2.1. The MC3 Foundations
The calculation method used, MC3, has been developed by Doménech [9
]. Doménech starts from the need to make a method that enables the estimation of companies’ and organisations’ CEF, offering the possibility of expressing this footprint both in land units and in t CO2
, so that CCFP can be calculated.
The origin of MC3 can be found in the concept of household footprint [25
]. In this way, based on the matrix of consumptions versus land present in the spreadsheet for the calculation of households’ footprint by Wackernagel [25
], Doménech [9
] prepares a similar matrix, which contains the consumptions of the main categories of products needed by a company, and also includes sections for the wastes generated and the use of land. These consumptions/wastes will be transformed into land units and t CO2
MC3 was first applied to the Gijón Port Authority [9
]. Later on, it was tested and improved by the Working Group on Corporate Ecological Footprint Enhancement, coordinated by Doménech himself, in which five Spanish universities took part. For a year and a half, this method has been applied to firms belonging to different economic sectors [26
]. This application period proved this method is robust and useful in providing information relevant to improve companies’ and organisations’ environmental performance in any economic sector.
The CCFP obtained with the current MC3 version includes direct and indirect CO2
emissions, the latter being considered as those generated in the production/provision of goods and services obtained. A second version of this method is currently under development, which will incorporate emissions from the rest of the greenhouse gases included in the Kyoto Protocol, by using the GWP coefficients with a time horizon of 100 years prepared in [32
]. These coefficients relate each gas-warming potential with CO2
-warming potential, which makes the needed conversion possible. For example, a factor 23 means that the contribution by gas unit is 23 times higher than that from CO2
Hence, this indicator will be expressed in CO2 equivalent tons. Furthermore, emissions derived from the use of land capable of sequestering CO2 in the same way as forest (pastures, croplands, etc.) will also be incorporated in the CCFP. Nonetheless, this paper describes and applies the initial version of the method. The information necessary to estimate CCFP using MC3 is mainly obtained from accounting documents such as the balance sheet and the income statement. Hence, the denomination “method composed of financial accounts” (MC3).
However, further information from other company departments with specific data about certain sections (waste generation, use of land by the organisation’s facilities, among others) may also be necessary. The footprint is calculated in a spreadsheet, which is used not only to estimate CCFP, but also to determine CEF. This spreadsheet works as the land-use matrix used for the calculation of countries’ EF. Besides showing results, this spreadsheet also makes the estimation of both indicators possible.
Corporate Land-Use Matrix
The rows of this matrix show the footprint of each category of product/service consumed. The columns present, among other elements, different land-use categories, into which the footprint is divided (see Table 1
Columns are divided into six groups. The first one (column 1) corresponds to the description of the different categories of consumable products. These are classified into four major categories: energy consumption, which is subdivided into six subgroups (electricity, fuels, materials, construction materials, services, and waste products ), use of land, agricultural resources, fishing resources, and forest resources. One can include as many products as desired within each group.
The second group (columns 2-6) shows each consumption of product, expressed in specific units. The units in the first column of the group are related to product’s characteristics (electricity consumption is expressed in kwh, water in m3…). The second column indicates the value of consumptions in monetary units, while the third shows consumptions in tons. The fifth column reveals energy corresponding to each consumption expressed in gigajoules (GJ), which is obtained by multiplying tons of product by the quantity of energy used by ton in its production (GJ/t). The result is called energy intensity, indicated in the fourth column.
The third group of columns (columns 7 and 8) show each good’s productivity, in a way that one column indicates natural productivity, expressed in tons per hectare, while another presents energy productivity, expressed in GJ per hectare.
The fourth group is composed of six columns (9-14) showing the distribution of the footprint among different categories of land. These are the same as that used for the countries’ EF (fossil energy, cropland, pastures, forests, built-up land, and sea).
There is another group (columns 15 and 16), which collects the total ecological footprint (i.e. occupied land) and counterfootprint, that is, available land. The counterfootprint concept will be described in subsequent sections.
Structure of the spreadsheet showing the CEF/CCFP matrix of consumptions versus BPS.
