Carbon accounting

A carbon footprint measures the total greenhouse gases (GHGs) produced directly and indirectly by an organization, person, product or service.  
A business carbon footprint measures all GHG emissions related to an organization’s activities. This includes the energy used for your premises’ heating and lighting, company transport as well as industrial and commercial operations.  
According to the Greenhouse Gas Protocol, there are three types of emissions, called ‘scopes’. Scope 1 relates to emissions produced directly by your organizational operations such as heating your corporate buildings and fuelling company vehicles. Scope 2 covers emissions produced indirectly by your business, such as energy bought from external sources.  
Scope 3, meanwhile, relates to all other indirect emissions associated with a company’s upstream and downstream operations. Scope 3 typically represents the most significant contributor to a company’s carbon footprint because it includes things such as: business travel (for example, air travel); employee travel to and from work; waste generated in operations and waste disposal; purchased goods and services as well as transportation and distribution related to suppliers and customers. Find out more about Scopes 1, 2, and 3.  
A carbon footprint is expressed in terms of how much carbon dioxide (CO2) or CO2 equivalent (CO2e) is emitted in a year. This figure can be used to ascertain the different ways in which a business is contributing to climate change. It enables a means to identify ways of cutting that contribution in future. Measuring your carbon footprint regularly will allow an organization to measure its progress in reducing its carbon emissions. 
Many governments are taking steps to reduce GHG emissions through national policies. As a result, an increasing number of companies will have to be able to understand, report and manage their GHG risks if they are to ensure long-term success in a competitive business environment, and also to be prepared for any future national or regional climate policies. 

Do Organizations Have to Report their Footprint? 

In the USA, carbon footprint reporting is mandatory for businesses listed on either the New York Stock Exchange or NASDAQ. The Greenhouse Gas Reporting Programme (GHGRP) requires the reporting of GHG data and other relevant information from large GHG emission sources, fuel and industrial gas suppliers, and CO2 injection sites in the United States. About 8,000 such organizations are required to report their emissions annually, and the reported data is made available to the public in October of each year. Many other companies in the USA, UK and Europe choose to report their carbon footprint as part of their Corporate Social Responsibility strategy. 

How to Measure a Business Carbon Footprint – a Brief Guide 

Carbon footprints cover GHG emissions on an annual basis. It is important to ensure that data is collected over a consistent time period, for example if you are calculating an annual footprint then all data must be collected within the same boundaries. This is usually done in line with an organization’s financial year. 

Companies will need to gather data from a range of different sources including travel, logistics and operations to enable them to gain a full and accurate footprint measurement. Ultimately, no organization is the same and therefore they have different material emission sources. For example, a small office-based business’s energy use may be far less than that consumed by its business travel. 

Measurements should include all Scope 1 (direct) and Scope 2 (indirect) emissions, as well as all relevant Scope 3 emissions from supply and value chains. 
While it may seem daunting at the outset to try to measure your business’s carbon footprint, there are facilities available that can support your efforts. One such is the Greenhouse Gas Protocol’s suite of tools. 

After calculating its total emissions in absolute terms, a company can display this figure in relation to the size of its activities, which helps with benchmarking and when comparing year on year figures. For example, a business can display their carbon footprint as a ratio of their turnover or full-time equivalent staff in the same financial year. 

Ultimately, knowing what your carbon footprint is not only helps in efforts to reduce the negative impact the business has on the environment, it can also enable companies to save money and improve their reputation across their customer base, and attract potential new clients and investors. 

It’s not easy but it can be a win-win situation. 

For further reading, visit: