How to Measure Your Company's Carbon Footprint (Scope 1, 2 and 3)

Learning how to measure a carbon footprint for a business sounds technical and mostly is not. The arithmetic is one multiplication repeated a few hundred times: activity data times an emission factor equals kilograms of carbon dioxide equivalent. The difficulty is deciding what counts, finding the data, and knowing which published rules you are actually subject to. This is how to do it in the UK in 2026.

The method: two standards, one calculation

Two documents do the work. The GHG Protocol Corporate Standard defines the boundaries and the three scopes, and is the international default. The UK government's environmental reporting guidelines translate that into what a British company has to put in a directors' report, and the Department for Energy Security and Net Zero publishes the numbers you multiply by.

Everything else, every carbon accounting platform, every consultant's spreadsheet, is a wrapper around the same sum.

Step 1: set the boundary

Before you count anything, decide what "the company" means. Under the operational control approach, the commonest choice for UK reporters, you count emissions from every operation you have authority to introduce and implement operating policies at. Under the financial control or equity share approaches you count differently, particularly for joint ventures and leased assets.

Pick one, write it down, and use the same one every year. Most disputes about whether a footprint went up or down turn out to be disputes about a boundary that quietly moved.

Step 2: understand what falls in each scope

Scope 1, direct emissions. Fuel you burn on your own sites, fuel in vehicles you own or lease, and fugitive emissions such as refrigerant leaks from your own air conditioning. If it comes out of a pipe or an exhaust you control, it is Scope 1.

Scope 2, purchased energy. The electricity, heat, steam and cooling you buy. Report it two ways where you can: location-based, using the average grid factor, and market-based, reflecting the contracts and certificates you actually hold. A renewable tariff changes your market-based number and does not change your location-based one, which is why serious reports show both.

Scope 3, everything else. Fifteen categories covering the value chain upstream and downstream: purchased goods and services, capital goods, fuel and energy activities not already in Scopes 1 and 2, upstream and downstream transport, waste, business travel, employee commuting, leased assets, processing and use of sold products, end of life treatment, franchises and investments.

The rough proportions matter more than the taxonomy. For a professional services firm, Scope 3 is usually the overwhelming majority of the total and most of that is purchased goods and services. For a manufacturer it is often the use phase of the product. Measuring Scopes 1 and 2 perfectly while ignoring Scope 3 produces a precise answer to the wrong question.

Step 3: collect activity data

Work from records that already exist rather than surveys:

• Energy: supplier invoices or half-hourly meter data for every meter, in kWh, for the full reporting period. Estimated bills need reconciling to actual readings.
• Fuel: fuel card statements and litres purchased, not mileage claims, wherever the vehicles are yours.
• Grey fleet and business travel: expense system data, by mode and distance. Rail, air by haul length and cabin class, hotel nights by country.
• Refrigerants: the F-gas service log, which records top-ups by gas type and mass.
• Waste and water: contractor reports by tonnage and treatment route.
• Purchased goods and services: the purchase ledger by spend category, if you are starting Scope 3 spend-based.

Do not chase perfection on the first cycle. Estimate what you must, mark every estimate as an estimate, and record the assumption so next year's team can improve it rather than guess again.

Step 4: apply the DESNZ conversion factors

The government publishes a full factor set each year. Greenhouse gas reporting: conversion factors 2026 was published on 11 June 2026 and updated on 31 July 2026, and it covers fuels, electricity, transport, hotel stays, waste, water, materials and freight, with separate well-to-tank factors.

Three habits keep a footprint defensible. Use the factor set for the year you are reporting on, not the newest set. Note in your methodology statement which year and which version you used. And do not restate prior years silently when the factors change: if the recalculation moves the number, say so and explain why.

Step 5: work out what you have to disclose

Streamlined Energy and Carbon Reporting applies to quoted companies, large unquoted companies and large LLPs. The qualifying test for the unquoted route is exceeding at least two of three thresholds: turnover over 36 million pounds, balance sheet total over 18 million pounds, or more than 250 employees.

Here is the part that has caught a lot of finance teams since last year. On 6 April 2025 the general Companies Act size thresholds were uplifted, taking the large company test to 54 million pounds of turnover and a 27 million pound balance sheet. The SECR thresholds did not move with them.

The practical effect is a band of companies, roughly 36 to 54 million pounds of turnover, that can now file medium-sized accounts with reduced disclosure and still owe a full energy and carbon report in the same directors' report. If your adviser told you last spring that you had dropped out of scope, check which test they applied.

A large unquoted company or LLP has to disclose UK Scope 1 and Scope 2 emissions, total energy consumption in kWh, at least one intensity ratio, the methodology used, and a narrative on energy efficiency actions taken in the year, or an explicit statement that none were. Quoted companies report globally. Entities using 40,000 kWh or less can omit the numbers, but only if the directors' report states that they are a low energy user.

Step 6: publish something you can repeat

A footprint is only useful if next year's version is comparable. Fix the base year, record every assumption, keep the raw data, and write the recalculation policy before you need it. The most common failure in corporate carbon reporting is not a wrong number; it is a second year that cannot be compared with the first.

Measurement is also where credibility is won or lost in what you say afterwards. If you intend to make any public claim about progress, read our guide to the UK rules on greenwashing before you write the sentence, and see UK ESG reporting requirements for how SECR sits alongside everything else. More at the E-Business Ethics home page.

Frequently Asked Questions