What we’re talking about

A company’s carbon footprint is the quantity of greenhouse gas (GHG) emissions that were produced as a result of its operations. Carbon footprints are usually measured in terms of an annual footprint that takes into account the impact of all the company’s key activities over the course of a calendar year, but it’s increasingly common for manufacturing companies to communicate their footprint on a per-product basis. 

Whatever the frame for measurement, the unit for a carbon footprint is tonnes (that’s metric tonnes) of carbon dioxide equivalent (CO2e). Carbon dioxide is the most common GHG emitted by human activities, but the CO2e unit handily takes into account all other GHGs (like methane and nitrous oxide) as well, by putting them in terms of carbon dioxide.

Carbon footprinting and emissions accounting is fairly standard practice at large corporations and is usually handled by a specialist consultancy. However, it’s possible to get to a reasonably accurate number in-house using online tools and a spreadsheet. That number will allow you to identify the most emissions-intensive areas of your business and opportunities for reductions, and buy enough offsets to cover your footprint.

Why it’s important

We hardly need to reiterate the critical state of the climate crisis and the role we all have in combating it. Calculating your company’s carbon footprint is a necessary step to understanding your company’s contribution to global warming so you can identify ways to reduce it. Plus, consumers are increasingly interested in transparency around the environmental impacts of the brands they buy from and products they use — a 2019 YouGov Survey of more than 9,000 consumers around the world found that two-thirds (67%) of consumers support the idea of a recognisable label to demonstrate that products have been made with a commitment to measuring, and reducing, their carbon footprint.

Things to note

You probably don’t need to worry about ‘scopes’. The Greenhouse Gas Protocol (GHG Protocol) is one of the most widely used emissions reporting standards – it requires companies to break down their emissions into three categories, or scopes. Scope 1 emissions are those produced on a company’s site or directly by vehicles or power sources it owns; scope 2 emissions are those resulting from electricity purchased by the company; and scope 3 emissions are those occurring as a result of its activities but from sources a company does not own or control. While you can organise your footprint into these brackets as well, you don’t need to unless you’re trying to report against the GHG Protocol specifically. What’s more important is that your calculation captures the largest and most relevant emissions sources for your business.

Your carbon footprint only covers part of your company’s environmental footprint. As the name suggests, a carbon footprint is all about your carbon (and other GHG) emissions. It isn’t a measure of your use of natural resources, or the waste your company produces – though those might affect the calculation’s results. If you want a more holistic overview of your environmental impact, consider commissioning a life cycle assessment, which looks at things like land use, water use and acidification, as well as GHGs. But even though it doesn’t consider everything, for a company at the beginning of its sustainability journey, a carbon footprint is a good place to start.

Once you calculate your company’s carbon footprint, you should do something with the information. The real win would be achieving reductions in your absolute total footprint, which means getting total emissions down even as your business grows. The next best thing is finding ways to reduce emissions relative to output, so bringing down your emissions per product, per employee, or per some unit of revenue. Finally, if there is no room to reduce, you can offset your emissions. Offsetting means investing in projects to an extent that enables them to capture the same amount of CO2e that your business is responsible for emitting.

How to calculate (and offset) your company’s carbon footprint

1. Identify the material sources of emissions. Burning fossil fuels is the main source of human-produced carbon dioxide emissions. So, start by thinking about all the ways your business uses electricity and fuel. That could be to power your offices, shops and facilities; to run vehicles used for transporting goods and the machines used to make them; or to run the servers hosting your platform or website. Also consider raw materials extraction processes at the start of any of your supply chains.

2. Collect data on quantities. Once you’ve thought about all the key places your business uses energy, you need to quantify the amount of energy that was used. So, collect any electricity and gas bills, add up the miles your team and products have travelled (along with the modes of transport) and work out the total quantities and weights of products produced, broken down by key component materials. Organise all this information in a spreadsheet and make sure to carefully note the units of quantities.

