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Ambitious carbon reduction targets increasingly feature in business strategies.
The combination of increasing carbon disclosure regulations, with growth opportunities around employee engagement, and customer loyalty, mean it’s more important than ever to manage your greenhouse gas (GHG) emissions.
To learn more, check out our article on the benefits of greener business.
But how do you do it? Keep reading to find out how to measure your company carbon footprint.
What is a carbon footprint?
First you need to understand your carbon footprint.
A carbon footprint is the amount of GHGs produced by an organisation, individual or product. As a business, your carbon footprint is defined as your environmental impact resulting from operational activity.
Your impact may be direct, where GHG derive from a source you own or control, or indirect, if emissions result from another entity due to your operations. Your company carbon footprint covers all the emissions in your supply chain, logistics, in upstream operations, and in downstream product usage.
A carbon footprint accounts for the GHG produced by your operations over a year and is measured in units of kg or tonnes of CO2e. CO2e stands for ‘carbon dioxide equivalent’, accounting for the 6 greenhouse gases listed under the Kyoto Protocol. It combines and weights each gas according to its global warming potential, converting it to a single unit.
Why should you measure your carbon footprint?
In the Government Business Insights and Conditions Survey, 46% of businesses reported that they are not taking action to reduce their carbon emissions. Which is concerning as all businesses must act, to achieve UK Net Zero targets.
Measuring your company carbon footprint allows you to meet legislative requirements like SECR.
For help with SECR and to find out if it applies to your business, check out our free downloadable guide.
Calculating your carbon footprint is the first step to understanding your operation’s emission hotspots. You can then find ways to reduce your impact and consider alternative products and services in your value chain. Once you’ve measured an initial or baseline carbon footprint, you can communicate with relevant stakeholders, including employees, customers, and investors, as you track progress.
How do you calculate your carbon footprint?
The logic for measuring your carbon footprint is surprisingly simple. You can calculate your carbon footprint like this:
(Activity & Consumption data) x emissions factor associated with that activity = x kg CO2e
For example, a manufacturing site uses 150,000 litres of gas (LPG) throughout 2021. The emission factor associated with LPG, published by DEFRA, is 1.56:
150,000 litres x 1.56 = 233,564 kg CO2e
You now know that heating and running the manufacturing site contributes 233,564 kg CO2e to your company’s carbon footprint.
Another way is to calculate your carbon footprint using financial data. You can convert the total spent on products and services into CO2e using spend-based emission factors, with a calculation similar to the above, only the activity data is measured in £ spent.
Which method do I use to measure my carbon footprint?
There are several widely accepted standards for measuring carbon footprints:
- Greenhouse Gas Protocol - the most common greenhouse gas reporting standard. A comprehensive global framework providing standardised methods for calculating emissions for public and private sector organisations, value chains, and product specific footprints.
- ISO 14604-1 - an international standard for quantifying and reporting greenhouse gas emissions at the organisational level. It outlines and verifies an organisation’s footprint, allowing businesses to take part in emissions trading schemes.
Which steps can I take to measure my carbon footprint?
Based on these standards, there are three steps you can take to measure your company’s carbon footprint.
Define the organisational boundaries of your business
To determine your carbon footprint, you must define the boundary of your organisation and its operations. Your boundary is the legal composition of your company; helping to identify the emissions your company is responsible for.
There are three ways to determine your organisational boundary:
- Operational control – activities where an organisation or its subsidiaries have the authority to introduce and implement operating policies.
- Financial control – activities where an organisation or its subsidiaries have the power to direct the financial policies of an activity, and reap the economic benefits
- Equity share – this reflects the activities that are wholly or partially owned according to your organisation’s equity shares in each, you then account for the GHG emissions according to your share of equity in each activity
Once your organisational boundary is established, you can calculate the scope of direct and indirect emissions.
Collect relevant operational data
Typically, a carbon footprint includes 100% of your company’s scope 1 direct, and scope 2 and scope 3 indirect emissions. Scope 1 refers to direct emissions from owned or controlled resources, scope 2 covers indirect emissions from energy procurement, and scope 3 includes the indirect emissions of your value chain.
Existing methods tend to use activity and consumption data for scope 1 and 2. Operational data includes energy consumption (electricity, heating, and cooling), on-site combustion, gas, water, and travel by company-owned vehicles. You need to include production, and supplies in your carbon footprint calculations.
Scope 3 is more complex and likely to makes up the bulk of your emissions. The Greenhouse Gas Protocol lists 15 subcategories for scope 3, covering every transaction in your value chain. Scope 3 may use supplier specific calculations, industry assumptions or spend-based methodology inputting your financial data, in scope 3.
If you’re a small business, reporting against these scopes isn’t critical; it’s better to identify areas where your business activities emit the most.
Perform calculations using emission factors
Next, apply the relevant emissions factors to your company’s operational and financial data. You can use publicly available emission factor databases:
- DEFRA created a database for UK and international organisations
- The Greenhouse Gas Protocol website has several cross-sector calculation tools and combustion emission factors
- The International Energy Agency provides emissions by energy source, sector and industry
- The Big Climate Database has emissions factors for 500 of the most common foods
Once you’ve applied the relevant emission factor to each activity, you add the resulting CO2e volumes together to calculate your company’s carbon footprint.
Accountabl can help
Scope 3 emissions are the hardest to track, and tend to make up the majority of emissions. So, they take time to calculate.
To make it easy to track your purchase and business travel scope 3 emissions, we built accountabl, a revolutionary green expense management system.
When workers use their recycled smart cards, the accountabl app prompts them to upload a photo of their receipt. Accountabl then gets to work by instantly calculating the CO2e, empowering your workers to understand their impact and make greener decisions.
Try accountabl for free.
If you’re unsure about reporting your emissions, we offer carbon consulting, so that you don’t have to compile your operational and financial data and dig through databases to calculate it.
We can also create a Responsible Business Proposal including a scope 3 report, hotspot analysis, and give carbon reduction recommendations.
For companies who want ongoing support, we offer sustainability strategies including a carbon reduction plan, sustainability analysis for investors and clients, and carbon literacy workshops.
Book your free consultation.
