Dell, Carbon Footprints, and Boundaries

I saw this one coming.

Dell Computers has been criticised in The Wall Street Journal and other newspapers over its recent "carbon neutral" claims.

Dell made headlines first by setting a goal to become "carbon neutral" and then again by announcing that it reached its target ahead of schedule. However, critics argue that the company's reported footprint only covers a fraction of the emissions associated with their computers.

Dell's carbon footprint includes emissions from its on-site boilers, company cars, building electricity use, and staff business travel. These categories comply with the requirements of ISO 14064, which states that organisations must include emissions from on-site energy generation, own vehicles and purchased electricity. 14064 states that organisations may choose to include third-party emissions from suppliers, customers and other stakeholders. Dell chose not to include these emissions sources, and this decision has landed them in hot water.

As we have noted previously, setting a narrow boundary may result in a smaller reported carbon footprint (and a smaller carbon offset bill), but can represent a false saving. In this case, Dell excluded all of the outsourced emissions from the suppliers who manufacture their computer parts, as well as the energy emissions from consumers using the computers. While these emissions are not Dell's direct responsibility, the Wall Street Journal's criticism stems from the fact that at least some of them are material to the company's business success. What's more, these emissions are so large that excluding them appears to have saved the company money on its offsetting bill. Unfortunately, this decision has had a reputational cost.

As we predicted way back in December 2007: "Much of the pressure to measure carbon footprints comes from investors, customers, and regulators, and they expect this information to be made publicly available. An unreasonably narrow boundary may attract criticism from outside reviewers concerned about potential corporate 'greenwash'."

One point the WSJ gets wrong is their claim that "there is no universally accepted standard for what a footprint should include, and so every company calculates its differently". In fact, the International Standards Organization (ISO) issued ISO 14064-1 in Spring 2006, and companies around the world are using it and the related GHG Protocol to calculate emissions consistently.

Carbon Clear uses these standards to calculate corporate carbon footprints. We employ a number of specialised tools to help companies to determine which third-party emissions are material - and thus should be included in their own footprint, and which they can be relatively comfortable placing outside their boundaries. As was the case with Dell, we are good at anticipating and addressing the problems that stem from incomplete carbon management planning and helping to protect our clients from reputational risk. Our aim, as ever, is to help companies measure and reduce their carbon footprints in a robust and credible manner.