01 | GLOSSARYDebunking the ‘carbon jargon’
A glossary of terms to help you navigate through the murky world of carbon emissions reporting.
Activity-based and spend-based carbon accounting
An organisation’s greenhouse gas emissions are calculated using two methods: spend-based and activity-based carbon accounting.
Spend-based methods takes the financial value of purchased goods or services and multiples it by an emissions factor (the amount of emissions produced per financial unit), resulting in an estimate of the emissions produced.
Activity-based methods also use emissions factors to determine an activity’s emissions output. These methods use data to specify who many units of a particular product or material an organisation has purchased, like litres of fuel, kilograms of textiles, etc.
Spend-based methods’ emission factors are built on industry average emissions levels. They are great for getting a quick snapshot of an an organisation’s emission hotspots but they can obscure key information about specific purchases, and can be unreliable when prices fluctuate. Using industry averages also means that organisations are only in direct comparison with other organisations in the same industry.
Hybrid methodologies use spend-based and activity-based data, combining the higher accuracy of activity-based estimates with more readily available spend-based data.
Despite this, there is no universally-accepted method of carbon accounting, and different methodologies will give wildly different results.
Carbon accounting
Carbon accounting is the process of measuring the amount of greenhouse gases (GHGs) produced directly and indirectly from an organisation’s activities.
An organisation’s estimated carbon emissions calculated from carbon accounting are broken down into three categories, or ‘scopes’, to simplify the process.
Scope 1 – emissions generated directly by the organisation and its activities. For example, fuel use or office space energy usage.
Scope 2 – emissions that an organisation indirectly causes when the energy it purchases and uses is produced. For example, purchased heat, energy and steam.
Scope 3 – any other emissions that don’t fall under scope 2 or 3, including business travel, employee commuting, leased assets and investments.
Carbon dioxide
Carbon dioxide (CO2) is the most common greenhouse gas emitted by human activities. Other GHG gasses like methane (CH4) & nitrous oxide (N2O) also contribute to global warming. Their combined effect of these gasses is known as ‘Carbon Dioxide Equivalent’ (CO2e) and is the unit of we use on our platform to measure an organisation’s impact.
For a deeper dive on all of these topics we recommend this blog on carbon dioxide equivalent by Climate Partners
Carbon metric
There is currently no industry standard, unified carbon metric that enables direct comparison of CO2e emissions for every business. Carbon accountants use a range of different methodologies, making the results unreliable and widely variable between different carbon accountants.
Mycelium normalises (see normalisation) the emissions reported by an organisation to provide a common, standardised method for measuring carbon emissions providing a single point of truth for company emissions.
Direct comparison
We believe that for carbon data to be truly reliable and transparent, it should enable the direct comparison of any organisation’s emissions with another, regardless of whether they sit in the same sector or industry.
Current methods of carbon accounting rely strongly on industry averages, which means that organisations can only be compared to other organisations in the same industry.
This can present a misleading image of an organisation’s sustainability. For example, an oil company may have lower carbon emissions in comparison to another oil company, giving it the appearance of operating sustainably within that sector because the average industry emissions are very high. However, when compared to an organisation in another, non-polluting sector, the oil company’s emissions will be far higher.
By enabling direct comparison of any companies, we’re ensuring that highly polluting companies can’t hide behind industry averages. Our carbon data gives a clear, accurate picture of an organisation’s emissions, regardless of their industry.
Interoperability
Interoperability of carbon data is key to building a reliable and transparent carbon accounting system. Carbon accountants use various methodologies to measure carbon emissions, making available data unreliable and inconsistent, with siloed platforms giving wildly different company results. This creates huge problems for organisations looking to legitimately understand their carbon emissions, and for those looking to understand an organisation’s sustainability.
By developing a unified carbon metric to validate emissions reporting across all platforms, Mycelium is ensuring the interoperability of carbon data across the entire carbon accounting ecosystem, creating one reliable source of truth.
t CO2e / £m
Tonnes of carbon dioxide equivalent per unit of revenue. Essentially, if a company makes one million pounds of revenue, how much carbon will be emitted into the atmosphere.
Mycelium score
This is the overall sustainability score out of ten we have awarded an organisation. An organisation’s Mycelium score is calculated based on several factors, with 6.5 awarded for an organisations emissions intensity compared to the rest of its industry, and 3.5 for the quality and trustworthiness of the data it has provided.
(6.5) Be the lowest carbon intensity
The easiest way for an organisation to achieve a high Mycelium score is by reporting the lowest carbon dioxide equivalent emissions within their industrial sector. This will enable them to achieve up to 6.5 on the Mycelium scoring scale.
Any emissions left unreported will be estimated by us based on yearly revenue and industrial classification, and this carries a penalty. For more information, see normalisation.
(1.0) Claim the listing
It’s important that organisations claim their listings to confirm the emissions profile we have for them is accurate. Claiming the listing enables organisations to achieve an extra 0.3 on the Mycelium scoring scale.
(6.5 x by the transparency score) Be fully transparent
We calculate a transparency score for each listing based on the percentage of emissions that have been reported by an organisation. By providing a complete emissions profile (including reporting categories where there are zero emissions), organisations are not penalised in any way. So if a company only achieves a transparency of 50% the max they can score in the carbon intensity bucket is 6.5 x 0.5 = 3.25
(2.5) Use a third party to calculate emissions
We place the most trust in emissions data that has been calculated by a independent third party, such as carbon accountants. By using a third party, organisations can gain an additional 2.5 on the Mycelium scoring scale.
Carbon accountants can also report an organisation’s emissions profile directly to us, which will count as a listing being claimed, earning an additional 1.0 on the Mycelium scoring scale.
03 | CONTACTLet’s build what the world needs, today
If you’re interested in working together to solve the greatest challenge the world faces, get in touch.
crew@mycelium.global
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