Best practices in carbon accounting: How to measure your corporate carbon footprint

Record numbers of companies around the world are measuring and reporting their corporate carbon footprint. 

In 2023, over 23,000 companies reported to CDP, a global voluntary disclosure project. And with the Corporate Sustainability Reporting Directive (CSRD) rolling out, nearly 50,000 companies will be disclosing their emissions annually. 

Carbon accounting, the process of measuring a company's greenhouse gas (GHG) emissions, is critical to these reporting and decarbonization efforts. A structured process and best practices tailored to your industry can help you accurately assess your corporate carbon footprint.

In this guide, we’ll provide an overview of the process of conducting your corporate carbon footprint assessment. We’ll also offer practical examples and strategies to ensure your carbon footprint report is accurate and audit-ready, with a particular focus on the logistics sector.

‍

Corporate carbon footprint measurement: steps and best practices

Carbon accounting usually aims to complete a corporate carbon footprint, which quantifies the amount of greenhouse gas emissions your organization produces, expressed in tons of CO2 equivalent (CO2e). This carbon footprint report typically includes:

• The total emissions for the organization over a specific period, in tons of CO2e
• The breakdown of emissions by Scopes 1, 2, and 3, which takes into account direct emissions caused by company-controlled sources; indirect emissions from purchased electricity, heat, and steam; and indirect emissions from the whole value chain
• Segmentation of emissions by activity, such as company vehicles and purchased electricity
• Additional filters, such as segmenting emissions by location or month

There are several key steps for setting up your carbon accounting process and preparing your carbon footprint report.

Step 1: Prepare your project plan

Before collecting data, it's essential to align on the key elements of your carbon accounting project. A well-structured project plan should include:

• High-level goals: Identifying the main objectives of your carbon accounting, such as regulatory compliance or preparation for setting corporate sustainability targets
• Base year and reporting period: Deciding the base year or reporting period for measuring emissions
• Stakeholder expectations: Understanding any expectations and needs of suppliers, partners, investors, and customers when it comes to your carbon footprint assessment
• Project timeline: Setting a clear timeline for completing the carbon footprint assessment
• Scope coverage: Understanding the scopes you will include in your carbon footprint  
• Responsibilities and resources: Assigning roles and responsibilities and outlining the resources, tools, and partners needed for the project

Aligning on these big-picture points early on will help you choose the best tools and approach for the carbon accounting process.

‍

Step 2: Set boundaries for your GHG inventory and identify material emission drivers

‍

Next, it’s important to detail and prioritize the emissions you will include in your carbon footprint.

“Begin by gaining an understanding of the company’s value chain and core operations that might be a source of CO2 and greenhouse gas emissions,” says Natalia Gemignani, Cozero Climate Success Manager. 

Mapping out the value chain will be crucial as you set the boundaries of your greenhouse gas inventory (also known as the list of all greenhouse gasses emitted by your organization) and decide which emissions you will include in your corporate carbon footprint.

Setting boundaries of your greenhouse gas inventory involves three main aspects, according to the GHG Protocol Corporate Standard: 

• Organizational boundaries: deciding which parts of the organization will be included in the inventory
• Operational boundaries: classifying your emissions into three scopes
• Geographical boundaries: establishing which locations of the organization you will include in the inventory

While the GHG Protocol is a good place to start, logistics companies should consider following ISO 14083 for value chain mapping and setting boundaries, as this standard details carbon accounting processes for transport chain operations.  

Once you are clear on your boundaries and have listed your emission sources, you can then identify the important and relevant emission drivers for your company, or your material emission drivers. These emission sources should be prioritized in your carbon accounting efforts. 

Here, consider the specific activities which drive a significant percentage of the emissions and which your company can influence. As Natalia shares, in logistics, material emission drivers might include: 

• Scope 1: Combustion of fuels
• Scope 2: Electricity consumption
• Scope 3: Purchased operating materials and logistics services

If you are subject to the CSRD and must report on ESRS 1 Climate, you will need to use the “double materiality” approach when evaluating your emission sources and follow specific requirements on boundary setting.

Regardless of your exact situation, following a systematic approach to categorizing your emission sources will lay the foundation for accurate measurement and allow you to allocate resources strategically.

‍

‍

Step 3: Understand the data types you need

‍

Once you have mapped and prioritized your emission drivers, the next step is to determine how to account for them. In this step, use the GHG Protocol or an industry-specific methodology like ISO 14083 to determine the best calculation approach and data types you need for different emission-driving activities. 

“The Greenhouse Gas Protocol and supporting tools go through all those emission drivers and define what kind of data is admissible for calculating the emissions of a specific emission driver category,” says Natalia. For example, if you are accounting for fuel consumption and electricity used by vehicles, you would collect this data in liters and kilowatt hours.

In this step, also consider if and when you will be able to obtain primary data, or first-hand emissions data from the company’s activities. Aim for primary data based on your company's and suppliers’ activities whenever possible for the best data quality. Secondary data, such as industry averages, data from published databases, and spend-based data can supplement your data, but should mainly be used to fill gaps. 

Primary data will be especially important for your material emission sources, as these sources represent areas of significant decarbonization potential.

‍

Step 4: Start collecting data

‍

Next, begin collecting the relevant data across all the emission sources you’ve identified.

This process will involve stakeholder engagement, both within your company and with suppliers. It will also require you to identify the individuals and departments with the information you need. 