Structure of the spreadsheet showing the CEF/CCFP matrix of consumptions versus BPS.
|PRODUCT CATEGORY||ANNUAL CONSUMPTION||PRODUCTIVITY||FOOTPRINT BY BPS TYPE|
|Consumption units [unit/year]||Euros without VAT [Euro/year]||Tons [t/year]||Energy intensity [GJ/t]||GJ [GJ/year]||Natural [t/ha/year]||Energy [GJ/ha/year]||Fossil energy [Ha*EF]||Cultivable land [Ha*EF]||Pastures [Ha*EF]||Forests [Ha*EF]||Built-up land [Ha*EF]||Sea [Ha*EF]||TOTAL CEF [Ha*EF]||COUNTERFOOTPRINT [Ha*EF*FR]|
|1. ENERGY|| || || || || || || || || || || || || || || |
|1.1 Electricity|| || || || || || || || || || || || || || || |
|1.2 Fuels|| || || || || || || || || || || || || || || |
|1.3 Materials|| || || || || || || || || || || || || || || |
|1.4 Construction materials|| || || || || || || || || || || || || || || |
|1.5 Services|| || || || || || || || || || || || || || || |
|1.6 Wastes|| || || || || || || || || || || || || || || |
|2. LAND USE|| || || || || || || || || || || || || || || |
|3. FISHING AND AGRICULTURAL RESOURCES|| || || || || || || || || || || || || || || |
|4. FOREST RESOURCES|| || || || || || || || || || || || || || || |
As discussed earlier, the methodology developed by Doménech is thought to calculate both CCFP and CEF. In this section, we describe the calculation processes of both indicators, stressing the peculiarities of CCFP calculation.
The design of this calculation method starts from the EF philosophy. Nevertheless, there are important differences between an organisation and a population, which reflects in the development of a specific calculation method to study the firms’ footprint.
Many of the goods consumed by a company do not come directly from any BPS. Companies purchase machinery and computers, consume electricity, contract services etc., and the ecological footprint of all these consumptions cannot be calculated by dividing the consumption by the productivity of the productive space, from which these goods come, because they are not biotic and therefore do not have any direct origin.
As a consequence, a problem arises, because many goods and services cannot be included in CEF in the usual way. In this case, the method philosophy is similar to that adopted in the study for territories’ footprint, since in addition to direct energy consumption, we show the impact of the energy used in the production of goods and services consumed by the organisation studied. These consumptions are precisely those originating from most CCFP.
In the case of territories, the total energy consumption by the inhabitants of a country or region under study is taken into account, making an additional adjustment depending on its goods imports or exports. Since this is not possible with firms, Doménech uses energy intensity factors, which indicate the energy consumed in the production of each product category, expressed in gigajoules per ton. These energy intensity factors would be of the same type as those used in the calculation of countries’ footprints to determine the quantity of energy incorporated to commercial flows.
Therefore, the fourth and fifth columns of the second group in the spreadsheet make sense, since we obtain the total energy incorporated in the production of each product multiplied by consumption, which is expressed in tons, by energy intensity (GJ/t). In the case of depreciable goods, CEF collects its depreciation quota each year, avoiding high fluctuations in the periods when fixed assets are acquired.
Firms’ information on some consumption is hardly expressed in tons, while it is normally available in money expenditure or in some cases (fuels, electricity) other physical units, such as litres, kwh, etc. In the first case, the conversion into tons can be made by considering the specific product average prices in the period under study (for example, euros/kg). Another option is to use foreign trade statistics, which offer information about imports and exports of the different tariff chapters expressed in monetary units and tons, thus enabling one to obtain a monetary unit/ton factor. In the second case, the transformation is made considering the item specific weight. In the case of electricity, we consider the quantity of fuel used to obtain one kwh.
Energy intensity factors comprise the amount of energy used in the production of every product included in the corporate land-use matrix (e.g. fertilisers, industrial machinery, etc.), considering an average life cycle. They are obtained from Wackernagel [25
] and other researchers’ studies [34
Regarding biotic or natural resources, whose consumption can be transformed into land in the normal way [14
], CEF also includes the energy incorporated in their production, which is calculated along with the rest of the goods by applying an energy intensity factor to the consumption of agricultural, fishing, and forest resources.
Energy footprint is also estimated for services contracted by the organisation under study, as well as for the wastes it generates, both aspects being important for the organisations’ footprint. In relation to the first, it is assumed that part of the service cost corresponds to energy consumption, and we estimate the weight of this part for each kind of service. After applying this percentage to the service price, we obtain “euros corresponding to the energy consumption” [20
]. This value is transformed into tons, considering fuel prices. Afterwards, the corresponding energy intensity is applied, in the same way as when estimating the energy footprint of any other non-biotic resource.
The methodology for waste discharges and emissions is still under development. In the case of wastes, the footprint is based on the calculation of the energy consumed during wastes management. Here, the quantity of energy recovered in recycling processes may be discounted. When doing so, we do not register the possible damaging effects caused by wastes but the energy consumption they generate.
