Our first carbon audit
That's it, we finalised our first carbon audit a few weeks ago at Alan. An opportunity for us to look back on why we did this and how, and what's next.
☁️ Why a carbon audit?
We are not going to teach you anything: our planet is currently experiencing a climatic upheaval that will have a considerable impact on our ecosystems, and in particular on human civilisation. The IPCC (Intergovernmental panel on climate change) states that man-made carbon dioxide emissions must fall by 45% by 2030 if we are to limit global warming to 1.5°C.
It is clear that action by all is needed: by citizens, by states, but also by corporates. That is why we decided at the beginning of the year to take up the environmental issue at Alan, and also to limit our impact.
The first step is to measure and quantify our impact so that we can compare ourselves with industry averages and define our own areas for improvement. Measuring the greenhouse gas (GHG) emissions linked to one's economic activity is called "making a carbon audit". In concrete terms, a carbon audit is an evaluation carried out by a competent expert third party of direct and indirect GHG emissions (what is known as the carbon footprint) according to a determined and certified methodology. And in a company, directly but especially indirectly, everything has a "carbon cost": buying a computer, going to work, etc. Hence the idea of understanding everything!
For our first carbon assessment, which we carried out for all our activities (France, Spain, Belgium) for the year 2020, we worked with Carbo. And this is how it turned out.
💚 Alan's 2020 carbon audit
Here are our results:
Alan produced between January 2020 and December 2020 inclusive 898 tCO2e (=tonnes of CO2 equivalent)
Relative to the number of Alaners, this corresponds to ~3.8 tCO2e/person, or 204 days of gas heating.
Relative to our income, this corresponds to ~30 gCO2e/€. An average annual premium for Alan is therefore 18 kgCO2e, or 9 average meals.
More details can be found at the following public link.
So is this a good or bad result? To be honest, it's quite difficult to say, for that we have to compare ourselves with other companies in similar sectors. But:
There are relatively few companies today that make their carbon footprint public, and the existing databases for comparison are still too limited;
For those that do make it public, not all play the game to the end. It should be noted that scope 3 accounting (i.e. indirect emissions other than those related to energy consumption, which include, for example, emissions related to our service providers) is not currently mandatory, even though they represent 93% of Alan's footprint - which is typical for service companies. AXA, for example, does not present its scope 3 emissions, although it is clear that financial institutions such as insurance companies have the largest scope 3 emissions.
Alan straddles two sectors: internet/tech and insurance. What is the right comparison?
Finally, we have carried out this carbon assessment in 2020 which has been severely impacted by the COVID health crisis, which itself transformed human behaviour and therefore artificially changed the world's carbon footprint.
All this being said, Alan's emissions in 2020 are 94% lower than a company of the same size in the insurance sector, but 26% higher than a company of the same size in the Internet sector (according to our provider's benchmarks).
Note that the majority of emissions are estimated by the following mechanism (usually for lack of more physical information): X euros spent = Y kg of CO2 emitted. The correspondence between X and Y is achieved through monetary emission factors, whose calculations include significant uncertainties.In the case of our carbon audit:
Nearly 50% of our carbon footprint is linked to the use of support services and third parties, for which we only have invoicing data: law firms, insurance experts and consultants, communication, management delegates, etc. These 50% are therefore very directly subject to the uncertainty linked to monetary emission factors, which makes our assessment questionable.
The carbon impact of working from home is not taken into account: for example, the electricity consumption related to the work of the Alaners at home is not taken into account, whereas that of the offices is, logically. This can be problematic for a company implementing a Work From Anywhere policy and many are beginning to point out that working from home is not so environmentally friendly.
Gathering the necessary data for the audit was a tedious task, especially when it had to be collected from third parties who were not always very transparent and were often far from having carried out their carbon footprint. This sometimes meant extrapolating, and therefore making assumptions and approximations.
What we learnt
This did not prevent us from drawing the following lessons:
Digital use is certainly relatively important (around 20% of the total - to the 10% mentioned on the certificate above must be added the digital tooling counted in the "Operations" item, which represents ~90tCO2e/year), but does not represent the predominant emission area.
The most important source of emissions comes from our use of third parties and intermediaries, whose behaviour and climate commitments we do not really control - 50% of the total.
Within the second largest emissions item, we have become aware of the considerable weight of online advertising: our marketing budget represents ~188tCO2e, or 20% of the total. This includes the emailing campaigns of our Sales.
The carbon cost of offices is relatively low (around 13% of the total, i.e. a volume 7% smaller than a tech company of the same size), but does not include, as said before, the cost of teleworkers' homes.
Travel has a marginal weight (~2.9 tCO2e, less than 1%), which is explained by the traffic restrictions linked to the health context of the year 2020.
🚀 The next steps
The carbon footprint is only the first layer
What does this carbon audit actually say about our impact?
We can already see the effect of certain measures taken in the company a few years ago. For example, the Navigo pass, which is paid for at 100%, and the subsidy of rather low-carbon means of transport allow us to have a relatively marginal impact on travel.
The high-level avenues that we can already identify are (i) Working with our main service providers. We do not have a very precise idea of their impact (many have not carried out a carbon assessment, hence the use of uncertain monetary emission factors). Making them aware of the practice is crucial - and there will surely come a time when we can also choose our partners among the most climate-friendly. (ii) Make more ambitious actions on our biggest sources of emissions. We have already started to take the first decisions, such as changing our waste management provider.
This carbon assessment is a first step in our commitment. We still have many things to clarify and many projects to launch. For example, we must first set ourselves objectives: where do we want to be in 5 years? 10 years? Then, what actions in practice will enable us to get there? How will we reduce our direct and indirect emissions? Which ones make more sense in the light of this first carbon assessment?
Being a virtuous player in the ecosystem
What is clear is that this first step has given us the desire to federate our ecosystem around strong commitments and to ensure that the people and actors around us get involved. Individual actions in this fight are almost insignificant, but as is often the case, there is strength in numbers!
Last February, we joined the Board Impact, a committee that aims to foster good practice and make the French start-up ecosystem more diverse, mixed and environmentally aware.
Last April, we decided to sign the Climate Act. The Climate Act is a commitment by more than 250 companies, start-ups and scale-ups, to (i) measure their carbon footprint before 2021 (ii) share the conclusions of this assessment (iii) take concrete action to limit the emissions identified. We believe in it, and this blogpost is here to remind us (and to apply it!)
Finally, let's not lose sight of our mission: to make Europeans live better health lives - and that surely means more environmentally friendly health. It should be noted that on a global scale, the health sector accounts for almost 5% of emissions. Moreover, the Shift Project, a French think tank committed to the challenges of climate change, has just published a report on decarbonising the health sector. Surely there are good ideas to be had, and we hope to be part of the equation soon!
In short, this is just the beginning. Ultimately, of course, the aim is to contribute to global carbon neutrality. Let's hit the road!