Carbon reporting is a requirement for many businesses. Find out what the rules mean for your company, who needs to comply, and how to build an effective action plan to shrink your carbon footprint.
For several years now, environmental regulations have been tightening, pushing companies to measure and reduce their environmental footprint. Among these requirements, the carbon audit is becoming mandatory for many organizations.
But what exactly is a mandatory carbon audit? Who does it apply to? What are the stakes and the steps involved? Let’s break it down.
What is a mandatory carbon audit?
A carbon audit is a tool for measuring a company's greenhouse gas (GHG) emissions over a given period. It helps identify the main sources of emissions and implement an appropriate reduction strategy. This assessment is essential for anticipating regulatory changes and improving an organization's environmental performance.
As part of a mandatory carbon audit, your company's Scope 1, 2, and 3 emissions are taken into account:
The different scopes of a carbon audit
Scope 1: Includes all direct emissions generated by company activities, such as fuel combustion for fleet vehicles or industrial processes.
Scope 2: Covers indirect emissions related to energy consumption, specifically electricity, heating, or cooling purchased by the company.
Scope 3: Other indirect emissions (e.g., raw material purchases, supplier transport, use of sold products).
Scope 3 often accounts for the majority of a company's emissions, especially in sectors with extensive supply chains.
This regulatory framework allows companies to quantify their environmental impact and initiate reduction efforts.
Which companies are required to perform a mandatory carbon audit?
A carbon audit is mandatory for:
Companies with over 500 employees (250 in overseas territories): They must conduct a GHG emissions audit every 4 years.
Local authorities with over 50,000 inhabitants: They are required to conduct one every 3 years.
Companies subject to the CSRD directive: This European directive expands non-financial reporting obligations and includes the assessment of carbon emissions.
Large companies and certain regulated sectors: As part of their CSR strategy and to meet the requirements of investors or clients.
Why has the carbon audit become essential for businesses?
Compliance with legal obligations: If you are subject to a mandatory carbon audit, completing it helps you avoid penalties and ensures your company meets regulatory requirements.
Competitiveness and brand image: Conducting a carbon audit allows you to demonstrate your environmental commitment and gain a competitive edge in the market.
Optimizing and anticipating costs: A carbon audit helps you identify your main sources of GHG emissions; by optimizing these, you reduce consumption and, consequently, your costs. Furthermore, reducing your company's dependence on fossil fuels limits the risks associated with rising carbon prices.
Access to funding: Many investors and banks now incorporate environmental criteria into their decision-making.
Winning tenders and staying competitive: Many large companies are subject to increasingly strict environmental regulations that also apply to their value chain. They must prove that they work with responsible suppliers.
How can your company conduct a mandatory carbon audit?
A carbon audit follows several steps:
Defining the scope: Identifying direct emission sources (e.g., energy consumption) and indirect ones (e.g., supplier transport, product usage).
Data collection: Gathering information on energy consumption, travel, raw materials used, etc.
Calculating emissions: Using emission factors to quantify the company's carbon footprint.
Analyzing results: Identifying the main emission hotspots and levers for action.
Implementing an action plan: Defining a reduction strategy with clear goals and concrete measures.
Communication and monitoring: Showcasing the efforts made and tracking the progress of implemented actions.
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Getting support for an effective carbon audit
Conducting a carbon audit can seem complex, especially if you haven't yet structured your CSR approach or lack the internal resources to carry it out. Hiring a specialized consulting firm saves time, ensures regulatory compliance, and provides recommendations tailored to your company's specific needs.
Altopi supports your company with its Mandatory Carbon Audit:
Our online carbon assessment tool makes it easy to accurately calculate your company's greenhouse gas emissions. We’ll guide you through data collection, entry, and the development of an action plan to lower your carbon footprint.
With the green transition picking up speed and stakeholders expecting more, carbon accounting has become a key strategic tool. Beyond just meeting regulations, it’s a real opportunity for businesses to get a handle on their impact, cut costs, and step up their commitment to a more sustainable future.
