Why companies ask about the carbon footprint
Requirements for emissions data come from several directions: from customers who monitor the emissions of their supply chain, from banks and investors and from regulation in the area of sustainability. Reporting obligations differ by company size and are evolving gradually, so always check the current status of the specific obligation.
For a manufacturing company, the good news is that a large share of emissions can be derived from data you already have (or soon will): electricity, gas and heat consumption, and from fuels. That is why energy consumption monitoring and carbon footprint are naturally linked.
GHG Protocol: Scope 1, 2 and 3
The GHG Protocol is the most widely used methodology for calculating a company's greenhouse gas emissions. It divides emissions into three scopes:
| Scope | What it covers | Examples from manufacturing |
|---|---|---|
| Scope 1 | Direct emissions from sources the company owns or controls | natural gas combustion in boilers and furnaces, vehicle fuels, refrigerant leaks |
| Scope 2 | Indirect emissions from purchased energy | electricity, heat or steam from the grid |
| Scope 3 | Other indirect emissions in the value chain (15 categories) | purchased materials, transport, waste, business travel, use of products |
Under the methodology, Scope 2 is reported in two ways: location-based (based on the average grid emission factor in the given area) and market-based (based on the contractual terms of electricity purchase). A good report shows both values.
How to define the reporting boundaries
Before you start calculating, you need to determine which parts of the company belong in the footprint. The GHG Protocol describes consolidation approaches: by equity share, by financial control or by operational control. For most manufacturing companies, operational control is the natural choice, i.e. including the sources the company itself operates.
It is good practice to write the boundaries into the methodology and keep them the same over time. Otherwise individual years cannot be compared, nor can you assess whether emissions are really falling.
What data you need
The basic formula is simple: emissions = activity data × emission factor. Activity data are consumption figures (kWh of electricity, m³ of gas, litres of fuel, tonnes of material); the emission factor converts the unit into kilograms or tonnes of CO₂ equivalent.
- Scope 1 and 2 can to a large extent be calculated from measured energy and fuel consumption.
- Emission factors must come from recognised sources and state the year and source. Factors must not be invented, and if a factor is only provisional, this should be visible in the report.
- Scope 3 requires data from purchasing, transport and suppliers. Start with the categories most significant for the company, and for missing data honestly state “not calculated”, not zero.
Where to get emission factors
Emission factors are not invented or taken from uncertain sources. Factors from recognised databases and methodologies are used, or energy supplier factors, and each one states its source, year and unit. Watch for consistency:
- the factor must match the unit of consumption (kWh, m³, litre, tonne),
- for greenhouse gases other than CO₂, conversions to CO₂ equivalent are used according to the chosen methodology,
- factors change over time, so a calculation is always saved with the selected version of the factors,
- provisional or unverified factors must be marked as such in the output.
Credibility: data quality and traceability
A figure in a report is only as good as how well it can be defended. Every calculation should be traceable back to the data, factors and settings used, and it should be clear what share of the data is measured and what is estimated. An approved calculation must not be changed retrospectively and should be approved by a different person than the one who created it.
The Energy Infra Scan platform calculates Scope 1 and 2 from measured and entered data, stores calculations as immutable snapshots and enables customer reports and ESG reporting. Selected Scope 3 items are entered as manual values with a note on their origin.
Relationship to ISO 50001 and the energy audit
The carbon footprint and the energy management system share the same data. The consumption measurement required by ISO 50001 and which also makes an energy audit easier is also the basis for calculating Scope 1 and 2. Measures from the audit that reduce energy consumption also reduce emissions. This means data can be collected once and used for several purposes.
Common mistakes when calculating a carbon footprint
- Mixing boundaries and periods. Calculating each year slightly differently does not give comparable results.
- Estimates passed off as measurements. Estimated or extrapolated data must be labelled.
- Only one Scope 2 value. Both location-based and market-based should be reported.
- Scope 3 as zero. What is not calculated should be marked as not calculated, not as zero.
- Untraceable calculation. Without stored inputs and factors, the figure cannot be defended.
VSME: a simplified standard for smaller companies
VSME is a voluntary sustainability reporting standard for small and medium-sized enterprises, issued by EFRAG. It is intended for companies that are not subject to full mandatory regulation but from which customers or banks request data. It also includes basic data on energy consumption and emissions.
If you have this data under control through monitoring , responses to VSME or customer questionnaires can be prepared much faster and more consistently. The scope of specific obligations and the form of the standards are evolving, so we recommend keeping track of the current requirements of your customers and of regulation.
How to get started
- Map the sources of emissions (energy, fuels, technologies) and the boundaries you will report on.
- Ensure reliable consumption data, ideally from continuous measurement.
- Select emission factors and document their origin.
- Calculate Scope 1 and 2, then gradually add the most significant Scope 3 categories.
- Set a reduction target and track its delivery.
Energy consumption and CO₂ emissions per product, order or line are offered by the Advanced level. If you are not sure where to start, arrange a consultation.
How often to report and what to do with the results
It makes sense to calculate the carbon footprint regularly, typically annually for external reporting and more often for your own management. The result should serve decision-making: identify the largest sources of emissions, set a reduction target and select the measures with the best ratio of benefit to cost. You can then use the same data for customers, banks and any subsidy or certification requirements .
Frequently asked questions
What are Scope 1, 2 and 3?
Scope 1 covers direct emissions from a company's own sources (for example, gas combustion), Scope 2 covers indirect emissions from purchased energy (electricity, heat), and Scope 3 covers other indirect emissions in the value chain, such as purchased materials and transport.
How are emissions calculated?
Activity data (for example, energy or fuel consumption) is multiplied by an emission factor, which converts the unit of consumption into CO₂ equivalent.
What are location-based and market-based Scope 2?
Location-based uses the average grid emission factor for the given area, while market-based is derived from the contractual terms of electricity purchase. A good report states both values.
What is VSME?
A voluntary sustainability reporting standard for small and medium-sized enterprises, issued by EFRAG.