Carbon Intensity Per Revenue

Carbon intensity per revenue measures the amount of greenhouse gas emissions (usually in CO₂e) a company generates for each unit of revenue (e.g., kg CO₂e per pound earned). It reflects how efficiently a business generates income relative to its carbon footprint.

FAQs

Carbon Intensity per Revenue (also called emissions intensity) measures how much carbon dioxide equivalent (CO₂e) is emitted for every unit of revenue a company generates. It is typically expressed as:

CO₂e / £ revenue

Example: 0.2 kg CO₂e per £1 revenue

This metric helps assess how efficiently a company generates economic value relative to its carbon footprint. It allows for comparability across companies, sectors, and time, and is useful for investors, regulators, and internal management when evaluating carbon performance.

1. What is carbon intensity per revenue?

It is the amount of greenhouse gas emissions (usually in CO₂e) a company emits for every unit of revenue earned. It indicates how carbon-efficient the company's business model is.

2. How is it calculated?

Carbon Intensity per Revenue = Total GHG Emissions (CO₂e) / Total Revenue

You can use emissions from different scopes (Scope 1, 2, or 3), depending on what’s being measured or disclosed.

3. Why is it important?

It helps stakeholders understand how emissions are linked to business growth. A lower carbon intensity means a company is generating more value with fewer emissions, which is a positive signal for sustainability and long-term resilience.

4. What are the benefits of using this metric?

• Enables benchmarking against peers.

• Tracks efficiency improvements over time.

• Useful for investor ESG ratings and sustainability indices.

• Supports net-zero and decarbonization strategies.

5. What are its limitations?

• Revenue can fluctuate due to factors unrelated to emissions.

• Doesn’t capture absolute emissions, which may still be high.

• High-margin businesses may look more efficient, even with large carbon footprints.

6. Should Scope 3 emissions be included?

Ideally, yes—especially for companies with significant upstream or downstream impacts (e.g., consumer goods or financial services). Including Scope 3 gives a more complete picture but can be harder to measure accurately.

7. How do you use this metric in target setting?

Companies can set intensity-based reduction targets, such as reducing carbon intensity per $1M revenue by 50% by 2030. This complements or supplements absolute reduction targets.