Climate change is one of the most pressing global issues of our time, and businesses have a critical role in mitigating its impact. According to the Met Office, 2023 was the second warmest year on record for the UK, with the country experiencing its hottest year since 1884. As the planet continues to heat up, the need for businesses to monitor and reduce their carbon footprint is more vital than ever.
The World Green Building Council reports that the built environment is responsible for around 39% of all global climate emissions, placing significant responsibility on contractors and the broader construction industry. Calculating your business’s carbon footprint is a critical first step toward reducing greenhouse gases (GHGs) and contributing to the global goal of halving emissions by 2030.
This guide will take you through how to calculate your business’s carbon footprint, breaking it down into manageable steps.
Why Is It Important To Calculate Your Business Carbon Footprint?
Currently, only one in ten small businesses in the UK actively measure their carbon footprint. Reducing emissions is crucial in combatting the effects of climate change, and achieving net zero by 2050 requires halving emissions by 2030. Without active participation from businesses and contractors, these goals will be nearly impossible to achieve.
Taking steps to mitigate your carbon emissions could also have numerous benefits for your business. Climate-conscious customers and partners are increasingly seeking out businesses that can demonstrate their commitment to sustainability. Therefore, demonstrating that you’re monitoring and reducing your carbon footprint could lead to a boosted reputation and stronger customer loyalty. Additionally, it can help identify inefficiencies, such as excessive energy consumption, leading to potential cost savings.
There’s also the consideration that government regulations are getting increasingly stricter, and soon, carbon footprint tracking may be more of a necessity than a choice.
Related Reading: Sustainability and Construction: What Does Sustainable Construction Mean?
Understanding The Three Scopes Of Emissions
The Greenhouse Gas Protocol categorises emissions into three distinct scopes:
Scope 1: Direct Emissions
Scope 1 emissions are the GHGs your business directly produces. This includes emissions from any physical assets your business owns or controls, such as company vehicles or onsite energy production like heating systems.
Common Scope 1 Emissions Include:
- Fuel combustion in company vehicles
- Onsite combustion of fuels for heating and cooling
- Leaking of refrigerants from air conditioning or refrigeration systems
How To Collect Data For Scope 1
Start by gathering fuel receipts for any company-owned vehicles and any other data showing direct emissions from energy production or fuel usage. The aim is to track all the energy your business uses that results in direct GHG emissions.
Scope 2: Indirect Emissions From Energy Consumption
Scope 2 emissions refer to the indirect emissions generated by the production of the energy your business purchases and consumes. For most businesses, this will primarily include electricity, gas and water.
Common Scope 2 Emissions Include:
- Purchased electricity from the grid
- Purchased gas for heating
- Purchased water for use in the workplace
How To Collect Data For Scope 2
Collect all your utility bills from the past year. This will include electricity, gas and water usage records. Once you have these data points, you’ll use emission factors to calculate the associated GHGs for each type of energy.
Scope 3: All Other Indirect Emissions
Scope 3 emissions are often the biggest category for all businesses and it includes all other indirect emissions that result from business activities. This covers the entire value chain and lifecycle of products and services used or sold by your business.
Common Scope 3 Emissions Include:
- Business travel (worker commuting, etc)
- Purchased goods and services
- Waste disposal
- Transportation of goods.
How To Collect Data For Scope 3:
Scope 3 is more challenging to quantify, and data often needs to come from third-party suppliers and partners. It’s worth looking at The GHG Protocol’s Guide On Calculating Scope 3 Emissions, as this contains a wealth of advice. Alternatively, you can hire an environmental consultant to handle these calculations for you.
Though complex, measuring scope 3 is vital because it can represent up to 90% of a business’s total carbon footprint.
How To Calculate Your Business Carbon Footprint: Step-by-Step
Now you understand the three categories of emissions, let’s take a look at how you can calculate your carbon footprint:
Step 1: Collect Energy And Travel Data (Scope 1 And 2)
Start by gathering records of your business’s energy use over the past year. These records should include:
- Electricity bills
- Gas bills
- Water usage data
- Travel records (receipts for car fuel, train and/or plane tickets).
Step 2: Use Emission Factors To Convert Data Into GHGs
To calculate your greenhouse gas (GHG) emissions, you need to use emission factors that correspond to each type of energy use or activity. These factors convert your energy and travel data into GHG emissions.
Emission factors can change annually, so it’s essential to use the most current data. For the latest DEFRA emission factors, visit the UK Government’s official site. Here, you will find up-to-date conversion factors for various activities, including:
- Electricity
- Gas
- Water
- Car travel
- Air travel.
Example Calculation:
If your company used 5,000 kWh of electricity over the past year, and assuming the current emission factor is 0.233kg CO2e per kWh (this factor is subject to change), the associated carbon emissions would be:
5,000 kWh × 0.233kg CO2e = 1,165kg CO2e.
Always refer to the latest emission factors provided by DEFRA to ensure your calculations are accurate and up-to-date.
Step 3: Sum Up Scope 1 And 2 Emissions
Once you’ve calculated the GHG emissions for all relevant activities, add them all up to reveal your business’s total scope 1 and 2 carbon footprint.
Step 4: Calculate Scope 3 Emissions
While Scope 1 and 2 emissions are directly tied to your business operations, Scope 3 emissions often account for the largest portion of a company’s overall carbon footprint. These emissions stem from indirect sources, such as your supply chain, employee commuting and waste disposal. Calculating Scope 3 emissions is challenging but critical for understanding your company’s full environmental impact. Here’s how to approach it:
- Identify the Categories: Start by reviewing your entire business operations and value chain. Scope 3 emissions often arise from activities such as purchased goods and services, employee commuting, waste disposal and transportation. The Greenhouse Gas Protocol outlines 15 categories of Scope 3 emissions, so identifying which categories apply to your business is crucial for an accurate assessment.
- Engage Suppliers: Since Scope 3 emissions frequently come from external sources like suppliers, engage with them early on. Request data on their emissions related to the goods and services they provide. Building strong relationships with suppliers not only helps you gather this essential data but also encourages sustainability across the supply chain.
- Use Estimation Tools: For businesses that may find it difficult to collect all Scope 3 data, estimation tools can be invaluable. The Greenhouse Gas Protocol offers tools, such as the Corporate Value Chain Standard, that allow you to estimate and calculate emissions across your value chain. These tools simplify the process of quantifying emissions and help you develop a more comprehensive carbon footprint assessment.
Related Reading: The Growing Importance Of Sustainability In Construction Supply Chains
Calculating your business’s carbon footprint is the first step toward reducing emissions and contributing to the fight against climate change. Whether you’re motivated by compliance, cost savings, or improving your brand reputation, regular carbon footprint calculations provide valuable insights into your business’s environmental impact.
Ready to take the next step in showing your commitment to sustainability? As a Veriforce CHAS member, you’ll demonstrate to clients and partners that your business prioritises health, safety and compliance. Join CHAS today and set your business apart in both environmental and safety standards.
