Calculating your carbon footprint can be intimidating, so we are here to break it down into the basics – especially for small and medium-sized enterprises (SMEs). All you need is good data, and for most of our businesses, this starts with your annual usage data from your meter readings and from your fleet.
This article will you give a good overview of what is involved, with the aim of giving you the confidence to generate a basic carbon footprint for your business.
What is a Carbon Footprint?
A corporate carbon footprint describes the total greenhouse gas (GHG) emissions released by an organisation. Greenhouse gases are those gases that contribute to climate change, and the term “carbon” is often used loosely as a as a reference to carbon dioxide equivalence (CO2e). These include the main six as described in the Kyoto Protocol: Carbon Dioxide (CO2), Methane (CH4), Hydrofluorocarbons (HFCs), Nitrous Oxide (N2O), Perfluorocarbons (PFCs) and Sulphur Hexafluoride (SF6), although additional gases can be reported.
Why would my business want to know its Carbon Footprint?
Calculating your carbon footprint and producing a GHG report can have a range of benefits, including:
- Demonstrating your organisation’s commitment to climate action
- Assessing your level of environmental performance
- Comparing or “benchmarking” against other organisations
- Reducing energy and resource consumption and costs
- Improving your organisation’s reputation meeting carbon reduction targets
- Meeting your Investors in the Environment accreditation criteria!
GHG reporting is also becoming increasingly required by stakeholders including customers, shareholders, investors and regulators. Many businesses are required to report their emissions for example through the new Streamlined Energy and Carbon Reporting (SECR) requirements.
How do I calculate it?
- Define your reporting boundary – If you have a simple structure where you own 100% of the assets that you operate, it is straightforward. You would report on the impacts of everything you own and operate. Alternatively, you could define your boundary by:
- Financial control – report on all environmental impacts over which you have financial control
- Operational control – report on all environmental impacts over which you have full authority to introduce and implement operating policies
- Equity share – report in accordance with your share of equity in the operation
- Determine your period of data collection – Usually a 12-month period, either a calendar year or in line with your financial year
- Explore your key environmental impacts – Determine which emissions are caused or resources used directly by your organisation
- Measure – For each of these key emissions or resources, measure your consumption
- Report – Generally, organisations are expected to include and report on Scope 1 and 2 emissions in organisational footprints, but the inclusion of Scope 3 emissions is voluntary, although now recognised as best practice for taking action on climate change
There are three main categories to consider, including Scope 1 and 2 of which an organisation has more direct control, and Scope 3 which includes emissions associated with an organisation’s consumption of other resources.
- Scope 1 (Direct Emissions) – Release of fossil fuel, fugitive and other point source emissions of GHGs inside the organisational control boundary from combustion and other processes e.g. gas or oil used on site, fuel used in owned vehicles or fugitive leaks from HVAC or refrigerants
- Scope 2 (Indirect Emissions) – From combustion of fossil fuels to provide electricity, heat or steam used by the organisation e.g. electricity purchased
- Scope 3 (Other Indirect Emissions) – From a wide range of sources in an organisation’s value chain, but outside its boundary e.g. fuel used in non-owned transport, emissions by suppliers and customers, end of life emissions etc.
Emissions from each of these “scopes” should be reported in carbon dioxide equivalence (CO2e). This means the total global warming effect of the GHG emissions, given as the mass of CO2 that would have the same effect.
CO2e is calculated through the following equation: Activity data x emission factor = GHG emission (CO2e).
The emissions factors are updated annually and a basic conversion chart is available from DEFRA.