It is a truism that you can’t improve what you can’t measure. Without an objective idea of the current state and the target state, how can you know if progress has been made? Therefore, the first step (though certainly not the last) on the journey to Net Zero is to measure your company’s carbon emissions. This is often called carbon accounting. 

Why do companies measure their carbon emissions? 

Carbon accounting is a relatively new field but one which is seeing increasing attention and growing regulation. Large organisations are required to report emissions under Streamlined Energy and Carbon Reporting (SECR) regulations. Emissions reports will also be essential for those wanting to implement an environmental management system (EMS) or apply for accreditation with organisations like B Corp or the Science Based Target initiative

Smaller organisations may find they need to track their carbon to be able to sell to larger organisations that must, but may also choose to do it on ethical grounds, to improve efficiency, green their brand or prepare for future legislation in this area – and legislation is likely. 

How to start measuring carbon emissions 

The first step is to ascertain which parts of the organisation to collect data from. If you own 100% of your organisation, that’s an easy one; if not, you could apportion emissions based on equity or control.  

Next, you need to figure out where you’re going to put the data you collect. Some choose to pay for specialists to handle it for them, or use software platforms with ready-made analysis and reporting tools. Some just use a spreadsheet. If your organisation is small and has a relatively simple structure, the latter should suffice to start. 

The most common method used to measure emissions is the ISO 14064 standard: GHG Protocol. This provides both a standard and guidance on how to produce a verifiable emissions inventory. Accounting is usually done over a one-year period though can be longer or shorter depending on data collection methods. The final output figure is in tonnes of carbon dioxide equivalent (tCO2e). ‘Equivalent’ because it converts the heating potential of all other greenhouse gases into carbon dioxide for ease and clarity. Most emissions factors come in kgCO2, so you’ll need to divide by 1,000 to get tonnes. 

Identifying Scope 1, 2 and 3 emissions 

To fill your carbon inventory, you need to identify which activities release greenhouse gas emissions and source data from them. These activities will fall into scopes 1, 2 and 3. Common sources of information are receipts and expense claims, invoices and energy bills, surveys and carbon reporting information from your suppliers. If you get stuck, you can often find standard figures or commonly held assumptions online, such as Eco Act’s homeworking methodology. Just make sure to keep a record of all evidence, as well as any assumptions made. 

Once you have your data, you’ll need to multiply it by an emissions factor such as tCO2e/km. The government releases a list of these each year for use in company carbon accounting. For scope 3 emissions, you may have to look wider if you want a more specific emissions factor. Organisations such as WWF sometimes produce these, and some larger companies such as Pukka and Alpro will provide you with a figure should you ask. 

Explaining the Carbon Inventory 

Whilst there is a plethora of business carbon tracking software packages out there today, they don’t come cheap and are not usually necessary for smaller companies just starting out on their carbon accounting journey. 

The carbon inventory might seem a little daunting at first but will come to make sense in time. 

The first thing to note is that carbon emissions are organised by scope. 

  • Scope 1: these are your direct emissions from company owned or controlled sources. Examples include the natural gas that’s used to heat your buildings, the refrigerants used to cool them, and the petrol or diesel used in your company-owned fleet. You might find it helpful to have multiple entries for one emissions source to represent different locations. You’ll find the information you need on gas bills, from receipts, mileage trackers and travel or logistics teams. 
  • Scope 2: these are your indirect emissions from purchased electricity. They’ll likely be the easiest bits of data to source as your electricity supplier has to list it on your bills. If you’ve chosen to purchase 100% renewable electricity, then your market-based emissions will be 0 but you location-based emissions will be based on grid-average emissions figures. The same applies to the gas you purchase.  
  • Scope 3: these are the emissions that are a consequence of your actions, which occur at sources you don’t own or control. For almost all, this will include emissions from business travel, commuting, waste, water (supply and treatment) and electricity losses. Each of these have sub-categories according to the specific emissions factor used. For example, under commuting will fall train mileage and petrol car mileage. Other larger categories will depend on the nature of your business and value chain but could include leased assets, investments, distribution and use of sold products. 

Where you source the information from each category will vary. Some will require staff surveys, others meter readings or expense reports. Carbon accounting is not an exact science and there will be times where your best judgement is needed. So long as you evidence the assumptions you’ve made and work to improve these, you should pass muster. 

Once you have a value for each of your categories, whether in kWh, km, tonnes or another unit, you’ll need to multiply this by a relevant emissions factor. The government releases a list of these each year for use in company carbon accounting. Just add all the entries up and divide by 1000 to ensure you’re working in tonnes of CO2 equivalent, not kg. 

Carbon reporting is usually done over a one-year period, though Good Energy have found it helpful to do it monthly to allow for quicker response and reduction.