Insight
How to make your company CO2-neutral

Here is a simplified guide that provides an initial overview of companies’ paths towards CO2 neutrality.
Insight
Here is a simplified guide that provides an initial overview of companies’ paths towards CO2 neutrality.
There are many benefits of reducing your company’s emissions. For instance, CO2 reductions can minimise your firm’s energy expenses, as well as contribute to national and global climate goals. In this article we illustrate what the road to a CO2-neutral company looks like.
The purpose is to give a simple description of a process that is anything but simple. Let’s be honest – it is not a quick-fix to become CO2 -neutral. It requires prudent planning, strategic investments, responsibility and persistent effort. Still, most companies can achieve CO2 -neutrality – broadly outlined in three important steps:
The first step towards CO2-neutrality is to understand your company’s carbon footprint. This gives an important overview and foundation for making decisions. Greenhouse gas emissions from companies are generally divided into three scopes:
Creating an overview of your company’s CO2 emissions through this structure provides an insight into your firm’s weaknesses and strengths in terms of a carbon footprint. It also allows you to identify simple fixes. This ensures your ability to focus your business and initiate climate-supportive efforts in the most efficient way.
Having completed your climate account, you can start reducing your firm’s emissions. Reducing emissions on all possible fronts is key to achieving CO2 neutrality, and it is a prerequisite for justifying compensation for the remaining emissions. There are naturally a lot of different aspects to consider. Some initiatives are ‘cheap’ CO2 reductions, and other reductions are considerably more expensive to achieve. The following examples of green initiatives can guide the reduction of your company’s emissions:
1) Energy optimisation of company facilities
2) Optimisation of production plants
3) Producing your own sustainable energy – e.g. solar panels to make electricity
4) A green procurement strategy
5) Requiring sustainable transportation from suppliers
Before you start making green investments, it is critical that you become familiar with your firm’s CO2 levers. All companies are unique and initiatives that yield cost-efficient reductions for one company, might be less attractive for another. By adhering to this throughout the process, your company can create a goal-oriented and long-term reduction strategy; and commence effective initiatives.
You are now well on your way in your company’s green development pathway. You know where and which efforts are needed the most, and with the climate account at hand, you now have a long-term strategy for your company’s CO2 reductions. Initiative by initiative your company becomes greener and greener.
But the end goal for many companies is CO2 neutrality. This is where many companies face large challenges. At some point, all of the easy initiatives, often within scope 1 and scope 2, have been implemented. The green investments are slowly becoming more intensive and more expensive – and maybe even also less efficient, when measured relative to the size of the CO2 reduction. In many cases, you won’t be able to make further reductions without impacting the company’s ability to operate.
For Danish companies, this can e.g. be with respect to a dependency on supplied district heating or natural gas for heating. This typically ends with a deficiency of the last 7-15% CO2-emissions, when you look at scope 1 and 2.
In the case stated above, CO2 compensation can be a good solution to achieve CO2 neutrality. CO2 compensation – also known as CO2 offsetting – is about finding CO2 reductions or -sequestrations outside your own company. In practice, CO2 compensation means investing in projects that benefit the climate. This could e.g. be through:
Many CO2 compensation projects have so far taken place internationally. One of the reasons for this is that investments in developing countries can frequently bring larger reductions at a cheaper price and contribute to social-, environmental-, climate-, and economic sustainable development.
'Isn’t it just polluting companies trying to buy their way out of their sins?' The short answer is 'no'.
However, at NIRAS we see an increasing focus from Danish companies on national projects that are both CO2-efficient and benefit the Danish population by, for example, contributing to a richer nature and environment. These types of projects can also support national climate goals, as voluntary projects within the national borders contribute to the Danish, national climate accounts as defined by the UN as part of the Paris Agreement.
Now and then we hear people criticize CO2-compensation: “Isn’t it just polluting companies trying to buy their way out of their sins?” The short answer is no. Most often that is not at all the case. When companies invest millions in CO2 compensation, it is most likely companies that have already been through a considerable green transformation journey, but need the last 7-15% within scope 1 and 2 to reach their ambitious climate goals. With that said, it is important to consider that the investments made by companies are creating legitimate reductions, that CO2 compensation is never just a quick-fix, and that the companies begin with reductions within their own scopes.
When you have come to the conclusion that you want to CO2-compensate the last tough – and typically expensive – emissions, it is important to be aware that it is a complicated and often long process. Additionally, there is a list of focus areas that your company needs to keep an eye out for:
If you keep all of these steps in mind, beginning the process of reducing your company’s carbon footprint, will be straightforward. Remember, however, that the most important CO2-reductions are those made in your own company. CO2-compensation is a supplement to this, to ensure that your company reaches its green climate goal – either as a CO2-neutral or maybe even a climate positive company!
NIRAS is the leading consultant within CO2-accounting. Every year we help companies, municipalities, regions, and other entities with their climate accounts. We have, for instance, advised Copenhagen Airport and COOP Denmark on climate compensation and CO2-offsetting. In addition, we have developed a CO2 calculator for the Danish Business Authority.
Christian Eriksen
Expertise Director
Allerød, Denmark
Christian Eriksen is Expertise Director for climate and sustainable development at NIRAS. As an engineer and M.Sc., Christian has worked with projects within climate and sustainable development for more than a decade – both nationally and internationally. In recent years, Christian has advised a long list of companies and organisations, while also managing projects in e.g. Nigeria, Thailand, and Kenya, on how CO2-emissions and the appertaining climate impacts can be reduced.
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