All organisations should be aware of how much their business operations are contributing to global warming.
Calculating the carbon footprint of your business is a crucial step towards understanding your direct and indirect impact on the environment. Once an organisation has calculated its greenhouse gas (GHG) emissions, a new sustainable business strategy can be designed to align with Net Zero goals.
As climate change gains more and more traction amongst environmentally conscious consumers, taking a serious interest in tackling the issue, by calculating your carbon footprint and committing your business to significant carbon reduction initiatives, can boost your organisation’s reputation and stakeholder trust.
Before you are able to report your business’ carbon footprint, you first need to know the process for calculating your organisation’s GHG emissions.
The Greenhouse Gas Protocol is the world’s most widely used carbon accounting framework, designed to help organisations measure and report their carbon footprint. GHG emissions are divided into three categories. Scope 1 is comprised of emissions from sources directly owned or controlled by the business. Scope 2 emissions are those occurring indirectly through energy usage. All other indirect emissions that occur within the organisation's value chain – both upstream and downstream - make up its scope 3 emissions. Scope 3 emissions typically account for more than 70% of most organisation’s carbon footprint. For this reason they are especially important when it comes to calculation and reporting. Unfortunately, they are also the most difficult to reliably quantify and analyse. For more information, take a look at our more detailed blog on scopes 1, 2 and 3.
Once your organisation has successfully calculated its GHG emissions, the next step is to report these emissions to all stakeholders. This is usually done through an annual report or a more bespoke sustainability strategy. The extent and quality of the footprint should be transparent. For example, if any data is estimated this should be clearly stated. The footprint should be reported alongside an emissions reduction strategy as this is one of the reporting requirements outlined by the UK government. It’s recommended that organisations use science-based targets when reducing their carbon footprint to ensure that they effectively align with international goals, which aim to limit warming to well below 2˚C. Many countries across the world have now committed to Net Zero emissions by 2050 or earlier and it's recommended that organisations of all sizes do likewise. Aiming for Carbon Neutrality in the beginning and advancing to Net Zero at a later stage may be an ambitious target but, with the right support, it is certainly achievable.
Now onto the final stage of reporting your carbon footprint – understanding how to comply with regulation …
Globally, there are many different reporting requirements depending on your location and the size of your organisation. The primary UK regulation is the Streamlined Energy and Carbon Reporting (SECR) framework, which has placed more responsibility on organisations over a prescribed size threshold to measure and disclose their emissions. SECR is mandatory. It was introduced to encourage the implementation of energy efficiency measures and support organisations in the process of cutting carbon emissions. It’s important to note that the reporting requirements differ depending on the size of your organisation.