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How Do You Calculate Business Carbon Emissions?

Last updated: May, 2023

When it comes to climate change, your business plays a key role in solving the crisis.

Why?

You’re constantly increasing global business carbon emissions, whether from making your products, running your office, or expecting your employees to commute.

Yet only 10% of companies measured their carbon footprints in 2022.

Are you one of them?

If yes, here’s how to join that statistic for next year and calculate your carbon footprint.

How Can Businesses Reduce Carbon Emissions and Cut Costs

Besides helping to preserve the plant for future generations, cutting your emissions has several benefits for your business.

1. Cost Savings

Implementing energy-saving measures can reduce utility bills and reduce your energy consumption, leading to lower utility bills.

Upgrading to LED lighting, improving insulation, and installing smart thermostats means you’ll reduce your greenhouse gas emissions and have more money to reinvest in your business.

According to Energy Star, high-performing energy-efficient buildings can save:

$0.60 per sq. ft. on operations and maintenance expenses annually.
$0.53 per sq. ft. on utility expenses annually.

2. Brand Value

Many consumers prefer to support brands that demonstrate a commitment to environmental stewardship.

The consumer statistics speak for themselves:

55% of consumers are willing to pay more for eco-friendly brands.
51% avoid products that they know are bad for the environment
47% avoid single-use plastic where possible

Reducing your carbon footprint translates into tangible financial benefits, such as higher customer retention rates, increased market share, and the ability to command premium prices for eco-conscious products and services.

3. Tax Incentives

Governments offer various tax incentives to encourage businesses to adopt more sustainable practices and reduce their environmental impact.

For example, in South Africa, businesses can qualify for a 95-cent reduction in taxable income for every 1kWh of energy consumption saved.

Similarly, investments in energy-efficient lighting and electric vehicles can qualify for tax deductions, lowering the taxable income for businesses.

These tax benefits reduce the upfront costs of green investments and improve the return on investment over time, making sustainability initiatives more attractive financially.

Understanding The Three Types of Emissions According to the Greenhouse Gas Protocol

The Greenhouse Gas Protocol provides standards and tools that help countries and cities track progress toward climate goals.

It categorizes emissions into three scopes for your carbon reduction plan:

Scope 1: Includes all direct emissions from your business under your control. It is everything your business burns—for example, fuel for company vehicles or gasses released from air conditioning equipment.
Scope 2: Includes all indirect emissions generated from purchased electricity. It is what your business buys to run its operations—for example, electricity, heating, and cooling emissions generated off-site.
Scope 3: Includes all other indirect emissions generated by your business. It’s usually your biggest share of the carbon footprint. It covers emissions from business travel, your supply chain, waste disposal, and the end-of-life disposal of your product.

How to Calculate Your Business Carbon Emissions

Some of the data you need to calculate your carbon footprint isn’t easy to find.

That’s okay.

For any of the emissions you’re struggling with, make a realistic estimate for the calculation process.

Step 1: Start Collecting Your Emissions Data

To begin calculating your business carbon emissions, start gathering your data.

You’ll need to collect bills and usage reports from utilities and fuel providers and information from your employees and supply chain.

Here are some things you’ll need to measure:

Electricity, natural gas, and water use.
Fuel usage from company vehicles.
Business travel (flight, rail, and road mileage).
Waste disposal (do your products or packaging end up in landfills?)
Recycling (does your office recycle, and are your products a circular economy?)

Step 2: Calculate Your Emissions

To calculate your emissions from each business activity, use an online calculator.

The Carbon Trust SME Carbon Footprint Calculator is perfect for small to medium-sized businesses and follows the GHG Protocol Guidance.

Another option is the My Climate calculator. It goes into more depth and asks for additional information on the food at the office, material waste, and mobility of your workforce.

Another tool you can use is Carbon Chain.

It is a carbon accounting tool that can help you confidently measure your emissions, set targets, and report on your progress.

Ways to Reduce Carbon Footprint for Businesses

Here are some of the key strategies to reduce your carbon footprint.

Optimize Energy Use: Upgrade to LED lighting, optimize heating and cooling systems, and invest in energy-efficient appliances.
Switch Suppliers: Prioritize using suppliers with the same commitment to achieving net zero.
Green Transportation: Incentivize your employees to use public transport, optimize your delivery routes to reduce fuel consumption, and minimize business travel.
Employee Engagement and Education: Invest in a platform like Emission Sentri to offer on-demand awareness training to your employees and keep your sustainability goals top of mind.
Carbon Offsetting: For all your unavoidable emissions, use carbon offsetting to support environmental projects like reforestation, renewable energy installations, and methane capture projects.
Carbon Consultancy: Use a carbon consultancy to help you understand where you can improve your operations

A Greener Bottom Line

Learning how to calculate your business’s carbon emissions is the first step in helping secure the sustainability of the planet and your business.

Once you have your net zero targets in mind, the next step is upskilling your workforce and building capacity to meet your goals.

Drive Emissions Reduction through Employee Engagement

Engage with your employees on your emissions reduction commitment and progress through multi-channel insights, awareness training, intelligent recommendations using Generative AI and more.