Maximise Your Impact: A Practical Guide to Carbon Accounting
Carbon accounting is becoming increasingly important but for SMEs, it can be overwhelming. This guide breaks down key concepts and provides practical tips for getting started.
March 2024
What is Carbon Accounting?
Carbon accounting is all about estimating, keeping track of, and sharing the amount of gases that can warm the planet (like carbon dioxide) released or captured due to an organisation's actions.
One major method is the Greenhouse Gas Protocol, often called the GHG Protocol. It categorises emissions into three main areas: emissions from the company's own activities (Scope 1), emissions from the energy the company uses (Scope 2), and emissions related to making, using, and getting rid of the company's products or services (Scope 3).
For small to medium-sized businesses, using the GHG Protocol is an excellent first step. It offers solid methods to identify which activities produce the most carbon emissions. With this knowledge, these businesses can make smart choices about how to decrease their carbon emissions.
The Six Steps to a Carbon Report
A practical roadmap for SMEs to measure and report their carbon footprint.
Decide on your focus
Think about the main activities in your business that produce carbon emissions, like using electricity, driving vehicles, or making products. You don't have to tackle everything at once; just start with the big stuff.
Tip: What are the biggest activities in your business that use energy or create waste? Map them out in a flow chart.
Talk to your team and suppliers
Get your team excited about making changes and talk to the companies you buy from. Find out from them what types of data are available, be that spend, usage, or supplier-specific data.
Tip: Check where you spend the most money to find key suppliers and areas of focus. Talking to the person in charge of your bills can point you in the right direction.
Collect your information
Start keeping track of how much energy you use, how much you travel, and any other details that relate to your main activities. You can do this by looking at bills, receipts, or records of purchases.
Tip: Create a simple spreadsheet to write down your energy use, like electricity and fuel, and other materials you need for your business.
Calculate your emissions
Start converting the gathered data into carbon dioxide equivalent emissions using established conversion factors. The UK Government provides these for free at BEIS. Resources like online calculators or software can also make this step more manageable.
Tip: Visit accountingcarbon.com for a free curated directory of the top available carbon calculators and software providers.
Prepare a report
Reporting involves compiling the calculated emissions into a concise format useful for decision-making. For small businesses, reports should highlight key areas for emission reductions.
Tip: The GHG Protocol website provides a free downloadable template for carbon reporting.
Verify and audit your report
Verification by an independent third party adds credibility to your carbon reporting. While this is optional, SMEs aiming for certifications or looking to participate in competitive tenders may find it beneficial.
Tip: Mistakes most commonly occur in using emissions factors from the wrong years or using inconsistent units.
What are the different methods?
Based on the information available, there are several recommended methods. The general rule is to always use the highest quality data source available.
Sustainability reporting FAQs
The questions UK SMEs ask us most often when turning carbon data into a defensible sustainability report.
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Read articleReady to start your carbon accounting journey?
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