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How to calculate your carbon footprint
How to calculate your carbon footprint
Calculating a carbon footprint for your business can help you accurately track and report your progress towards low carbon or net zero. This guide helps you take the first steps. Learn how to choose and collect the right data for your organisational footprint. Find out how you can reduce your footprint through carbon offsetting.
What is a carbon footprint?
A carbon footprint measures the total greenhouse gases (GHGs) produced directly or indirectly by an organisation, person, product or service.
A corporate carbon footprint measures all GHG emissions related to your business activities. This includes the energy you use for heating and lighting, company transport, and industrial and commercial processes. Some businesses also include their supply chain emissions.
The benefits of calculating your carbon footprint
Some larger organisations are legally required to report emissions. But there are several reasons why you might volunteer to publish your company’s footprint.
Doing so can help you:
- Manage GHG emissions and track your reduction over time
- Meet the targets of a corporate responsibility programme
- Ensure accurate reporting to internal and external stakeholders
The transition towards a net zero and low carbon economy is accelerating, which is rapidly increasing the focus on corporate environmental performance. More and more businesses are starting to see real value in carbon footprinting as a tool to understand, manage and reduce emissions.
Measuring different greenhouse gas emissions
While carbon dioxide (CO2) is the most common corporate GHG emission, it isn’t the only gas that has a significant impact on the environment. That's why a carbon footprint is usually expressed as carbon dioxide equivalent (CO2e).
CO2e describes the impact of various GHGs in terms of how much CO2 would have the same impact on global warming. It includes six GHGs:
- CO2
- Methane
- Nitrous oxide
- Sulphur hexafluoride
- Perfluorocarbons
- Hydrofluorocarbons
By converting all these emissions into CO2e, you can represent your overall global warming potential with a single number.
Which emissions to include in a carbon footprint
The Greenhouse Gas Protocol provides the world’s most widely used set of GHG accounting standards. It splits emissions into three categories:
- Scope 1: Direct emissions, resulting from activities that your organisation controls (like natural gas burned in the site's heating system)
- Scope 2: Indirect emissions that your business does not directly control, resulting from electricity, steam or heat purchased and used
- Scope 3: Other sources of indirect emissions beyond your organisation’s control (like purchased staff travel or purchased goods and services)
Scope 1 and Scope 2 emissions should be included in every organisational carbon footprint. But it’s up to each business to decide which (if any) Scope 3 emissions to include.
Getting started with your carbon footprint
Calculating a basic carbon footprint can be a simple task if the relevant information is easy to access. But getting the full picture of all important Scope 1 to 3 emissions is often more complex and challenging.
A common way to start is to choose a ‘baseline’ year that represents your normal operating conditions. This will help you set clear carbon reduction targets and monitor your progress over time.
The Greenhouse Gas Protocol Corporate Standard provides a standardised approach to estimating business-related GHG emissions. By following its five key principles—completeness, relevance, transparency, accuracy and consistency—you can ensure your footprint is as robust as possible.
To help ensure success, there are certain steps in the process worth closely considering, like:
- Developing an appropriate data collection strategy
- Choosing a method for calculating Scope 2 emissions
- Deciding which (if any) Scope 3 emissions to include
- Verifying and reporting the footprint
The best approach to each of these tasks depends on your business and its specific carbon footprinting goals.
Carbon footprinting: tips and best practices
One crucial early step is to collect relevant data for all emissions sources that fit into the scope of your footprint.
You can use a simple spreadsheet to record data. Energy monitoring spreadsheets can automatically calculate, collate and report your corporate CO2 emissions.
When choosing units of measurement, there are some generally accepted best practices:
- For gas and electricity, kWh units should be used. You can usually get this information from billing or direct meter readings.
- For vehicle transport emissions, actual fuel use is the best data to collect. Alternatively, mileage data can help you estimate fuel use against fuel economy projections.
- Data for other fuel (like coal, oil or liquified petroleum gas) should be collected in the most appropriate units - typically litres, tonnes or KWh.
Taking a clear, relevant inventory of emissions is a worthwhile exercise for any business. It also offers the extra benefit of helping you improve energy management.
Accurately calculating Scope 2 emissions (energy use at the site) requires an extra level of detail.
There are two main ways to calculate Scope 2 emissions:
- The location-based method, which uses the grid average emissions factor for the UK
- The market-based method, which uses specific emissions factors related to the purchased electricity
The best method depends on which type of energy source you’re measuring.
With the market-based method, electricity from low carbon or renewable sources can be calculated differently. This usually results in lower carbon emissions than the grid average factor. However, your supplier must offer robust evidence that the electricity is low or zero carbon.
The Greenhouse Gas Protocol provides detailed guidance on calculating Scope 2 emissions – including checks to assess the quality of any certificates provided by suppliers.
Typical Scope 3 emissions include (but are not limited to):
- Waste to landfill
- Water use
- Purchased goods and services
- Staff travel
When businesses decide to add Scope 3 emissions to their carbon footprint, the emissions covered often vary widely.
What you choose to include will depend on the purpose of your footprint, the availability of high-quality data and which emissions you have the power to influence. The key is to be realistic. It’s worth thinking carefully about which business activities have a meaningful indirect impact on GHG emissions.
Check the Greenhouse Gas Protocol’s Scope 3 calculation guidance for more detailed information about what you should include.
After completing the carbon footprint calculation, your business may choose to have the findings verified by a third party. This can help give stakeholders confidence in the accuracy of the methodology and findings. It’s an optional step, and it will add costs. But it will also add robustness to your footprint.
As well as this, many businesses choose to report their footprint to external stakeholders – sometimes as part of a corporate social responsibility process. Again, this is a choice for each business to make based on its unique situation.
If you do intend to disclose your footprint, it’s crucial to use a robust and transparent methodology like the Greenhouse Gas Protocol.
How carbon offsetting helps you reduce your footprint
Despite your organisation’s best efforts, some residual emissions are likely to be unavoidable. Carbon offsetting helps you compensate for these emissions by joining or funding projects that remove CO2 from the atmosphere.
In a typical offsetting scheme, your business will pay an external party to avoid or remove emissions equal to those produced by its activities. These projects focus on removal of pollutants from the atmosphere, through practices like large-scale afforestation.
However, before using offsets, it’s important to cut your own CO2 emissions as much as possible with efficiency and reduction methods.
Carbon offsetting: key principles and useful tips
If you choose to use carbon offsets, it’s crucial to have a carefully considered strategy. The best offsets follow three key guiding principles:
1. Offsets should be additional, meaning they would not have happened without the offsetting scheme.
2. Offsets should be verifiable, meaning they can be audited by an independent third party.
3. Offsets should continue indefinitely, meaning they should exist for as long as it takes to remove the CO2 from the atmosphere – which can be hundreds of years.
You can also buy carbon credits from offsetting schemes through brokers and scheme organisers. But it’s important to ensure the offset schemes reduce CO2 emissions in ways that follow these same three guiding principles.
It's best to make sure that all carbon offsetting projects are professionally certified (for instance, through the Gold Standard scheme). This gives you the peace of mind that genuine carbon reduction will take place. It can also give stakeholders more confidence in the accuracy of your footprint.
Contact us
If you’re interested in finding out more about the topic of this guide or any other aspect of making your business more sustainable, our sustainability team are here to help.