Measure your carbon emissions
Knowing how much carbon your business produces is an important step for managing costs and moving towards net zero.
By reducing emissions, you can:
• indirectly save costs, for example, by reducing energy use
• identify inefficiencies in your operations
• prepare a Carbon Reduction Plan (CRP) that proves you are taking action
• build a positive reputation that can attract new customers and investors
• demonstrate your commitment to sustainability
Contents
- Use the GHG Protocol to measure emissions: Scopes 1, 2 and 3
- Do a basic calculation to measure your emissions
- Calculate using conversion factors
- Hire a consultant
- Set targets to reduce carbon emissions
- Get support for your carbon reduction plan
- Take action to reduce emissions
- Track and share your progress
Use the GHG Protocol to measure emissions: Scopes 1, 2 and 3
To provide a complete account of the carbon produced by your business, you need to consider emissions that are produced:
- directly from your business activities
- from energy bought and consumed by your business
- from activity of your suppliers, and activity of your customers
The Greenhouse Gas (GHG) Protocol is widely used when reporting carbon emissions to the government, suppliers, investors and others.
The Greenhouse Gas Protocol categorises emissions into scope 1, 2 and 3.
The ‘3B’s’ is a useful shorthand to remember what each scope includes: Burn, Buy, Beyond.
Scope 1 is what you burn; scope 2 is energy you buy; and scope 3 is everything beyond that.
Scope 1
Emissions produced directly from your business activities, including:
- petrol or diesel used by company vehicles
- LPG, natural gas or other fuel burned on site
- refrigerant losses
- use of land owned by business or under its operation
Scope 2
Emissions from energy bought and consumed by the company.
These include emissions from purchased electricity, cooling, heat and steam your business buys or acquires.
Scope 3
Emissions produced indirectly from your business activities.
Scope 3 emissions occur upstream (from the supply chain) and downstream (through customer use) and typically account for most of a business’s emissions.
Emissions produced indirectly from your business activities include:
- water supply and treatment
- shipping and distribution
- employee commuting and business travel
- the production of goods and provision of services you buy
- treatment and disposal of waste
- the use and end-of-life treatment of your goods and services by customers
- financial services, including emissions from pension funds and the investments made by banks holding company money
Goals for measuring scopes 1, 2 and 3
Ambitious yet achievable goals will guide your strategies and provide a clear pathway for reducing emissions over time.
You can make a pledge with the internationally recognised SME Climate Commitment.
This pledge states that enterprises will need to do their utmost to cut their greenhouse gas emissions by at least 50% before 2030, using 2019 or later as the base year.
This means that Scope 1 and Scope 2 emissions must be cut in half by 2030 at the latest. Businesses should also aim to halve their most material Scope 3 emissions by 2030.
Do a basic calculation to measure your emissions
The simplest way to get started is to collect yearly amounts of electricity use, fuel consumption and refrigerant top-ups related to your business.
Using 12 months of data allows seasonal variations to average out. It can be helpful to align the measurement period with your financial or calendar year.
To do this you will need yearly totals for:
- electricity use in kilowatt hours (kWh) from electricity bills
- natural gas in kWh or cubic metres from gas bills
- liquefied petroleum gas (LPG) in litres
- fuel used in company owned vehicles in litres from invoices and receipts or mileage from logbooks or odometers
- water use in cubic metres (m³) from water bills
- water treatment in cubic metres (m³) from water bills
- refrigerant top-ups in kilograms
- employee passenger travel from receipts – use distance calculation websites to obtain flight, rail and road distances
- tonnes of waste-to-landfill and recycled waste from waste collection provider
You can easily update and facilitate internal quality checks if you record your data usage in a spreadsheet.
Calculate using conversion factors
Scope 1 and 2
Use your data to calculate your carbon emissions.
Choose one of the free carbon calculators to calculate emissions in metric tonnes per year.
