More sustainable production through active, digital CO2 control

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To calculate the individual CO2 budget, measurements are ideally taken in the same unit as the target unit of measurement, as in the XDC model: in degrees Celsius. © MHP

2040 or 2050? These figures are currently the subject of much debate when it comes to when Germany wants to be climate-neutral. While politicians are still divided, researchers are certain: the sooner, the better. They estimate that the next five years are crucial to actually achieving a significant reduction in emissions. This is because the remaining_{CO2 budget} is already extremely limited today.

The calculation should also take into account the particularly intensive Scope 3 emissions - this is where many of the emission hotspots are located. A roadmap of reduction potentials and targets is then recommended. © MHP

In practice, this means that instead of blanket offsetting or end-of-pipe technologies, a targeted approach can be taken where the highest "CO₂ return" is achieved - i.e. where the most emissions are reduced per euro invested.

Digital measurements in degrees Celsius

The interplay of budget thinking and emissions intensity analysis creates a new quality of decarbonization management. Companies can not only measure emissions - but also actively prioritize where and when investments have the greatest impact. An example: a plant causes ten percent of emissions, but 30 percent of turnover - and its intensity is drastically reduced by electrification. The priority is high. Another area has high emissions, but very low added value and hardly any reduction potential. Long-term transformations with an offsetting strategy make more sense here. This combination allows the economic optimization of the climate strategy - a prerequisite for well-founded investment decisions.

However, this level of control can hardly be achieved without digital support. In addition, the current standard, the SBTi methodology, is not sufficient to meet the requirements of the CSRD for various reasons. The biggest problem lies in the evaluation of particularly intensive Scope 3 emissions; the SBTi evaluates the Scope 3 targets, but does not classify them.

There are already SBTi supplements on the market that calculate_{CO2 budgets} for companies, buildings and portfolios and enable active CO2 management. Intuitive and reliable tools such as the XDC model take into account three factors - full scope emissions, EBITDA figures and personnel costs - and measure in the same unit as the target unit of measurement: in degrees Celsius. This answers the question of how many degrees Celsius the climate would warm up by if the entire world had the same climate performance as the organization under consideration. This makes the derivation and subsequent implementation of sector-specific decarbonization strategies in existing processes as simple as possible and facilitates compliance. The company receives an individual_{CO2 budget} based on its previous performance and can thus implement flexible measures along the 1.5-degree pathway. For example, it can set an internal_{CO2 price}, which in turn can be used to quantify emission risks.

Creating a central database

In summary, the corporate carbon footprint is the basis for strategic climate management. To remain competitive and profitable, companies need to understand their emissions, identify risks and develop effective strategies. Modern carbon management platforms make CO₂ budgets, intensities and scenarios visible, comparable and actionable. This creates full transparency across all emission sources and thus control. With digital carbon management, companies can automatically record scope 1, 2 and 3 emissions, monitor them in real time and carry out forecasts, simulate reduction measures in terms of budget and costs, integrate data from supply chains and fulfill reporting obligations from frameworks such as the CSRD. Artificial intelligence can be used as an enabler for better decisions, higher quality and greater efficiency. When choosing a platform, it is advisable to select an all-in-one solution in accordance with the GHG Protocol as a central database in the cloud. It then covers not only carbon management, but also other relevant tools for sustainable corporate management, compliance, transparency and efficiency.

By Alexander Appel, Manager Sustainability Transformation, MHP