Creating a climate positive world

Carbon Accounting and Your Business Footprint

Earthly Admin

Earthly Admin

May 28, 2021

Our Approach to Business Carbon Accounting

Understanding your environmental impact is the first step in your journey to reduce it. This is as true for businesses as it is for individuals. However, in most circumstances, the carbon footprint of a business or organisation will be a little more complex. This is where Earthly comes in: we have developed a carbon accounting tool to help your company calculate its carbon footprint so that you can get on with off-setting your emissions and reducing your impact.

There are two sides to this carbon footprint: the “business emissions” resulting from the running of your company, for example heating an office space or flying to a conference, and the “product emissions” which are captured via a product life cycle analysis (LCA). The Earthly Business Emissions Tool calculates greenhouse gas (GHG) emissions for the business side of your operations on an annual basis. To do this, you must collect or estimate your company’s activity data (for example, the amount of electricity used or distance travelled) and add this to a simple input spreadsheet. In our calculations we at Earthly include the seven main greenhouse gases that contribute to climate change, as covered by the Kyoto Protocol. These are, carbon dioxide (CO₂), methane (CH₄), nitrous oxide (NO), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF₆) and nitrogen trifluoride (NF₃). The carbon impact is reported in terms of carbon dioxide equivalent, or CO₂e, which is the universal unit of measurement to indicate the global warming potential of these gases. Your data is multiplied by the relevant (emission) conversion factors which give the GHG emissions in kg CO₂e for each activity. Combining these results produces a final estimate of the carbon footprint, typically reported in tonnes CO₂e.

What is Included in “Business Emissions”?

So, what sort of business activities produce greenhouse gas emissions? The answer is pretty much all of them. Some sources of GHGs are obvious, such as driving a delivery van or switching on the lights in an office, but some are not, for example, refrigerant leakage from air conditioning or cloud data storage. To understand what exactly needs to be included, the boundaries of your company’s footprint must be set. The Greenhouse Gas Protocol classifies a company’s GHG emissions into three categories or “scopes”. Scope 1 is direct emissions from sources that are owned or controlled by the company; essentially fuels that are directly burned on the premises (for example emissions from a manufacturing plant or a lorry). Scope 2 is indirect emissions resulting from the generation of purchased electricity. Finally, Scope 3 captures all other indirect emissions including activities such as business travel and employee commuting as well as purchases ranging from laptops and fridges to stationary and snacks. In effect, Scope 3 is a sort of second hand emission category and, for companies that are required by law to report their emissions, Scope 3 is voluntary.  However, for small or more service-based companies Scope 3 is typically the largest emissions category and for this reason Earthly includes Scope 3 in all business emissions calculations. 

Our Carbon Accounting Standards

The Earthly Business Emissions Tool follows the guidance of the GHG Protocol and ISO 14064-1:2018 (the international standard relating to greenhouse gas inventories and measuring carbon footprints) and is constantly evolving to stay up to date with the latest science. In order to stay consistent with other forms of environmental reporting Earthly makes use of the official UK emissions factors published by DEFRA each year. We also use the UK GHG consumption-based accounts data to understand the carbon impact of procurement. For any areas where you may not have the systems in place to collect the activity data for your company Earthly will use national averages based on the latest studies. 

What Happens Next?

Once Earthly has calculated your company’s total business emissions we will work with you to “reduce and remove” this environmental impact. Your business emissions report will identify carbon hotspots and potential reduction pathways. We can also connect you with expert consultants who will help your company or organisation to reduce carbon emissions. While you are working to become a greener and more sustainable business we believe that it is important to remove the impact you are having on the planet right now. This can be done by investing in one of our nature-based solutions, choosing the project that is right for your business.

Environmental reporting has many grey areas so it is important to be as transparent as possible about the calculations process and organisational boundaries. Your company must be careful not to double count activities such as transportation that appear under different scopes. It is equally important not to underestimate your climate impact. Therefore, Earthly asks all organisations to off-set at least 110% of their emissions so you can be confident that you are restoring nature and becoming climate positive.

To find out more please take a look at the rest of the Earthly Blog, or check out our products to see what actionable changes you can make.

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