How to accurately measure your business’ carbon footprint

When it comes to managing your business’s carbon footprint, the first and most important step is measurement. Accurately calculating your business's greenhouse gases can help you spot emissions hotspots and identify opportunities to reduce your environmental impact. 

And it doesn't stop there—once you have measured your carbon footprint, you can set data-driven carbon reduction targets and report progress. This is especially important in today’s business environment as many larger organisations require their supply chain partners to report their emissions. But it all starts with measurement. So keep reading to find out how to accurately measure your business’s carbon footprint. 

Step 1: Understand your carbon reporting requirements 

First, you need to understand your carbon reporting requirements. Often businesses report their emsisions to meet the demands of buyers. Since different buyers have different requirements, you need to understand their expectations. For example, some might request your inventories align with the GHG Protocol—a widely recognised framework for calculating and reporting your carbon footprint. 

Step 2: Decide how to calculate your carbon emissions 

Every business is unique, and when it comes to quantifying carbon footprints, there's no one-size-fits-all method. Here are some of the common methods businesses use: 

Online calculation tools 

There are a number of tools designed to simplify carbon footprint calculations. From basic Excel sheets where data is entered manually, to carbon accounting software (like Cogo’s Business Carbon Manager) that helps you measure, understand, reduce and report your carbon footprint. 

There's a tool out there for every need and budget, but, remember that each tool comes with its own calculation methodology. So, before committing to one, make sure it aligns with your reporting requirements.

Consultancy services

Consultants can also help you calculate your business's carbon footprint. But note, these services come with a hefty price tag.

Manual calculation

For those who prefer the old-school route, manual calculations are an option. But warning: the process is labour-intensive, error-prone, and demands an in-depth understanding of reporting standards. Many companies opt for tools or consulting services to avoid these challenges. 

Step 3: Organise your data

Once you’ve decided how to calculate your carbon footprint, you need to organise your business’s activity data. 

Every activity has a carbon footprint. These activities are typically categorised into 3 ‘scopes’: 

• Scope 1 emissions are direct releases of greenhouse gases from your business’s activities, like fuel consumption from company-owned vehicles. 
• Scope 2 encompasses emissions from the energy your business purchases and consumes. 
• Scope 3 covers emissions that are not produced by the company’s immediate operations, but by activities it is indirectly responsible for in its value chain. 

Companies should aim to report at least their Scope 1 and 2 emissions. But reporting Scope 3 emissions is most valuable as this forms the bulk of a company’s carbon footprint. 

Get up to speed on scope 3 emissions in this blog. 

Choose a calculation method 

There are two main methods for calculating emissions: spend-based and activity-based. Each method has different levels of complexity, accuracy and suitability. Beginners may find the spend-based approach, which uses financial data, a good place to start. But for greater accuracy and compliance with emissions data, it is recommended that businesses supplement with activity data.

For example, if you purchased a desk for your office, the spend-based approach would only factor in that you bought a piece of furniture, and wouldn't consider whether the desk is made of plastic or wood. Whereas, the activity-based method would collect data on how many units of material that you purchased. So it would give a more accurate reading of how many emissions are associated with the action.

Cogo's Business Carbon Manager combines both spend-based and activity-based data to deliver accurate footprints aligned with GHG Protocol and major reporting standards. So we can support businesses at all stages of their footprinting journey. Find out more.

Collect your data

To calculate your emissions, you need to collect data related to each business activity. This exercise is partly driven by the data that is available.

The type of business data you collect for each activity is also influenced by the calculation method required for your reporting, e.g. if you’re adopting the GHG Protocol, certain activities might necessitate activity data over spend-based data.

You won’t always have perfect data available, but don’t let that stop you. Even rough estimates can help you identify how to reduce your environmental impact. 

Where to look for business data:

• Spend-based data can be sourced from your accounting records or bank statements.
• Physical activity data is usually found in supplier invoices or through facility managers. 

Step four: The calculation process 

Calculating emissions typically involves:

1. Linking your business data with relevant emission factors
2. Multiplying these to estimate emissions for each activity

Your emissions estimate will usually be measured in carbon dioxide equivalent (CO2e). This metric expresses the impact of greenhouse gases (GHG) in terms of the amount of CO2 that would create the same amount of warming. So that a carbon footprint consisting of different GHGs can be expressed as a single number.

You can either do this calculation manually or automatically. We’d recommend the latter because it will save you a whole lot of time. But we do work for a carbon calculation company… 

Introducing Cogo’s Business Carbon Manager 

Cogo’s Business Carbon Manager empowers businesses to measure, understand, reduce and report their carbon footprint. Our approach combining both spend-based and activity-based data ensures accurate calculations that are aligned with GHG Protocol and major reporting standards.

You can learn more about our product, here.