clear, demonstrable data bolsters your competitive position
Now that more and more CO2 emissions data must be measured and shared, it has become increasingly important to be able to substantiate your sustainability with numbers. This also applies to companies that have been practicing sustainable entrepreneurship for years. Guido: “Today, everyone is required to report on sustainability – companies are tasked with assigning CO2 emissions numbers to their products and services in order to raise their profile. You must demonstrate your sustainability with real data, also in comparison to other companies. This data also reveals great insights. Insight into which links in the chain produce the highest emissions, for example. Insight into the overall efficiency. The difference in emissions between production lines at new and older locations will now be made eminently clear in the footprint per product. This will enable companies to take targeted action to retain and bolster their competitive position when it comes to sustainability. Simply put, Carbon Added Accounting gives you a concrete tool to work with.”
Calculating the emissions of an egg or a tulip
“What we at Topsector find especially important, is providing a smart, efficient solution that works very simply,” says Guido. “I am committed to that. Because the easier it is to work with, the sooner companies will start to utilise it and ensure that all parties can take targeted action.
That the chain-wide application of Carbon Added Accounting actually works, has been demonstrated by a number of practical test cases Topsector Logistics carried out with companies. By detailing the emissions of each separate link in the chain – agrarian/extraction, production, logistics and commerce – the emissions of tulips, beer, paint, eggs and packaging have already been calculated. “Carbon Added Accounting is a standard practice that works well for both large and small companies. This system is also ideal for the responsible managers at companies because it is based on cost accounting. For anyone with financial background, it is a familiar and highly accepted method to work with.
These companies have already discovered it
Joost Wesselman, the owner and Managing Director of Wesselman Flowers, asked Topsector to calculate the emissions for growing tulips. “With Carbon Added Accounting, you can calculate the footprint per product across the entire chain and gain insight into our complete business process. Based on these numbers, we can take specific action to ensure further sustainability. It also immediately ensures compliance with all the new European laws and regulations in force. Just on the basis of already having these figures on file at your company.”
With Carbon Added Accounting, Udea gained insight into the total CO2 emissions of their organic and bio-dynamic egg chains, ranging from the feed to the shop shelves. Steven IJzerman, Quality Manager at Udea, had this to say: “The most important insight we learned is that if the farmer works responsibly, he will have a positive impact on emissions. I am very pleased about that, because it shows how valuable organic and bio-dynamic agriculture is. We want to enter into discussion with other parties about these demonstrated insights so that, together, we can be even more sustainable.
How do you feel about applying the Carbon Added Accounting method in practice? “Collecting all the data can be difficult, but once you have it, you can easily enter it into the system. It then becomes immediately, visually clear how emissions are distributed across the chain: across the agrarian, transport, warehousing and retail sectors. The system can also be repeated quite easily. You can conveniently add another egg supplier of replace a supermarket and you will quickly have an accurate idea of the consequences of such changes.
Achieving real change
“I am so pleased with all the companies that have decided to work with us on Carbon Added Accounting projects,” says Guido enthusiastically. “They are so driven! They inspire me and provide real proof that it is actually possible: you can calculate and substantiate the emissions of one egg, or one glass of beer. I am proud to able to collaborate with such pioneers. Together, we have proven that you can determine your emissions levels so that you can take effective action to curb these where necessary. This ensures you will work more efficiently and more competitively. By establishing these figures, we can convince others to also start working on substantiating their emissions per sector. Once we’ve done that, we will be able to achieve real change.”
Like to calculate/report your emissions and further improve your competitive advantage?
With Carbon Added Accounting and other methods, Topsector Logistics partners with companies, governments and research institutions to work towards competitive and emissions-free logistics in the Netherlands. On www.carbonaddedaccounting.org, you can find more information and read about the experience companies had with the system and the directives that apply to your sector so that your company can take targeted action to prepare for the future. Together, we can move faster and go further.
If you have any questions about Carbon Added Accounting, please feel free to contact us.
| Guido de Wit, Program Manager Topsector Logistics.