How to measure a company's carbon footprint

What a company's carbon footprint is

A company's carbon footprint is the total greenhouse gas emissions it produces through its activity over a period, usually a year, expressed in tonnes of CO₂ equivalent (tCO₂e). CO₂ equivalent lets you add up different gases by converting each one into the amount of CO₂ that would have the same warming effect.

Measuring it is not an end in itself: it is the baseline for deciding where to cut, by how much and in what order.

The reference standard: the GHG Protocol

The most widely used standard for corporate footprints is the GHG Protocol, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). Its Corporate Standard covers the seven Kyoto Protocol gases and groups emissions into three scopes:

• Scope 1: emissions from operations the company owns or controls.
• Scope 2: emissions from generating the electricity, steam, heating or cooling the company buys and consumes.
• Scope 3: all other indirect emissions in the value chain.

For the standard in detail, see what the GHG Protocol is.

Step 1: set your organizational boundaries

First, decide which operations go into the inventory. The GHG Protocol offers two approaches to consolidating emissions:

• Equity share: the company accounts for each operation's emissions according to its ownership share.
• Control: the company accounts for 100% of the emissions from operations it controls, using either a financial or an operational control criterion.

If the company wholly owns all its operations, both approaches give the same result. What matters is choosing one and applying it consistently across the organization.

For a multi-site company, this step becomes a concrete list: which branches, stores, offices, warehouses and vehicles are in and, depending on the approach chosen, how leased properties are treated.

Step 2: identify emission sources by scope

With boundaries set, list each site's sources and assign them to a scope:

Scope 3 has 15 categories and is best tackled separately: we explain it in what scope 3 is.

Step 3: collect activity data

Activity data are the quantities that generate emissions: kWh of electricity, m³ of gas, litres of fuel, kilos of waste. In a company with many sites, the main source is each utility bill, arriving from different suppliers in different formats and periods.

This is the most time-consuming step and the one with the most errors. So it pays to:

• Record each consumption figure with its site, utility, period and unit.
• Load data periodically, not once a year.
• Keep the source of each figure (the bill or the meter reading) so it can be checked.

Step 4: apply emission factors

Each activity figure is converted into emissions with an emission factor:

emissions (tCO₂e) = activity data × emission factor

Factors should come from official or recognized sources and match the country and year of the inventory.

For electricity (scope 2), the GHG Protocol defines two methods. The location-based method uses the average factor of the grid where the energy is consumed. The market-based method uses factors from the contractual instruments the company chose, such as renewable energy certificates or direct contracts with a generator. Companies operating in markets with such instruments must report scope 2 both ways.

Step 5: consolidate and review

With all emissions calculated, add them up by site, by scope and for the whole organization. Before trusting the number, check for:

• Sites with no data or missing months.
• Sudden jumps from one period to the next, often loading or unit errors.
• Duplicates, such as the same bill loaded twice.

Step 6: set a base year and targets

To track progress over time, the GHG Protocol asks companies to choose a base year: the point of comparison for later years. If the company changes its structure significantly (through acquisitions, divestments or mergers), the base year is recalculated so that like is still compared with like.

With a measured baseline, you can set concrete reduction targets, site by site.

Common mistakes

1. Estimating instead of measuring. Using averages per square metre instead of each site's real consumption.
2. Measuring once a year. Rebuilding twelve months of bills at year-end takes weeks and leaves gaps.
3. Keeping costs and emissions apart. The same data serves to manage spending and the footprint; holding it in two places doubles the work.
4. Mixing units and periods. A two-month bill loaded as a monthly one distorts the whole year.

In CMT, each site's consumption is recorded periodically and converted into CO₂e grouped by scope. See how CMT calculates the carbon footprint or talk to a specialist.