This will give you an emissions baseline as a reference point against which you can measure your greenhouse gas (GHG) emissions going forward.
The equation you need is:
Emissions = total energy consumption (fuel, electricity) x emission factors (fuel, electricity)
For the same mass of emissions, different greenhouse gases warm the atmosphere by different amounts.
Use the government-agreed conversion factors to express non-CO2 emissions in terms of an equivalent CO2 warming effect – a metric known as ‘CO2-equivalent’, or ‘CO₂e’.
Check GOV.UK for the latest conversion factor spreadsheets.
Scope 3
Scope 3 emissions are often complex and more difficult to measure.
Start with data that you have and gradually improve your methodology to increase the accuracy of scope 3 measurements.
To help decide what should be counted in Scope 3 calculations, visit GHG Protocol and download their detailed guide on measuring Scope 3 emissions.
Some strategies that contribute to effective Scope 3 emission assessment are:
1. Using standardised emission factors and conversion coefficients relevant to your specific industry to estimate scope 3 emissions. You can then compare your performance against industry averages to identify areas for improvement.
2. Carrying out a life cycle assessment (LCA) strategy to identify and address the carbon emissions at different stages of your product or service’s life.
The life cycle stages are:
- raw material extraction
- production
- transportation and storage
- product use
- end-of-life disposal
Maintaining LCAs is important as your operator customers may ask for these when they assess emissions that come from purchasing your products.
Find out how to get low carbon labels and sustainability certifications to assess the environmental impact of your product or services.
3. Using advanced data analytics and technology solutions to process large datasets and enhance the accuracy of emissions measurements.
Hire a consultant
Consider hiring a sustainability consultant if you can’t measure your carbon emissions on your own.
They can create a strategy to measure emissions in line with your business needs.
Set targets to reduce carbon emissions
A detailed inventory of your emissions is the foundation for an accurate baseline. Set targets to reduce costs and your carbon footprint.
Prioritise your emission hotspots where there are:
- the highest amounts of emissions
- the emissions with the highest value or associated costs
- emissions with an associated environmental risk, such as hazardous wastes
Focus on where you can:
- save the most money through reducing emissions
- access practical advice to make changes to reduce your emissions
- make immediate savings on no-cost and low-cost wins
Set clear Key Performance Indicators (KPIs) for measuring and tracking your company’s sustainability progress.
These KPIs should be specific, measurable, achievable, relevant, and time-bound (SMART).
Make a simple, public commitment to cut emissions with the SME Climate Commitment.
Get support for your carbon reduction plan
You will need to engage your team in your carbon reduction plan in order to:
- embed net zero strategies in your business
- ensure adequate resources
- monitor targets and follow a timeframe to reduce your scope emissions
- share progress
Find out more about how to train and involve your team.
Stakeholder engagement is also essential. You will need to collaborate with suppliers, customers, and other stakeholders to gather relevant emission information.
Take action to reduce emissions
After you have calculated your emissions, you can take action to reduce costs and your carbon footprint.
Examples of actions include:
- energy efficiency improvements
- waste reduction goals
- travel and transport emission reduction strategies
- switching to renewable energy
Develop a supply chain hot spot analysis so that you know what areas of your supply chain to prioritise engagement with.
Encourage your suppliers to:
- find lower carbon alternatives for products
- sign up to the SME Climate Commitment
This will help the supply chain as a whole become more transparent and sustainable.
Find out how to become a ‘net-zero’ ready supplier.
Track and share your progress
You will need to regularly monitor and report your emissions data against your established baseline. This will ensure accountability and help you progress towards your organisation’s emission reduction goals.
Let your stakeholders (customers, employees, suppliers, board, etc.) know about:
- your targets
- your initiatives
- how you track your progress
You might want to share your progress in an internal or publish a report on your website.
Related links
Visit Browse by theme for detailed plans on how to reduce your carbon emissions.
Visit Browse by sector for detailed guidance on how to reduce carbon in your sector and save energy.