What is a foundation year?

In sustainability work, guided by Greenhouse Gas Protocoland the and theScience Based Targets initiative (SBTi), the base year serves as the starting line. It is a historical reference year (e.g. 2019) when a company calculates its scope 1, 2 and 3 greenhouse gas emissions - i.e. direct emissions, purchased energy and emissions in your value chain. This baseline is used to track reductions towards, at best, net zero targets - and all companies reporting their emissions should have a base year.

Recalculate base year

Recalculating base years means that the original emission figures are adjusted when major changes occur, so that comparisons over time remain relevant. Without it, the reductions risk being an illusion.

Why recalculate base years?

Why do you need to recalculate your company's base year? Businesses change. Recalculating your base year ensures data integrity, counteracts greenwashing and boosts the confidence of stakeholders such as investors. For example, if company A buys a factory with high emissions, but doesn't recalculate the base year, progress looks better than it really is. Similarly, if company B sells a high emitting business. Without recalculation, it appears that they have reduced their emissions more than they really have.

ZeroMission's climate strategist Rounak Niranjan is an expert on climate projections and Science Based Targets. 

When should I recalculate my base year?

Recalculation is triggered when changes are 'material ' - often defined as a change of 5% or more, according to SBTi recommendations. Common examples:

• Structural changes: mergers, acquisitions or divestments.
• Methodological changes: shift to more reliable data sources or extended system boundaries (e.g. new parts of the value chain).
• Errors detected: corrections of mistakes in the initial calculation.

Recalculating base years according to the GHG Protocol and SBTi

Who decides? Your company decides whether it is relevant for you to recalculate your base year or not - but the decision is not arbitrary. The GHG Protocol recommends that companies establish a clear policy on base year recalculation and designate responsible parties. SBTi sets similar requirements for validated targets. Often the process is also reviewed by external auditors to ensure quality.

How do I recalculate my base year?

How does it work? Step by step: identify the change, calculate its impact on the base year using the same methodology, adjust the emission figures and report the change. For example, if company A adds a subsidiary, its historical data should be retroactively included in the base year. If the subsidiary did not exist at the time, its emissions are included from the year it was established. There are also specific guidelines for mid-year acquisitions or disposals.

Recalculation affects science-based targets (SBTs) in different ways. SBTi require targets to be reviewed when recalculating base years, but not always to be changed - it depends on the type of target(absolute or intensity-based), the reason for the change and its scope. For example, if Company C acquires another company with similar emission levels, but already has a net zero target with 90% absolute reduction and 100% inventory coverage, no update is required.

To summarize: Base year recalculation is a cornerstone of serious climate reporting. It ensures that progress is honest - and strengthens the credibility of the company's climate journey.

Need help recalculating your base year? Do not hesitate to contact us for help.