Ecological vs. Carbon Footprint for Businesses: What's the Difference?

|  August 26, 2024

🕓 Reading time 7 minutes

Table of contents

1. What is the ecological footprint?
2. What is the carbon footprint?
3. Why is the ecological footprint not directly queried in regulatory requirements?

What is the ecological footprint?

Ecological footprint at a glance

The ecological footprint of a company measures the totality of natural resources it needs for its business activities and relates this to the Earth's biocapacity.

Considered aspects and unity

It covers a wide range of environmental aspects such as

• land use,
• water consumption,
• energy consumption,
• Waste production and
• CO₂ emissions.

This key figure is expressed in the unit global hectare (gha) and represents how much biologically productive land is needed to supply the resources the company consumes and to absorb the waste, including CO₂ emissions.

What is the CO₂ footprint?

CO₂ footprint at a glance

The CO₂ footprint of a company is a measure of the Total greenhouse gas emissions, which are caused directly or indirectly by the business activities of this company.

Scope of the company activities considered

In order to systematically record and transparently present greenhouse gas emissions, the CO₂ footprint of a company (Corporate Carbon Footprint) in three so-called scopes which cover different sources of emissions:

Scope 1 includes all direct emissions from sources within the company. This includes all emissions released by the combustion of fossil fuels in company-owned or controlled facilities and vehicles.

Scope 2 Scope 2 emissions include indirect emissions resulting from the consumption of purchased energy. This particularly applies to electricity, steam, heat, and cooling that the company purchases from external suppliers. Scope 2 emissions do not arise directly within the company, but rather from the generation of purchased energy.

Scope 3 includes 15 categories all other indirect emissions that arise along a company's value chain. Scope 3 is usually the most extensive and complex scope because it includes numerous activities that are outside the direct control of the company.

Greenhouse gases considered and unit

The CO₂ footprint includes not only emissions of carbon dioxide (CO₂), but also other relevant greenhouse gases such as methane (CH₄), nitrous oxide (N₂O) and fluorinated gases.

These are integrated into the unit CO₂ equivalents (CO₂e) This conversion is done to account for the different impacts of the gases on the greenhouse effect and to make them comparable.

The CO₂ footprint is a key indicator in Climate protectionbecause it quantifies a company's contribution to climate change and enables the development of targeted reduction measures.

Why is the ecological footprint not directly queried in regulatory requirements?

The CO₂ footprint, also known as greenhouse gas balance, is firmly established in many regulatory frameworks, such as the Corporate Sustainability Reporting Directive, anchored.

Although the ecological footprint is an even more comprehensive concept, it is not used as a single metric for CSRD, ESG scores, or similar. Instead, individual environmental aspects are considered separately. For example, the ESRS Standards Companies report separately on various environmental aspects that are part of their ecological footprint. Areas such as water consumption, land use, and biodiversity must be included if they are material to the company. There are several reasons for this separate treatment:

Complexity of the ecological footprint

The ecological footprint is an integrative metric that summarizes various environmental impacts. However, regulators need detailed, specific data to develop targeted measures. Considering individual aspects such as land use, water consumption, and CO₂ emissions separately enables more precise analysis and policy development.

Specific requirements for different environmental aspects

Different environmental aspects require specific regulations. For example, the CO₂ footprint are directly regulated by climate protection laws and regulations, while the protection of water resources or biodiversity requires different regulatory approaches. By separately addressing these aspects, targeted measures can be taken.

Standardization and comparability

Individual environmental aspects such as greenhouse gas emissions, water consumption or waste production are easier to standardise and compare between companies and sectors. Regulatory frameworks such as the European Sustainability Reporting Standards (ESRS). rely on this standardization to obtain consistent and comparable data.

Regulatory priorities

The political agenda often focuses on specific environmental problems that are considered particularly urgent. Climate change is at the forefront here, which is why the CO₂ footprint is particularly prominently incorporated into the regulation. Other aspects such as land use and resource consumption are addressed separately to achieve specific environmental objectives.