Understanding Carbon Footprints: A Key Step in Corporate Green Transformation

Under the "Dual Carbon" goals, the term "carbon footprint" frequently appears in policies, industry reports, and corporate annual reports. What is it? What does it mean for enterprises? Why are more and more factories obtaining carbon footprint certification?

I. What is a carbon footprint?

A carbon footprint is the aggregate of greenhouse gas emissions caused by an enterprise, activity, product, or individual, typically measured in carbon dioxide equivalent (CO₂e). It spans the entire product life cycle: from raw materials, production, and transportation to usage and disposal.

Accounting is generally categorized into three scopes:

Scope 1: Direct emissions. Examples include emissions from fuel combustion and chemical reactions during manufacturing processes.

Scope 2: Indirect emissions. Examples include emissions associated with purchased electricity, steam, or thermal energy.

Scope 3: Indirect emissions across the value chain. This includes upstream raw materials and transportation, as well as downstream usage and end-of-life disposal. For manufacturing enterprises, Scope 3 emissions often account for the largest share—sometimes nearly 70%.

Accounting boundaries typically follow either a "cradle-to-gate" or "cradle-to-grave" approach.

II. Why is it becoming increasingly important?

From a policy perspective, carbon footprint management has been elevated to a formal institutional requirement. Plans for the "15th Five-Year Plan" period include the deployment of standards for product carbon footprint accounting, carbon labeling certification, and international mutual recognition. By the end of 2025, my country had issued 15 national standards for product carbon footprint accounting, covering sectors such as iron and steel, cement, and lithium batteries.

In the market, the carbon footprint is becoming a "green pass" for international trade. Measures such as the EU's carbon border adjustment mechanism (CBAM), supply chain assessments by multinational corporations, and procurement standards set by central state-owned enterprises all give low-carbon suppliers a competitive advantage. Carbon footprint management has shifted from an "optional task" to a "mandatory requirement."

For the enterprises themselves, accounting allows them to gain a clear picture of their carbon emissions, identify key areas for reduction, and optimize energy costs.

III. How are accounting and certification conducted?

Accounting is based on standards such as ISO 14067, PAS 2050, and GB/T 24067-2024. The process involves defining the subject and functional unit, mapping the process flow, establishing boundaries, collecting data, calculating the carbon footprint, and undergoing third-party verification.

Certification follows a model comprising document review, initial factory inspection, product carbon footprint verification, and post-certification surveillance. Enterprises submit applications and obtain certification after passing reviews and verification; certificates are typically valid for two years and subject to periodic oversight. Digital tools enhance efficiency—for instance, big data in the power sector enables real-time energy consumption data collection, thereby shortening calculation times and reducing costs.

IV. Factory Action

Our factory is currently actively pursuing carbon footprint certification. This initiative responds to the national "Dual Carbon" strategy and aims to boost our green competitiveness. Adhering to industry-standard practices, we are analyzing the full lifecycle carbon emissions of our products—spanning raw materials, production, and factory exit—while identifying emission sources and establishing comprehensive data records.

To reduce carbon emissions, the factory is optimizing its energy consumption mix, implementing energy-saving technical upgrades, strengthening energy management, and lowering carbon emission intensity per unit of product. We are also exploring the use of renewable energy sources, such as photovoltaic power generation.

Carbon footprint certification offers three key benefits: it enhances market competitiveness, as low-carbon products are increasingly favored by customers; it builds trust within the supply chain, with carbon data serving as a criterion for supplier evaluation; and it lays the groundwork for future carbon management, supporting precise emission reduction efforts.

Conclusion

A carbon footprint represents more than just a set of figures; it signifies an enterprise's commitment to the environment and the future. From assessing our baseline emissions to achieving certification, every step marks solid progress in our green transformation. We believe that embracing carbon management early will give us a head start in the race for green competitiveness. We will share updates on the certification process as they become available; please stay tuned.