co2e in Cost Engineering
How have other cost engineers addressed the co2e calculations? Is a best case calculation used? Supply chain reporting with the offer and subsequent validation by cost engineering? Where do you obtain your data? Or do the cost engineers not get involved in this?
Great question. I can tell you that a lot of the software that are available are adding CO2 to their calculations. I'm interested to see how others respond.
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Owner and Founder
Society of Cost Engineers
I have inserted two links to two articles that may be helpful regarding CO2 and ESG. The first article is written by the famous Harvard Business School Professor Robert S. Kaplan (now retired). Kaplan did the pioneering research in the 1970s on activity-based costing (ABC).
Addressing Climate Change Must Begin with Verifiable Carbon Accounting - ProMarket
Understanding the Rapidly Evolving World of Sustainable Finance (northwestern.edu)
Here is a link to a book written by Jan Emblemsvag, a practitioner and now a professor in Norway. (Jan and I are friends and co-authors.)
Activity-Based Cost and Environmental Management: A Different Approach to ISO 14000 Compliance: Amazon.co.uk: Emblemsvåg, Jan, Bras, Bert: 9780792372479: Books
Gary … Gary Cokins
The Kaplan article that Gary references is a great read and lays out a great vision for how finance can implement and a manage carbon accounting in the future. In terms of current personal observations, finance is contemplating how to take a more active role in the carbon accounting conversation and function but I have yet to run across an example where finance has taken the lead role - it is more collaboration between finance and the sustainability office. It is clear, however, that Finance will be stepping into a leadership role in this space in the very near future. As new requirements and regulations are adopted that assess a financial cost for carbon and other greenhouse gas emissions there is no choice. This is already the case in parts of Europe where a patchwork of cap and trade and carbon tax policies exist and are expanding - reference the EU's new carbon border tax that is set for implementation in 2026.
As for the calculations and approaches that are used, the Greenhouse Gas Institute offers guidance on how an organizations can prepare to perform carbon accounting The Greenhouse Gas Protocol (GHGP) is also a great reference point on how Co2e emissions can be measured and they offer a free tool that includes methodologies for calculating emissions. I have included links to all three below.
At 3C we are working with a client to deploy a solution to provide transparency to carbon taxes incurred at a product level. Would welcome the opportunity to discuss further with you if you like.
Best - Ian