Benchmarking companies based on their climate impact

Benchmarking corporate carbon footprints is one of the most frequently requested, and most misunderstood, topics in climate accounting. Companies calculate their emissions, receive a single number expressed in tonnes of CO₂e, and almost immediately ask the same question: is this good or bad?

1. Why benchmarking keeps coming up in carbon accounting

Once a company has calculated its carbon footprint, the next question is almost always comparative: How do we perform compared to others?

This question arises in different situations. Sometimes it is about sense-making-trying to understand whether a footprint is “high” or “low.” In other cases, it is about positioning: communicating performance internally or externally relative to peers. Often, benchmarking appears even earlier, before a full footprint exists, as a way to estimate what a “typical” emissions profile might look like and which scopes or activities are likely to be material.

These motivations are legitimate. Carbon footprints are abstract numbers without context, and comparison is a natural way to create meaning. The risk, however, is that benchmarking is treated as a simple lookup exercise, when in reality it requires careful methodological choices to avoid misleading conclusions.

2. Why benchmarks matter beyond individual companies

Benchmarking is not only about interpretation; it also influences behaviour. A substantial body of research shows that organisations are more likely to take sustainability action when they can compare themselves to similar peers.

This so-called “peer effect” appears across domains, from sustainable investing to technology adoption and energy efficiency. The mechanism is consistent: seeing comparable organisations act reduces uncertainty about expectations and feasibility. Comparison makes sustainability efforts feel normal rather than exceptional.

In a corporate climate context, benchmarks help translate abstract climate objectives into socially anchored reference points. They shape how ambitious a company perceives itself to be and how much effort it considers reasonable. This makes benchmarking a powerful tool—but also one that needs to be applied responsibly.

3. What makes a benchmark meaningful

Not all benchmarks are equally useful. In practice, four conditions determine whether a benchmark adds value or creates confusion.

Relevance is the starting point. Comparisons only make sense when companies are sufficiently similar. Sector differences dominate emission profiles, while geography and reporting year also matter due to energy mixes and decarbonisation trends.

Scale and normalisation are unavoidable challenges. Larger companies emit more in absolute terms, but emissions do not scale linearly with size. Turnover and full-time equivalents are commonly used normalisation factors, each with limitations. Importantly, a large share of emission differences between companies cannot be explained by size alone, which is precisely why benchmarking remains informative.

Distributions matter more than averages. Corporate carbon footprints typically follow skewed distributions with long tails. Averages hide this structure. Understanding whether a company sits near the median, among the lower emitters, or in the high-emission tail provides far more insight than a single benchmark value.

Completeness, particularly for Scope 3, is a critical constraint. Many companies report partial Scope 3 data or exclude categories. Benchmarking incomplete footprints against complete ones distorts results. At minimum, benchmarks must clearly distinguish between full and partial data and avoid silent aggregation.

Ultimately, a benchmark is only useful if it is actionable, if it helps identify where a company differs most from peers and where mitigation efforts are likely to be most impactful.

4. From comparison to prioritisation

When applied carefully, benchmarking supports prioritisation rather than judgement. By positioning a company within percentile-based distributions across scopes, it becomes possible to see where emissions are relatively high or low compared to peers.

A company may find that it performs close to the median in Scope 1, but stands out in Scope 2 or Scope 3. This does not explain why emissions are high, but it provides a structured signal on where further analysis and mitigation planning should focus.

Benchmarking cannot replace detailed, company-specific analysis. It does not account for business models, strategic constraints, or historical investment decisions. What it does provide is context, a way to interpret numbers and to learn from patterns observed across comparable organisations.

For sustainability consultants, the role of benchmarking is therefore not to produce rankings, but to support informed discussion and decision-making. Used as a decision-support tool rather than a scorecard, benchmarking can help companies move from comparison to action.

Learn more about benchmarking by watching the full webinar hosted by our colleagues Kenneth Van den Bergh (Co-Founder & CEO) & Felix Hoornaert (Carbon Expert)

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