Carbon footprint accounting is the process of building an inventory, compliant with international standards, of the greenhouse gas emissions arising from an organisation's annual activities. This calculation is the source data that feeds many processes, from sustainability reporting to SBTi commitments and from CBAM compliance to CDP responses. A well-established carbon inventory is a management tool that meets multiple obligations from a single data set and is repeatable and verifiable year on year.
The Three Emission Categories
In line with the GHG Protocol and ISO 14064-1, corporate emissions are classified into three categories:
| Category | Definition | Typical Sources |
|---|---|---|
| Scope 1 | Direct emissions | Natural gas boilers, generators, company vehicles, refrigerant leakage, process emissions |
| Scope 2 | Purchased energy | Grid electricity, district heating, purchased steam |
| Scope 3 | Value chain | Purchased goods and services, logistics, business travel, employee commuting, product use, waste disposal |
Our Calculation Methodology
- Defining the organisational boundary: one of the financial control, operational control or equity share approaches is selected; this choice remains fixed for the entire reporting period.
- Setting the operational boundary: Scope 1 and 2 are mandatory, while the material categories are included under Scope 3.
- Activity data collection: facility-level fuel consumption, electricity bills, supplier data and logistics records are compiled.
- Emission factor mapping: appropriate factors are assigned from IPCC 2006, IEA, DEFRA or national inventory sources.
- Calculation and control: activity × factor products are computed, and data quality and consistency are tested through internal control.
- Independent verification: verification is carried out at a reasonable or limited assurance level by a TURKAK-accredited verifier under ISO 14064-3.
The Strategic Importance of Scope 3
Between 60 and 80 per cent of a manufacturing company's total footprint lies in Scope 3. For this reason, accurate Scope 3 calculation is a prerequisite for securing an SBTi commitment, achieving a CDP A score and providing CBAM supplier data. The GHG Protocol defines Scope 3 across 15 sub-categories; the most critical of these are usually "purchased goods and services" (Category 1) and "use of sold products" (Category 11).
A carbon footprint is not merely a report heading. It is the source data that feeds many processes such as SBTi, CBAM, EcoVadis and CDP. Once correctly established, an inventory is updated for years and supports multiple processes at the same time.
Common Mistakes
- Changing the organisational boundary from year to year (loss of comparability)
- Calculating only location-based Scope 2 and neglecting the market-based approach
- Skipping Scope 3 on the grounds of "no data"
- Failing to keep emission factors up to date
- Overlooking refrigerant (HFC) leakage (significant impact due to its high GWP)
- Public disclosure without independent verification (an issue of evidence quality)
Frequently Asked Questions
- How long does it take to prepare the first inventory?
For a single-site, medium-sized company it takes 6-8 weeks; for a large, multi-site group it takes 3-5 months. Once the process is established after the first year, annual updates are completed in 3-4 weeks.
- Is independent verification mandatory?
It is not formally mandatory, but a verified inventory is a practical necessity in many processes such as SBTi commitments, a CDP A score, CSRD/ESRS reporting and CBAM verification.
- What is the difference between carbon neutral and net zero?
Carbon neutral means offsetting emissions with voluntary carbon credits. Net zero, on the other hand, means first reducing emissions to the greatest possible extent (over 90 per cent) and then balancing the residual emissions through permanent removal methods. SBTi supports only the net-zero approach.
- How can I be sure my existing inventory has been calculated correctly?
A gap analysis carried out by an independent eye tests the methodological accuracy of the inventory. ISO 14064-3 verification readiness work identifies these gaps before the formal audit and allows them to be corrected.