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February 21, 2022

Climatiq’s GHG Report: Starting out on our emission measurement journey

Climatiq’s GHG Report: Starting out on our emission measurement journey

Climatiq was founded in 2021 with a mission to drive climate action through data and insight. By October 2021, we’d recruited and onboarded our core team and launched into public beta, so it felt the time was right to begin formally reporting on our greenhouse gas (GHG) emissions. 

Rather than waiting a year and performing an annual report (often the standard in GHG accounting) we decided to do two things differently. Firstly, we would project what we thought we would be emitting based on reasonable assumptions. Secondly, we would track performance against this on an ongoing, monthly basis – in line with our vision and mission to drive climate action through emission-driven business intelligence.

As a first step, that meant we had to start tracking emissions, even before our own product was shipped. We decided to start with a basic, spread-sheet oriented approach, similar to common practice. This would afford us a very real baseline against which we could see how incorporating the toolset we are creating can improve granularity and accuracy of emissions measurement, as well as providing insights into key areas for reduction.

How do we account for our emissions?

Like any other company starting out on their emission measurement journey, we first had to decide exactly how to go about it. There’s the GHG Protocol but guidance for small and medium-sized enterprises (SMEs) is limited and mostly focused on “direct” emissions, such as office heating and cooling (scope 1 and 2). 

Climatiq, however, is a 100% remote software company, with a workforce spread over multiple countries. This means our direct emissions are negligible, whereas our indirect, value chain emissions (scope 3) amount to nearly all of our overall greenhouse gas emissions.

After researching the options, we decided to build our initial tracking mechanism on an adjusted spreadsheet provided by the UK BIMA Sustainability Council – not least because it includes tracking of emissions for a remote workforce, based on a white paper by EcoAct.

For the projected assessment and first quarter’s reporting, we included 4 categories of scope 3 emissions:

  • business travel, 
  • fuel and energy related activities (i.e. remote worker setups), 
  • purchased goods and services (incl. cloud infrastructure and software)
  • employee commuting. 

There are more than these, but for our business the above cover all of our activities. Perhaps not as granularly as we’d like, but this is interesting in itself as an insight into how the majority of businesses perform their footprinting and gives us a good indication on what problems they are facing.

On to the numbers: Climatiq’s projected and actual emissions 

Based on the above approach, Climatiq’s projected greenhouse gas (GHG) emissions for October 2021 until September 2022 are 24.8 tCO2e.

We’ll look at how that breaks down in a moment, but it’s worth dwelling on this headline number to make sense of it. For instance, our projected annual emissions can be translated into an average of 2.5 tons per person - roughly the same as what the UNFCC says we can afford per person across all aspects of their lives (not just professional) by 2030 to have a reasonable chance of keeping global heating under 1.5°C. It amounts to approximately 84,900 air miles travelled - and would require 373 trees to be grown from seed to maturity over 30 or more years to remove it from the atmosphere.

On to how we have performed so far. Our actual tracked emissions in October-December 2021 were 10.5 tCO2e, broken into scopes as follows:

  • Scope 1: 0 
  • Scope 2: 0.2 
  • Scope 3: 10.3

The emissions that we’ve tracked as a team so far are coming in higher than projected, having already in the first quarter of the accounting year used 42% of our anticipated emission budget (i.e. 10.5 tCO2e of 24.8 tCO2e).

This is largely due to scope 3 expenditure on goods and services. We emitted 7.5 of our total projected 11.9 tons for this category in the first accounting quarter (Q4 2021). Notably we reported significant legal and administrative fees associated with assembling an international workforce, exceeding the spend we had anticipated for the whole year in that category. In addition, since this first period covered cooler months for us, we also tracked a large proportion of our anticipated remote-working emissions: 0.68t of our 1.14t emission budget (60%). On a more positive note, we are somewhat under-budget on our travel emissions, having expended 2.35t or 22% of our 10.8t projection for the year.

Going forward: Ongoing tracking, actionable emission insights, pathway to zero

So what have we learned from the exercise of measuring emissions over our first three months of full operation?

Firstly, it is a truly valuable exercise to set a projection and understand how we are performing against it on a monthly basis by tracking our actual emissions. We are able to identify hotspots of emissions as they occur and while we may not always be able to mitigate them right away, they allow us to reflect as a team and adjust our approach. Importantly this highlighted just how much of an impact the legal and administrative aspects of being a remote, international team can have.

This also makes clear that there are plenty of areas for improvement in measurement. For instance, in the BIMA methodology there is very little granularity in the way expenditure is accounted for. A single “goods and services” emission factor is used for any and all spending, whether it is legal costs or office supplies purchased. In the next iteration of our accounting, we are going to see these numbers change as we get more granular (both in terms of category of spend and regionality). We will use this information to inform reduction measures and keep below the projected total.

While there are limited options to pursue a net-zero pathway for smaller enterprises – certainly when it comes to getting certified through the Science-Based Targets Initiative – we are certainly able to align with the approach of minimising our emissions wherever possible. Having already expended nearly 50% of our budget for the year, we have a lot of tough decisions to make in order to come in below our projected emissions. We will continue to share our findings and learnings, as well as improvements in how we are measuring and reducing our emissions - and how the toolset we are developing at Climatiq is enabling us to do so.