Carbon Footprint Assessment and Calculation for Business

Carbon emissions are greenhouse gases (GHGs) released into the atmosphere, primarily from burning fossil fuels, industrial processes, and deforestation. These emissions drive climate change, making reducing them a global priority.

The UK government has committed to achieving net zero emissions by 2050, meaning the amount of GHGs produced will equal the amount removed from the atmosphere. Businesses play a critical role in this transition by measuring, reducing, and offsetting their carbon footprints.

Carbon Footprint Assessment

A carbon footprint quantifies the total GHG emissions caused directly and indirectly by a business. It is categorised into three scopes:

  • Scope 1: Direct emissions from owned/controlled sources (e.g., company vehicles, on-site fuel combustion).
  • Scope 2: Indirect emissions from purchased energy (e.g., electricity, heat, or steam used by the business).
  • Scope 3: All other indirect emissions across the value chain (e.g., business travel, waste, supply chain, product use).

Why Scope 3 Matters: Often the largest and hardest to measure, Scope 3 — indirect greenhouse gas (GHG) - emissions account for ~70% of a typical business’s footprint. Scope 3 emissions across a business’s value chain—are often overlooked but represent the largest and most impactful portion of a business’s carbon footprint. For UK businesses aiming to achieve net zero, understanding and addressing Scope 3 is not optional; it’s essential.

carbon emission scope and footprint

Methodology for Calculating Carbon Footprints

  • Data Collection: The first step is to gather pertinent activity data that reflects your business consumption patterns and lifestyle choices. This includes detailed records of fuel usage, electricity bills, and travel itineraries, which provide a comprehensive overview of your business energy consumption and travel habits.
  • Emission Factors: Once compiled this data, the next phase involves applying emission factors published by authoritative sources, such as the UK Department for Environment, Food & Rural Affairs (DEFRA). These factors are essential for converting your business activity data into carbon dioxide equivalents (CO2e), allowing for a standardised measurement of your business emissions.
  • Scope Allocation: It is important to categorise the emissions into three specific scopes: Scope 1, which covers direct emissions from owned or controlled sources; Scope 2, which includes indirect emissions from the generation of purchased electricity; and Scope 3, which encompasses all other indirect emissions that occur in your business value chain.
  • Aggregation: Finally, by summing the emissions from all three scopes, it can arrive at a comprehensive total of business carbon footprint, providing a clear picture of your business environmental impact.

Here are some Government-Recommended Practices. The businesses should adhere to the Greenhouse Gas (GHG) Protocol, the global standard for corporate greenhouse gas emissions accounting. This protocol offers a framework for measuring, managing, and reporting emissions, ensuring transparency and accountability. Additionally, organisations are encouraged to follow the UK’s Environmental Reporting Guidelines, which enhance consistency and clarity in environmental reporting, allowing businesses to effectively convey their sustainability efforts to stakeholders. Moreover, utilising the Streamlined Energy and Carbon Reporting (SECR) framework is recommended for public reporting. SECR simplifies the reporting of energy use and carbon emissions, helping companies disclose their environmental performance in a structured way, thereby boosting credibility and trust with the public and investors.

Steps for Businesses to Achieve Net Zero

Achieving net zero requires a structured, science-backed approach. Below is a detailed breakdown of the process for UK businesses:

  1. Measure – Conduct a Comprehensive Carbon Audit: The objective of the outlined process is to quantify emissions across all three scopes: Scope 1, Scope 2, and Scope 3. To begin, organisations must define their boundaries, determining whether to include subsidiaries, joint ventures, or franchises in their emissions calculations.

    Data collection is essential, with specific activities categorized under each scope. Scope 1 encompasses direct emissions from fuel consumption, refrigerant leaks, and company-owned vehicles. Scope 2 includes indirect emissions from purchased electricity, heat, or steam, which can be tracked through utility bills or supplier data. Scope 3 is the most complex, covering emissions from suppliers, business travel, employee commuting, waste management, and the lifecycle impacts of products sold, including customer usage.

