Green Economy

Before you can start your journey to net zero, it is important to understand where you are starting from. This guide explains all you need to know about carbon footprinting and how to measure this in your business.

Companies of all sizes from around the world are committing to net zero emissions – but you can’t set a target without measuring your carbon footprint first.

No matter what sector you operate in, the need to understand your carbon footprint is now a mainstay of business operations. Energy intensive and large firms across the UK are required to report on their carbon emissions, and increasing procurement processes, including those with the UK Government, require respondents to share their carbon reduction plans as part of the tendering process. As such, carbon footprinting – the process of measuring your businesses environmental impact – deserves time and attention in your business planning.

On a more practical level, measuring your carbon footprint provides many direct benefits including cost reduction, competitive advantage and company image, but you can’t manage what you don’t measure, and by collecting the data you’ll need for a carbon footprint you’ll be able to identify and prioritise where you can make the biggest improvements to the way you use energy, fuel and other resources.

What is a carbon footprint?

Put simply, it’s a measure of your contribution of greenhouse gases to the atmosphere. There are generally two types – organisational carbon footprints and product carbon footprints. This blog focuses on the former.

Although it is commonly referred to as a carbon footprint, best practice includes all the greenhouse gas emissions you emit over a 12-month period and gives you a total figure expressed in tonnes of carbon dioxide equivalent (CO2e). There are six key greenhouse gases emitted by human activities that contribute to global warming, but to make things easier we measure everything in relation to CO2 because it’s the most common.

There are many possible sources of greenhouse gas emissions from a business. To make managing them easier, we split them into three ‘scopes’.

What are scope 1, scope 2 and scope 3 emissions?

Scope 1: These are the emissions from sources you own and control and are therefore directly responsible for. For most businesses, this will be any gas heating or fuel oil you burn on-site, and the fuel you use in your company vehicles. If you use industrial refrigeration or air conditioning, refrigerant losses would also be included here, along with any emissions that may be released directly during a manufacturing process.
Scope 2: These are the emissions you indirectly produce through the energy you purchase, which for most businesses electricity, electricity used for electric vehicles and purchased heat and steam. By using electricity, you are indirectly responsible for the greenhouse gases generated at source by the energy producer.
Scope 3: There are 15 categories of emission sources that you are indirectly responsible for from sources outside your direct control which are considered scope 3 emissions. Examples of these include the goods and services you purchase, the distribution and use of your own goods and services by customers, the disposal of your waste, employee commuting or business travel, and so on.

A step-by-step guide to carbon footprinting

Decide what is in scope
For most small businesses measuring their footprint for the first time, the emissions from your heating, electricity consumption and vehicle use are a good start but the best approach for you will depend on what your major emissions sources are, which sources you have most influence over and how much data is available to you.

Carbon footprints should include scope 1 and 2 emissions as a minimum. Scope 3 emissions are more difficult to measure, so there is flexibility here in how much or little of these you include. Some of the more commonly measured scope 3 activities include emissions from waste going to landfill, water consumption and business travel.
Collect the data
Once you’ve identified all the activities you want to measure, begin collecting data for each using the unit that the emission factor requires, [BR(C1] e.g. litres of fuel or mileage for vehicles, kWh of gas or electricity from your energy bill/meter, cubic metres of water from your water bill/meter, and so on. Track them in a spreadsheet, separating them out into the different scopes.
Calculate your emissions
To calculate your footprint, source the emissions factor using the latest data and multiply your annual units by the emission factor. . [BR(C4] Choose a reporting period - this should be a 12 month period, and it can be useful to align this with your financial year but you can choose any 12 month period.
Use it to identify improvements
Once you have your carbon footprint, use the data to identify the most suitable actions to reduce your emissions and make cost savings. For example, if electricity use is by far your biggest contributor to your carbon footprint, prioritise measures that reduce your electricity use. Remember that not all activity needs to have a high initial cost and there are many no or low cost opportunities that will deliver reductions.
Set targets
Use your first carbon footprint as a baseline to set targets. The Science Based Targets initiative, which helps companies to set targets based on what climate science tells us we need to achieve, currently recommends an absolute reduction of 2.5 - 4.2% year-on-year as a minimum – although many companies are moving far faster.
Share your progress

Communicating your progress to stakeholders – both internal and external – is a great opportunity to demonstrate your commitment to improving environmental performance and tackling climate change.

We can help

Green Economy is here to help businesses on their carbon reduction journey.

Our specialist advisors can audit your business to identify the most effective efficiency measures, provide advice and support on data collection, and guide you through your carbon footprint calculation.

Get in touch

Get to grips with your footprint using our online Carbon Tool. Calculate your carbon across Scope 1, 2, and 3 and gain acurate, high quality carbon data for your business.

Use the tool.

Net Zero: What it is and why it matters to you

The UK Government was the first major economy to set a formal target to hit net zero by 2050. But what exactly does that mean, and how are we going to achieve it?

A business guide to ‘Scope 3’ emissions

What is meant by ‘Scope 3’ greenhouse gas emissions, why they are important and how can businesses begin to measure them as part of their carbon footprint?

A business guide to setting science-based climate targets

what is meant by climate change targets that are ‘science-based’, why are they important and how can businesses follow a science-based pathway in their own carbon reduction plans?