The location of this data “depends very much on the company and the emission driver,” Natalia explains. For example in logistics, fuel consumption data is often managed by operational teams or fleet managers in logistics, while in other industries, the information could reside in different departments.

Natalia emphasizes that partnering with experts who understand different business types and where activity data can be found can significantly streamline the process of data collection. Additionally, using tools designed for supplier engagement can improve response rates and make data collection much easier.

‍

Step 5: Match your data with the right emissions factor to calculate emissions

‍

Once you have your data, you will need to convert this activity data into greenhouse gas emissions, or CO2 equivalent, by applying specific emission factors. This process “is a science and art in itself,” says Natalia.

Emission factors vary by source, relevance, and completeness. For example, calculating truck emissions involves separate factors for direct fuel combustion and upstream emissions from fuel extraction and refining.

Natalia highlights that applying the right emission factors is often “very challenging” for sustainability managers. It involves carefully reviewing emission factors across several databases and ensuring you’re covering all the activities in your value chain.

Following industry-specific standards like ISO 14083 helps ensure you are using appropriate emission factors for your industry. You will likely also need to source emission factors from a combination of databases, suppliers, and life cycle assessments. 

Overall, this task can be quite tedious and error-prone, since you need to document each emissions factor and verify they are up to date. Using a specialized software for this task, like Cozero’s Climate Action Platform, will save you many hours of manual work and improve accuracy. The platform includes an aggregated emission factors database, automatically matches emissions factors to your activity data, provides transparency into calculation methods, and checks for emission factor and methodology updates on your behalf.

‍

Step 6: QA your corporate carbon footprint

‍

If you follow these best practices, you will have laid the foundation for an accurate and comprehensive corporate carbon footprint. To improve data quality further, implement a robust quality assurance (QA) process for your corporate carbon footprint. 

According to Natalia, this work will mainly involve “reviewing the entire footprint from a higher-level perspective.” Companies will have different approaches and data points they use in the QA process, but there should be some kind of “central intelligence team.” She shares that this should include the sustainability manager and two or three other people to review the carbon footprint.

Your QA team should review points like:  

• Whether the raw data inputs seem plausible
• Whether emission factors cover the activity you’re trying to convert into CO2 equivalent
• The completeness of your corporate carbon footprint and whether it includes the key emission categories
• Comparative analysis with any past reports to spot anomalies

Carbon accounting tools can offer data quality assessment to automate this task and help you easily identify errors. Cozero’s Climate Action Platform comes with a Carbon Accounting Quality Report that automatically spots duplicates, empty or null entries, and outlier data.

‍

Step 7: Get your corporate carbon footprint verified by a third- party

‍

Third-party verification ensures the credibility of your carbon footprint, especially if you're reporting externally or complying with regulations like CSRD.

“We typically recommend corporate carbon footprint auditing to larger companies who are reporting externally,” Natalia says. “So you would have someone from outside check if the appropriate protocol was used, and if you as a company have made your best effort to get the best outcome possible.”

Keep in mind that auditors will need visibility into how you made calculations to assess accuracy. If you’re using a software or consultant to assist with these calculations, it’s important to choose a solution that will provide this transparency. 

‍

Step 8: Apply your learnings to your decarbonization strategy

‍

Creating an accurate and comprehensive corporate carbon footprint is a big milestone, but in many ways it’s just the beginning of your decarbonization journey. 

Once you have your complete corporate carbon footprint, you will then need to use the data to inform your decarbonization strategy, forecast emissions, set reduction targets, and identify your best decarbonization levers.

An end-to-end carbon management tool like Cozero’s Climate Action Platform can facilitate the transformation from measurement to management, making it easier to achieve your sustainability goals.

‍

Get started on your corporate carbon footprint

‍

Carbon accounting is becoming more evolved and advanced. With more companies reporting their emissions than ever before, it’s crucial to stay up to speed on best practices so you can meet stakeholder needs and keep up with competition. 

The good news is that the right software can make following these best practices much easier. 

Cozero supports enterprises in logistics, manufacturing, and other industries throughout the entire carbon accounting process, from initial planning to decarbonization efforts. To learn whether Cozero’s Climate Action Platform is the right fit for you, explore the platform.

‍

‍

Resources

‍

• CDP. 2023. “CDP 2023 Disclosure Data Factsheet.” Www.cdp.net. 2023. https://www.cdp.net/en/companies/cdp-2023-disclosure-data-factsheet.
• World Resources Institute, and World Business Council for Sustainable Development. 2004. “A Corporate Accounting and Reporting Standard the Greenhouse Gas Protocol.” https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf.
• World Resources Institute, and World Business Council for Sustainable Development,. n.d. “Calculation Tools and Guidance | GHG Protocol.” Ghgprotocol.org. Accessed October 1, 2024. https://ghgprotocol.org/calculation-tools-and-guidance#cross_sector_tools_id.
• Department for Business, Energy & Industrial Strategy. 2013. “Government Emission Conversion Factors for Greenhouse Gas Company Reporting.” GOV.UK. April 30, 2013. https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting.
• IEA. 2024. “Emissions Factors 2024.” IEA. 2024. https://www.iea.org/data-and-statistics/data-product/emissions-factors-2024.
• Smart Freight Center. n.d. “The GLEC Framework.” Smart Freight Centre. https://www.smartfreightcentre.org/en/how-to-implement-items/what-is-glec-framework/58/.