How to measure your business's carbon footprint
5 min. read
Global warming is a crucial issue that affects every one of us. Research conducted by the National Oceanic and Atmospheric Administration found that the last decade had seven of the 10 hottest years on recordLink opens in a new window.
The impact of global temperature increases includes rising sea levels and disrupted weather patterns that threaten the safety and livelihood of communities and habitats around the world.
With smaller businesses estimated to account for 50% of all UK business-driven emissions according to research by the British Business BankLink opens in a new window, it's essential that smaller businesses begin the transition towards net-zero.
Reducing carbon emissions may help tackle climate change and could pay dividends with customers – a third of consumers look to buy from sustainable brands and servicesLink opens in a new window, according to research by Deloitte.
Your carbon footprint is the total amount of GHG released into the atmosphere as a result of your actions.
To measure your carbon footprint, you must examine three types of emissions which the Green House Gas Protocol (GHGP) labels 'scopes'Link opens in a new window.
There are essentially three categories of GHG emissions generated by your business's processes, actions and employee behaviours.
- Scope 1 – emissions created directly by your organisation through actions such as running heating systems and fuelling company vehicles.
- Scope 2 – indirect emissions caused by your company, such as energy bought from external sources.
- Scope 3 – indirect emissions that occur because of your business activity, such as transportation of office supplies or employees travelling to and from work.
Because scope 3 covers such a wide range of sources at such a number of different levels, it is often the largest category for businesses.
To calculate your scope 1 and scope 2 carbon footprint, you first need to gather records pertaining to energy consumption over the course of an allocated time span, usually a year.
Your records should comprise all utility bills including water, electricity, and gas as well as travel data such as plane and train tickets and fuel receipts for company vehicles.
Next you'll need to convert your records into compatible units and DEFRA offers a useful guideLink opens in a new window on how to measure and report your GHG emissions, with the key conversions listed below:
- energy such as gas and electricity is measured in kilowatt-hours – this should be on your utility bills.
- water in cubic metres and the totals should be listed on utility bills.
- car travel in kilometres - if you haven't kept track of distances travelled by car throughout the year, add together the monetary totals from all your fuel receipts and enter this amount into a fuel calculator website.
- rail or boat travel in kilometres per passenger (pkm) - this simply means that if two employees made a 1,000-mile round trip, the pkm figure for this trip would be 2,000.
- air travel in pkm is calculated in the same way as rail or boat travel.
Enter these figures into a carbon calculator such as the Carbon Trust's SME carbon footprint calculatorLink opens in a new window which reveals your total scope 1 and 2 greenhouse gas emissions in cubic tonnes of CO2e.
If you prefer to analyse your data yourself, you can use the GHG emission factors, found in the Department for Business, Energy and Industrial Strategy's conversion factors 2020 report:Link opens in a new window
- electricity – 0.233 kg of CO2e per kWh
- gas – 0.184kg of CO2e per kWh
- water – 0.149 kg of CO2e per cubic metre
- car travel – 0.16843 of CO2e per KM
- air travel – 0.18362 of CO2e per pkm
To calculate the GHG emissions associated with each activity, convert your data using this calculation:
Data x Emission Factor = Greenhouse gas emissions
You then add together the total GHG emission from each activity to reveal your carbon footprint.
Calculating your scope 3 carbon footprint is trickier.
Scope 3 emissions, however, often account for over 70% of an organisation's carbon footprint, so it's a good way to get a realistic estimate of your emissions.
The Greenhouse Gas Protocol identifies 15 categories of scope 3 emissionsLink opens in a new window, including emissions from purchased goods and services, processing of sold products and transportation of purchased fuels.
The organisation has developed the Corporate Value Chain Standard Link opens in a new windowto help businesses understand and quantify their scope 3 emissions at each level.
Businesses can either enter their data via GHGP's evaluator tool Link opens in a new windowor enlist an environmental consultancy service to calculate their scope 3 emissions.
Your organisation's complete carbon footprint is the sum of emissions from all three scopes.
Once you've calculated your business's carbon footprint, you can use this information to set targets and develop a strategy for reducing your GHG emissions.
For example, if your data shows that a high quota of scope 3 emissions comes from transporting supplies, it might be worth researching alternative suppliers within a limited radius or if your heating is a primary contributor to your scope 1 emissions, examine ways to reduce your usage, such as insulating the building.
Quantify your progress by setting targets for reductions within a specified timeframe, such as reducing your organisation's business travel emissions by 30% within 12 months.
Communicate your goals with employees and other stakeholders to highlight your company's commitment to tackling climate change.
Tracking your business's carbon footprint enables you to maintain momentum and continue to make progress in reducing emissions.
With a strategy in place, everyone in your business can move towards net zero.
Calculating your carbon footprint on a regular basis at least annually will help you scale your reductions and identify areas that need improvement.
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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.
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