Article by Dean Malmgren
For IDEO to commit to Net Zero or to prioritize emissions reductions initiatives, we first needed to understand the magnitude of our global carbon footprint and which factors were the greatest contributors.
We quickly realized the complexity of the challenge. There are hundreds of people across IDEO, and each of them make purchases on behalf of the firm in the running of our business — from video conference subscriptions to user research project expenses. With at least 80–90% of any organization’s carbon footprint coming from Scope 3 emissions (including upstream suppliers), calculating one’s carbon footprint is a significantly distributed issue.
But we knew we had to get started. We began by exploring a wide variety of emissions accounting solutions, from countless start-ups in the space to corporations like Salesforce repurposing their internal tools for emissions accounting. In our view, the ideal carbon accounting solution possessed several qualities. It would be accessible and intuitive enough for IDEOers to understand the tradeoffs they are making during everyday purchases. It would be shareable with our clients who are increasingly invested in our sustainability efforts. It would be reasonably priced for a small-to-medium sized business that intends to spend in the low six figures on carbon offsets and hopes to reduce its emissions by 7–8% per year. Most importantly, it would track emissions down to the company level to make it possible for us to vote with our dollars when considering prospective suppliers.
Unfortunately, most of the existing carbon accounting solutions haven’t met our particular set of needs. They often involve cumbersome, manual data entry. The carbon footprint is often estimated at an industry, not company, level. And when you’re hoping to use such a tool to save 7–8% of low six figures per year off your carbon offset budget, emissions accounting solutions can be disproportionately expensive. These are early days for the greenhouse gas accounting industry and, as momentum builds, so will the quality of accounting options available.
After exploring the many solutions in the market, we ultimately embraced a carbon accounting technique shared by Jane Yang, former Head of Data & Senior Policy Analyst at Basecamp, who used academic literature to convert dollars spent in a particular category into the equivalent greenhouse gas emissions. This method gave us a framework to pull data from our Enterprise Resource Planning (ERP) systems and estimate the carbon footprint of emissions-intensive categories like energy consumption, travel, and food. While this technique is not perfect, it was a critical step in better understanding which areas of our business contribute most to our global carbon footprint.
Of these areas, airline travel was having the most detrimental environmental impact. As a consulting firm with offices, clients, and research across the world, we will need to be very thoughtful in how we balance the benefits, and environmental costs, of travel. More on this in a subsequent post.
Estimating IDEO’s carbon footprint also revealed another dilemma: our ERP systems had no data on the downstream impact of our work with our clients. In speaking with experts, we received mixed messages on how to properly account for emissions outcomes from consulting firms like IDEO. On the one hand, our deliverables are often digital assets that have a negligible carbon footprint. But on the other hand, these deliverables represent strategic recommendations or new products and services that could have significant environmental implications. It’s complicated. While we have a clear ethical responsibility to set our clients and the planet up for success, we have chosen not to include the downstream impact of our client work at this time. This is a decision that we will continue to assess going forward.
With that, we turned our attention to the data on hand. Our team’s background in scientific research gave us enough familiarity with the academic literature to find relevant conversion factors for the emissions per dollar spent on different categories of expenses like travel, for example. Using this methodology, we estimated IDEO’s carbon footprint at around ~14,500 t CO2e in 2019, ~6,400 t CO2e in 2020, and ~4,950 t CO2e in 2021. The good news is that these numbers are trending in the right direction, although these improvements were largely side effects of the pandemic (as with many companies). As we plan ahead, we intend to take another look at third-party products to see if any have started to gain an edge, and we’d enjoy the opportunity to learn alongside others that are going through a similar process. Any takers?
This is the second article in a six-part series detailing IDEO’s journey to becoming Net Zero, the lessons we’ve learned, and our continued commitments to addressing climate change. Join us for weekly updates on The IDEO Journal.