I’m a company, I’m taking part in label Transmission
Label Transmission is a voluntary, decentralised, collaborative and international scheme that brings together public and private players who respect the first best practice of the transition :
Producers provide customers with the carbon content of their products
Any company can take part : all that is required is for its manager to sign a declaration of participation with a few principles ensuring that the company transmits rigorous and comparable carbon impacts.
This page describes :
1- It is increasingly profitable and easy for companies to adjust their offer to the transition demand from their customers.
– It’s more profitable, because the demand for transition will increase for several generations, as carbon-related damage accelerates. It’s a threat to business, but it’s also a tremendous opportunity (just think of two of the biggest success stories of the last 10 years, Musk and Tesla, and the Chinese and solar panels).
– Easier, because new methods (cumulative carbon accountings) free up a sticking point : it becomes easy to calculate (and project) the carbon impact of one’s offer in a rigorous and comparable way, and therefore interesting for the customer.
2- Declaration of participation in the Transmission label signed by the company director
1- The company informs its customers of the Product Carbon Content of the goods and services it sells them on all documents indicating the price to the customer (invoice, quotation, price list, etc.).
2- The content transmitted is taken in a rigorous and comparable manner from the company’s most recent annual Production Carbon Account for the activity of the product, following the principles (described in the appendix) common to cumulative Carbon Accounts.
3- The method avoids applying a margin of conservatism to the carbon content of the product of a supplier who also complies with the Transmission label good practice, and encourages its deployment.
Appendix
Basic principles for keeping the Carbon Account produced by Cumulative Carbon Accounting
The company keeps at least one product carbon account per significant specific activity (specific means in Europe “distinguishing between activities in the NACE 63 classification of activities”). If the company keeps several accounts, it uses the same scope of analytical accounts to calculate the cost price and the Product Carbon Content.
All the invoices in the general ledger are taken into account, respecting their accounting allocation by financial year.
The Product Carbon Account records (in simple part) the production carbon for the year (1) and the sales carbon (2). The difference between production carbon and sales carbon is kept as small as possible and carried forward to the next year’s production carbon.
The Account is used to calculate the Product Carbon Content transmitted with each invoice relating to the activity. This is the amount of the invoice multiplied by the monetary emission factor of the last closed Product Carbon Account, i.e. its production Carbon divided by the activity’s turnover.
– This Monetary Emission Factor can be replaced by a Physical Emission Factor if the Carbon Account is kept in this unit and the quantity appears on all the invoices for the activity.
– The company can choose an Estimated Emission Factor if it considers that it will reduce the gap at the end of the year between Production Carbon and Sales Carbon.
The company keeps these accounts available for verification by a trusted third party appointed by a public authority, together with a list of any (justified) deviations from these principles.
1- Exercise production carbon
Production carbon is the sum of the direct emissions and captures of the activity and the Product Carbon Content of the goods or services purchased during the financial year.
11- Direct emissions and captures from the business
The calculation follows the rules (known as Scope 1) of a carbon protocol (GHG Protocol, Bilan Carbone or equivalent). As an exception, direct combustion emissions are pre-counted with the Product Carbon Content of fuel purchases.
12- Carbon Content Product of goods or services purchased relating to the financial year
This is the one indicated by the applied supplier who has signed an equivalent declaration.
Failing this, the content is estimated on the basis of the quantity indicated on the incoming invoice multiplied by an emission factor (or unit Product Carbon Content) from a public source for the activity corresponding to the good or service, increased by a margin of prudence.
– The “margin of prudence” is assessed by the company and is equal to or greater than 20%.
– Public source’ refers to the Input-Output Carbon Matrices produced at the initiative of the United Nations (e.g. INSEE carbon accounts) and public emission factor databases (e.g. ADEME). The nomenclature of the Matrices may (with justification) be refined or (for accounts kept by small organisations) simplified.
2- Sales carbon for the financial year
This is the sum of the Product Carbon Content transmitted on the activity’s sales invoices for the financial year.
The Product Carbon Content is the total quantity of greenhouse gas carbon equivalents emitted throughout the production chain of the good or service: either by direct emissions from the organisation, or by the Product Carbon Content of its inputs. It does not contain an estimate of the emissions caused subsequently (their precise accounting is the responsibility of the subsequent stage concerned).
The name Product Carbon Content and its definition were inspired by the work of Professor Ulf Von Kalckreuth. It brings together numerous names with equivalent definitions: integrated emissions from the European Union’s Border Carbon Adjustment Mechanism, e-liabilities from the E-liability Institute, the carbon footprint of product groups in Input-Output matrices, emissions from Life Cycle Analyses ‘from mine to customer’, emissions from upstream scopes 1, 2 and 3 of carbon protocols (GHG Protocol, Bilan Carbone, etc.).
The concept of Cumulative Carbon Accountings and their principles are inspired by: the work of Professor Ulf Von Kalckreuth; that of Professors Robert Kaplan (Harvard Business School) and Karthik Ramanna (Oxford University), inventors of the first cumulative carbon accounting system (E-liability ledger); and other cumulative carbon accounting systems (Shifters Collaborative Accounting, Carbones sur factures Product & Financial Carbon Accounts, etc.).
The Annual Carbon Account is an account kept by an organisation in kg of CO2 equivalent for its activity, or each significant activity. Based on transactions on goods and services in the “cash” accounts, it records the year’s production emissions (direct or from the Product Carbon Content of purchases) and the emissions from the Product Carbon Content passed on to customers with the activity’s sales for the year. It aims to achieve balance.