Thus, we obtain the total energy consumed by a given organisation by considering its direct energy consumption of electricity and fuels as well as the part that is indirectly consumed, which is already incorporated in the goods and services used by the firm and in the wastes it generates.
Once this done, the CEF still compares consumption with the quantity of energy that can be assimilated by a hectare of forest according to CO2
emissions; in other words, the energy productivity of each fuel is expressed in GJ/ha. In other words, we estimate how many gig joules of each fuel were needed to emit the CO2
volume that can be absorbed by a hectare annually, applying an absorption rate by hectare and year of 5.21 CO2
]. For instance, an average world forest hectare can absorb e CO2
emissions from a consumption of 71 GJ per year of liquid fuels or 55 GJ of coal [33
CCFP calculation does not need to resort to these types of factors in this case and total energy consumption is easily transformed into t CO2 by considering the emission factors that indicate the quantity of CO2 emitted by GJ consumed in each type of fuel.
The energy footprint.
The energy footprint.
After this task, we have already obtained most CCFP. To complete it, the calculation method shows the emissions caused by the firm’s consumption of forest resources (wood, rubber, paper, etc.). We must remember that an organisation may consume “biotic” resources, such as food and wood, which are directly associated with a type of BPS (croplands, pastures, forests, and sea). In this case, CEF not only includes the energy incorporated in obtaining these goods, estimated as we have specified, but also considers the productive space that is needed to make these consumptions. This land is calculated in the normal way found in EF studies, by dividing the consumption of each product, expressed in this case in tons, by the natural productivity of the BPS assigned to each product. Natural productivity collects the amount of every natural resource that humans are able to extract per hectare. Natural productivity data are often obtained from FAO statistics (http://faostat.fao.org/site/339/ default.aspx
). For instance, if we consume 10 tons of wood and forest productivity is 1.19 t/ha, the wood footprint assigned to forest land would stand at 8.40 ha, to which the corresponding emission factor should be applied.
The natural footprint.
The natural footprint.
In addition, consumption from forests contributes to reducing the forest’s capacity to absorb CO2. Hence, it is considered that non-absorbed emissions derived from forest products consumed by a firm must be included in its CCFP. In this manner, once we have determined the hectares of forest needed by the organisation under study, these hectares are multiplied by the 5.21 CO2 t/ha absorption rate, to estimate how much CO2 is no longer absorbed.
Finally, CEF applied to organisations shows the use of productive space, both on land and at sea. Thus, the types of land are differentiated (build-up, croplands, pastures), organisations’ counterfootprint being also estimated.
The counterfootprint concept can be partially assimilated to the BPS of a country or region. In the traditional ecological footprint analysis, there is a comparison between the land needed to satisfy the needs of a given population, the EF itself, and the productive space available to satisfy these needs. From this comparison, we obtain either a deficit or an ecological reserve, depending on which of the two spaces is larger.
However, the BPS concept makes sense when dealing with territories, but not as much with organisations. All countries use, to a certain extent, part of their land to produce biotic resources. This is why the comparison between available and consumed land is always possible. EF assesses the availability of BPS, and consequently, the fact that a territory population satisfies its needs with products that originate in the territory itself. From the aspect of sustainability condition, a country without productive space can hardly be sustainable, because its inhabitants always need to consume, even just to satisfy their vital needs.
In the case of companies, this assumption is difficult to maintain, since many of them do not need land to produce biotic resources. A car garage or a financial entity will develop their activities without any direct link with this type of resources. This is why the concept of counterfootprint appears. It starts from the positive regard for companies’ availability of natural capital, despite the desirable reduction of their footprint by being more efficient and by curbing consumption.
Therefore, investments in this kind of productive space reduce their footprint. In this way, this indicator could encourage the private sector involvement in the preservation of natural spaces (Doménech, 2007), this being considered positive in terms of sustainability. Land devoted to croplands, pastures, forests, gardens, or for instance marine reserves owned by a firm will contribute to partially counteract CEF, since all these are considered counterfootprint. To reduce a hectare of footprint, it is necessary to acquire the same quantity of one of these spaces.
When investments are made in wooded land, CO2 emissions and consequently CCFP will also decrease, considering the absorption rate of 5.21 CO2 t/ha/year. Net CEF is obtained by subtracting counterfootprint from CEF. In the same way, net CCFP is the result of subtracting the CO2 absorbed by investments in counterfootprint from CCFP.