Environmental performance
In 2022, EcoOnline's greenhouse gas emissions amounted to approximately 5496 metric tonnes(5.496 million kg CO2 equivalent). However, it's worth noting that only 4% of these emissions come from Scope 1 and 2, which are emissions within our operations, while the majority of our emissions come from Scope 3, which includes purchased goods and services, employee commuting, and business travel.
At EcoOnline, we understand the growing expectations from customers, employees, and investors to assess and reduce our emissions footprint.
In our commitment to transparency and accountability, we have partnered with an external third-party to calculate our greenhouse gas (GHG) emissions across all local entities. The methodology used aligns with the principles and guidance of the Greenhouse Gas Protocol Initiative, which is a recognized standard for corporate GHG accounting and reporting.
The GHG Protocol defines three emission sources, known as "Scopes," which provide the framework for establishing operational boundaries.
Scopes – defining the three emission sources
Scope 1
MT CO2e
Direct Emissions includes emissions from combustible fuels and other sources that occur directly on our sites. This encompasses activities such as the burning of natural gas for heating and emissions from onsite or company-owned vehicles.
Scope 2
MT CO2e
Indirect Emissions covers emissions that occur off-site but are associated with the production of electricity or steam purchased for use at our corporate locations.
Scope 3
MT CO2e
Other Indirect Emissions accounts for emissions from activities downstream or upstream from our core business. This includes emissions from product use, waste disposal, commuting, business travel, and inbound and outbound logistics. Specific activities relevant to EcoOnline will be documented in detail.
Analysis – Process, Performance and Progress
Organizational Boundaries
EcoOnline determines its GHG inventory boundaries based on the financial control approach, which includes leased facilities and locations where direct operational control is exercised. This boundary aligns with our management of operations, enabling us to influence decisions impacting GHG emissions. Newly acquired facilities are also included within the boundary during our period of control. This approach ensures a comprehensive assessment of our GHG emissions for effective tracking and mitigation.
Recalculating baseline year
To better reflect the current state of EcoOnline and enhance emissions tracking, we have chosen to designate 2022 as our baseline year. The decision to make 2022 our baseline year is multifaceted. Firstly, the substantial changes in our operations, including the integration of new entities and modifications in our energy usage and business activities, made direct comparisons with 2021 emissions challenging. Secondly, it reflects our commitment to aligning with industry standards, particularly the GHG Protocol, which we began following in 2022.
Furthermore, establishing a post-Covid baseline allows for more consistent tracking, considering the pandemic's impact on emissions.
GHG Emissions Profile
This report primarily focuses on Scope 3 emissions, with a detailed analysis of the largest emission category - Purchased Goods and Services (PG&S). Understanding the emissions impact of these transactions is crucial for effective reduction strategies.
To summarize Scope 1 and 2 emissions, data was collected from 13 global facilities using various methods, including activity-based calculations for mobile combustion, consumption data analysis for stationary combustion, and location-based and market-based approaches for electricity consumption.
Analysis of EcoOnline's Scope 3 Emissions
In the following section, we will provide a more detailed analysis of our scope 3 emissions, focusing on the largest emission category. This analysis will help us gain deeper insights and works as useful sources to our decarbonization strategies outlined in our 2030 Sustainability Plan.
For reporting purposes, some categories, such as waste and water in operations, was determined to be immaterial to our GHG footprint and thereby excluded from our analysis.
To calculate the Scope 3 categories, a combination of actual and estimated data was used. Actual data was obtained from internal accounting systems and estimated data involved the use of relevant publicly available statistics and emission factors.
In our analysis we found that PG&S is our largest emissions category. Aligning with expectations for a Software-as-a-Service (SaaS) company like EcoOnline, a major portion of our PG&S spend is allocated to services. Going forward, understanding the emissions impact of these service-based transactions is crucial for implementing effective strategies to reduce our carbon footprint.
To calculate the emissions associated with this category, we utilized spend data obtained through accounting sources. The spend data was then mapped to US Environmental Protection Agency's (EPA) Environmentally Extended Input-Output (EEIO) categories, using transaction description, account name, and supplier information. This mapping allowed us to translate the spend amounts into emissions estimates for each category
The EEIO emission factor set is a comprehensive database produced by the US EPA. It provides emissions data for various industrial processes and activities. It enables us to estimate the greenhouse gas emissions associated with different economic sectors and identify the environmental impacts of producing goods and services. By leveraging the EEIO emission factor set, we can assess the carbon footprint of our purchases by considering the emissions from raw material extraction, manufacturing, transportation, and disposal.
In analyzing our emissions profile, the following key observations highlight the significance of our PG&S category:
- Data processing and hosting emerge as the largest emissions category within PG&S. This is primarily due to the substantial spend associated with this category and the energy-intensive nature of the process, resulting in a high emissions factor.
- Contractors, encompassing business support, software, and other support services, represent the second-largest emissions category within PG&S. This underscores the importance of addressing emissions associated with contracted services in our sustainability efforts.