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Guide to Business Carbon Footprints

GoCardless
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Last editedDec 20212 min read

When growing a successful business, it’s important to look beyond profits and productivity and examine the wider impact that your company has. Climate change is a growing concern across all sectors, so everyone should be aware of their carbon footprint and the steps that they can take to reduce this when possible.

A business’ carbon footprint is a measure of the carbon dioxide that is produced through all operations. Having an idea of where you are producing carbon dioxide is a great way to build a more sustainable business, as it gives you an idea of areas where you can cut down or modify the way your business works. Keep reading to find out more about how to define carbon footprint in business and what you can do to minimise this.

Define carbon footprint in business

A carbon footprint for business refers to the amount of carbon dioxide that is produced by business operations, both directly and indirectly. For example, this could include the amount of carbon dioxide that is released through manufacturing of a product, or perhaps through delivery and logistics. This makes calculating a carbon footprint for business a long and complicated process, since there are many different elements to consider.

However, just like with other measures of business performance such as financial statement analysis, this can be separated into different areas. Rather than attempting to do an exhaustive carbon footprint calculation at one time, it’s usually a better idea to examine different areas of the business individually to break this down into a more manageable process.

How to calculate carbon footprint in business

To calculate carbon footprint in business, there are a few essential stages. First of all, you should decide on the boundaries of your footprint calculation, and in order to do this you should understand what is meant by scopes of carbon emissions. These can be divided into scope 1 (direct emissions) and scope 2 and 3 (indirect emissions).

Scope 1 emissions are any carbon emissions that are directly related to activities involving company-owned resources. This will include fuel combustion, transportation, fugitive emissions (any leaks of greenhouse gases, such as those from refrigeration), and any process emissions caused by manufacturing.

Scope 2 emissions cover any carbon emissions created by purchased energy, such as from a utility company. Scope 3 emissions are somewhat more complex, including indirect emissions caused by activities such as business travel (e.g. employees commuting to work), investments and gases caused by decomposition of waste.

To decide on the boundaries of your carbon footprint, you should research these scopes more carefully and decide which you will include in your calculation. Once you have done this, you need to go about collecting the various data so that you can put these into a business carbon footprint calculator. 

Consider using the GoCardless greenhouse gas calculator, which has been specifically built for small businesses. Based on the GHG Protocol, our business carbon footprint calculator can measure your emissions across scope 1 (emissions from owned/operated assets, like vehicles), 2 (emissions from purchased energy) and 3 (emissions from everything else, i.e., distributors, suppliers, product use, etc.), giving you all the information you need to measure your business’s climate impact and identify areas for reduction. 

How to reduce your carbon footprint

Once you have a measure of your carbon footprint, it’s important to incorporate this information into your business model. It’s no good simply using a business carbon footprint calculator and then not adapting your business to improve this.

First of all, you should identify any areas in which your emissions are higher than they should be. Consider if there are any ways that you can cut these down, such as by using renewable energy sources or by recycling waste materials for production processes. You can get creative here – for example, you might support your employees to buy bikes so that they don’t have to drive to work.

Some forms of carbon emissions are unavoidable, so in this case you can consider offsetting your emissions. This means that you can invest money in a project that offers equivalent carbon dioxide savings elsewhere, such as through reforestation projects.

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