3. Calculate a footprint. Now it’s time to take all the data you’ve collected and convert it into carbon emissions. A specialist sustainability consultant will likely have access to detailed databases with highly-specific data that could lead to a more accurate calculation but you can work out ballpark figures in-house.

For those comfortable working with data, look for reputable sources of emissions factors (eg, Defra for transport, electricity and waste in the UK; the EPA for the same in the US; and the Higg MSI for emissions factors for materials) and apply them to the quantity information you collected. For those who don’t like dealing with spreadsheets, there are lots of online calculators that can do the converting for you. If your business deals with physical products, try the 2030 Calculator. If your footprint is focused more on transport and office operations than manufacturing, this calculator would be more suitable. And, if you want to calculate the footprint of your website, this is a simple but accurate tool. 

4. Look for potential reduction opportunities. Once you have your footprint, delve into the results to identify disproportionate emissions sources and think about where there might be opportunities to reduce your footprint. For companies working with physical products, the way you freight your goods can make a huge difference to your footprint. For a business operating a lot of spaces, bringing energy use down is probably the way to go. And, if your main source of emissions is a website that lots of people visit, some small tweaks to the site design can increase its energy efficiency and reduce its carbon footprint.

5. Buy offsets. No matter how many reductions you secure, it's unlikely that you’ll be able to reduce your carbon footprint to zero while still operating a business. So, offsets should play a role in your carbon strategy. Critics of offsets often point out that offsets (which are cheap and readily available) absolve organisations of environmental guilt without forcing any serious changes to their business. However, as long as you are thinking about reductions first, offsetting your footprint is better than not offsetting your footprint. One offset is equal to reducing one tonne of carbon emissions, so calculate the number you need to buy and then purchase them from a reputable provider like Carbonfund.org, Gold Standard or NativeEnergy. Prices range from $3 to $15 per offset depending on the project you want to support.

6. Establish a process. Once you’ve completed your first calculation, congratulate yourself! And then make sure you set up a process to make it easier to do it again next year, or when you launch a new product. Note the key inputs for your calculation and things you have left out, so you know the limitations of your model, and establish a framework so you’re processing data in a similar fashion each time so comparisons between measurements are apples to apples.

Key takeaways

• Calculating a carbon footprint is a great first step for a business of any size looking to understand its environmental impact, though it focuses on GHG emissions and doesn’t fully capture effects on natural resource consumption, land use or waste.

• Though reporting frameworks exist, the most important thing is that all material areas of your business are accounted for. What these are will depend on your size, industry and how you are set up.

• The calculation is not the end goal, but rather the means to achieving a reduction in your footprint – first through changes in your operations and then through reductions.

• Carbon responsibility shouldn’t just stop with your internal assessment. Encourage your suppliers to calculate their footprints too and consider including their policies around carbon in any tender process you run.

Learn more

To understand the emissions impact of everything from baths and rice production to volcanoes, pick up How Bad Are Bananas?: The Carbon Footprint of Everything by Mike Berners-Lee.

To go beyond your business footprint and reduce your personal carbon footprint, explore this guide to key lifestyle considerations from the New York Times.

To find emissions factors that can help you conduct a carbon footprint calculation, check out Defra for transport, electricity and waste in the UK; the EPA for the same in the US; and the Higg MSI for materials.

To calculate your carbon footprint without complicated spreadsheets, use an online calculator: the 2030 Calculator for product footprints; ClimateCare for businesses with footprints more focused on transport and office operations; and the Website Carbon Calculator for websites.

To help you contextualise the result of your carbon footprint, use this calculator from the EPA to see what it is equivalent to in everyday terms, like the number of cars driven, smartphones charged or homes powered.

For a look at how one major company chose to offset its carbon footprint, read this story about Apple’s protection of mangrove forests in Colombia.

For some actionable advice on reducing your digital footprint, check out this list of 17 ways to make your website more energy efficient.