    To convert the gathered activity data into carbon dioxide equivalent (CO2e), organisations should apply emission factors using tools recommended by the UK government, such as DEFRA’s GHG Conversion Factors. For Scope 3 emissions, it is advisable to utilise industry-specific databases like Ecoinvent or conduct supplier surveys for accurate data.
  2. Reduce – Set Science-Based Targets and Implement Reductions: The strategic framework established by the Science Based Targets initiative (SBTi) guides businesses in setting emissions reduction targets, advocating for a 50% reduction by 2030 and achieving net zero by 2050. For Scope 1 emissions, the emphasis is on transitioning to electric or hydrogen vehicles and improving energy efficiency through building retrofits, such as insulation and LED lighting. To address Scope 2 emissions, organizations are encouraged to adopt 100% renewable electricity via Power Purchase Agreements (PPAs) or REGO-certified tariffs. For Scope 3 emissions, strategies include engaging suppliers to disclose their emissions through platforms like CDP Supply Chain and redesigning products for circularity by utilizing recyclable materials and extending product lifespans. Additionally, businesses are advised to reduce travel by prioritizing virtual meetings and rail travel over flights. These strategies collectively form a comprehensive approach to minimizing carbon footprints across all emission scopes.

    Scope 3 emissions strategies involve engaging suppliers to disclose their emissions through platforms like CDP Supply Chain, redesigning products to promote circularity by using recyclable materials and extending product lifespans, and reducing business travel by favouring virtual meetings and rail travel over flights. These strategies collectively aim to create a comprehensive framework for reducing carbon footprints across all scopes of emissions.
    3. net zero carbon emission
  3. Offset – Invest in High-Quality Carbon Removal: We outline two carbon management approaches: offsetting and insetting. Offsetting supports external projects that reduce carbon emissions, such as reforestation, while insetting funds emission reductions within a company's value chain, like regenerative agriculture with suppliers. It is vital to prioritise projects that actively remove carbon, such as bio-char and afforestation, over those that merely avoid emissions, like renewable energy credits. Employing credible frameworks, such as the Woodland Carbon Code or the Gold Standard, ensures project integrity. To avoid greenwashing, offsets must be additional, permanent, and verified by third parties, and companies should transparently disclose their offsetting practices in sustainability reports to uphold accountability and trust.
  4. Report – Disclose Progress Transparently: It's essential requirements and recommendations for businesses concerning sustainability reporting and internal communication. Companies with a turnover over £36 million must comply with the Streamlined Energy and Carbon Reporting (SECR) framework and align risk reporting with the Task Force on Climate-related Financial Disclosures (TCFD). For voluntary reporting, businesses are encouraged to produce annual sustainability reports following the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB) guidelines, and to engage with the Carbon Disclosure Project (CDP) for investor-grade disclosures. Internally, it is crucial for companies to educate employees on net zero objectives and to publicly share progress milestones through various channels, including websites and social media, to foster transparency and engagement.
  5. Sustain and Innovate – Embed Net Zero into Business Strategy: We present essential strategies for improving governance, innovation, and policy advocacy to achieve net zero emissions. It underscores the need for a dedicated Sustainability Officer or team to oversee net zero initiatives and recommends integrating climate goals into executive compensation and board discussions to ensure accountability. In terms of innovation, it stresses the importance of investing in research and development for low-carbon technologies, such as carbon capture and green hydrogen, while promoting collaboration among industry peers through platforms like the UK Business Climate Hub. For policy advocacy, it encourages support for government initiatives that promote decarbonisation, including carbon pricing and green subsidies, and suggests joining business coalitions like the Climate Group’s RE100 to commit to 100% renewable energy.

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Curious about your business environmental impact? Please contact us today at infoatrotextechnologies.com for a complimentary carbon footprint assessment, turning sustainability into your next big opportunity!