Brighter business / A beginner’s guide to carbon reporting

A beginner’s guide to carbon reporting

17th February 2021

Carbon emissions reporting helps businesses to record their sustainability efforts and forms a key part of any Corporate Social Responsibility (CSR) or Environmental & Social Governance (ESG) policy.

The Greenhouse Gas (GHG) Protocol is the internationally recognised standard for carbon emissions reporting, used by governments and organisations of all sizes all around the world.

Sustainability is an increasingly important element of a business strategy. Before you can get started with carbon emissions reporting, you’ll need to understand what it involves.

Getting to grips with your carbon footprint

Your carbon footprint is the sum total of the carbon emitted as a result of your business activities, and key to understanding your carbon footprint is in knowing what contributes to it.

First of all, you need to look at your whole organisation and the different activities across your operations. If an activity is associated with greenhouse gas emissions, you’ll need to include it in your reporting.

This can seem daunting at first. Take your time and be methodical. By thinking carefully about each aspect of your business, you should be able to roughly work out what’s feeding in to your carbon footprint.

Once you’ve looked at your business as a whole and identified where your carbon emissions are coming from, you can work out which Scope they sit under.

Understanding the Scopes

Carbon emissions reporting talks about “scopes” - Scopes 1,2, and 3. These are the different levels of emissions which are related to your business, and where they come from.

Scope 1 emissions are all direct emissions. This means those emissions which arise as a direct result of your activity. For example, fuel used on site and for company vehicles. This also includes “fugitive emissions”, such as leakage from air conditioning equipment.

Scope 2 emissions are indirect, related specifically to purchased electricity, heat, and steam power. This accounts for all emissions related to the generation and transmission of the electricity you’ve bought.

Good news for Opus Energy customers: our electricity is 100% renewable as standard, so you can report 0g CO2e under your Scope 2 emissions. Find out more about our energy here.

Visit the GHG Protocol website directly for guidance on Scope 2 emissions.

Scope 3 emissions are all other indirect emissions. This can get complicated, as it’s an extensive list: purchased goods and services, business travel, employee commuting, and waste disposal.

Anything that you don’t control directly, such as emissions from your supply chain, needs to be accounted for here. You can find out more about calculating Scope 3 emissions directly from the GHG Protocol website.

Beginners guide to carbon reporting - Opus Energy

Once your emissions have been categorised into their respective scopes, you can work out your overall emissions and how to reduce them.

When it comes to reporting, the GHG Protocol is the internationally recognised standard. However, you may prefer to find a different framework.

The government published an updated report in 2019 with full, detailed steps on carbon reporting for businesses, including those that are accounting and reporting their carbon emissions for the first time.

There’s advice on how to measure, how to report, how to set a baseline year (against which you measure your future reductions or increases), and on which key performance indicators (KPIs) can help you to measure your progress.

You can find the GOV.UK report here.

Why should I be reporting my carbon emissions?

For businesses of a certain size, carbon reporting is a legal requirement (made law by the Companies Act 2006).

If your business uses more than 40,000 kWh of energy in a given reporting period (which runs from 1st April - 31st March), you’re required by law to include information around energy and carbon in annual reports.

Below this volume, there’s no mandatory requirement for business carbon reporting, but you can choose to report voluntarily. You can find out more information in the above GOV.UK report on how to report voluntarily.

According to our research, businesses are more aware than ever of the importance of sustainability. Measuring your carbon emissions is an important step in understanding your environmental impact.

Carbon reporting is, by its nature, a complex undertaking. It can be difficult to know where to start. You may want to find a service provider who can help you to understand the process and its outcomes.

Advice on carbon emissions reporting is available on the GOV.UK website. You can find out more about the Greenhouse Gas Protocol here.

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