Step-by-step guide to measuring your company’s carbon footprint 

Every business leaves a footprint. Some know how big theirs is, while others find out the hard way. In 2024, 43% of European mid-market companies reported significant investment in decarbonization, with more than half already treating it as a way to cut costs and win market share.

But compliance is just as pressing. With new EU rules like the CSRD, CBAM, and EUDR coming into force, companies are under growing pressure to back up sustainability claims with verified carbon data, or risk fines, supply chain disruption, and even being cut out of key markets. 

And the pressure isn’t only from regulators: 84% of consumers say they’ll walk away from brands with poor environmental practices. Measuring your footprint is quickly becoming the baseline for staying competitive in Europe.

So where do you start? This guide breaks down how to measure your company’s carbon footprint step by step, covering Scopes 1, 2, and 3 emissions. We’ll walk through the basics of the GHG Protocol and ESRS E1, what data you’ll need to collect, and some practical examples to help you build a footprint that’s audit-ready and useful for your business.

What does measuring a company’s carbon footprint involve?

Measuring a carbon footprint means calculating all the greenhouse gas (GHG) emissions linked to your business, both from your own operations and across your wider value chain. 

To make results consistent and comparable, companies typically follow the GHG Protocol Corporate Standard, which is also the basis for the EU’s new ESRS E1 climate disclosure rules.

Emissions are grouped into three categories, known as scopes:

• Scope 1: Direct emissions from sources your company owns or controls, for example, fuel burned in company vehicles or onsite boilers.
• Scope 2: Indirect emissions from the energy you buy, such as electricity, steam, heating, or cooling.
• Scope 3: All other indirect emissions that occur in your value chain. This is often the largest category and includes things like purchased goods and materials, supplier activities, logistics, employee commuting, business travel, and even how products are used and disposed of.

Why does this matter? A complete footprint is the foundation for compliance and action. Under the EU’s CSRD, companies need audited emissions data across all three scopes. 

The Science Based Targets initiative (SBTi) also requires a baseline footprint before setting net-zero targets. And beyond compliance, the numbers are what allow you to spot emission hotspots, prioritize reductions, and track progress over time.

{{custom-cta}}

What are the first steps to prepare for carbon footprint measurement?

Before calculating emissions, companies need to set clear boundaries. The GHG Protocol Corporate Standard requires organizations to decide on four key elements:

• Organizational boundaries: choose whether to consolidate emissions using the equity share approach or one of the control approaches (operational or financial).
• Operational boundaries: determine which emissions fall under Scope 1, 2, and 3, and decide which categories of activities will be included.
• Base year selection: identify a baseline year for tracking performance over time, typically the first year with reliable, complete data.
• Recalculation policy: establish rules for when past inventories must be adjusted, for example after acquisitions, divestitures, or major structural changes.
  

It’s now also best practice to ensure alignment with ESRS E1 (for CSRD compliance in the EU) and the SBTi, so the data you collect can be used for both regulatory reporting and target-setting.

Our guide on creating your first carbon reduction plan in 5 steps explains how to turn a baseline footprint into meaningful targets and reduction strategies.

How can Scope 1 emissions be measured step by step?

Scope 1 emissions cover direct emissions from sources you own or control (e.g., boilers, on-site generators, company vehicles) plus fugitive releases (e.g., refrigerant leaks).

1. Identify direct sources

Stationary combustion (natural gas, fuel oil), mobile combustion (company cars, vans, plant), process emissions, and refrigerants (HVAC, refrigeration).

2. Collect activity data

• Fuels: litres of diesel/petrol, kWh or m³ of natural gas, litres of LPG, etc.
• Vehicles: fuel purchase records or telematics; avoid mixing odometer km with spend unless you have good factors.
• Refrigerants: kg added/removed; use stock-change method (opening + purchases − closing − returns).

3. Apply emission factors

Use the best available, current factors that include CO₂, CH₄ and N₂O: supplier-specific if you have them; otherwise national/authoritative libraries (e.g., UK Government GHG Conversion Factors, IEA, EPA/EEA). For refrigerants, convert kg × GWP100 to CO₂e (use the GWP set required by your reporting framework).

4. Calculate

For combustion: 

• Emissions (kgCO₂e) = Activity data (e.g., litres of fuel consumed, kWh, or tonnes combusted) × Emission factor (kg CO₂e per unit of activity).
• Example: 1,000 litres of diesel × 2.68 kg CO₂e/litre = 2,680 kg CO₂e (using a typical national factor; always use the current factor for your country/supplier).

For refrigerants: 

• Emissions (kgCO₂e) = Mass of refrigerant leaked (kg) × Global Warming Potential (GWP100) of the refrigerant.
• Example: 10 kg of R-410A × 2,088 (GWP100) = 20,880 kg CO₂e (using a typical national factor; always use the current factor for your country/supplier).

5. Document for audit

Record data sources, factor sources and vintage (year), unit conversions, and any assumptions. Keep meter/bill extracts and maintenance logs.

How should Scope 2 emissions be measured?

Scope 2 emissions cover indirect emissions from purchased energy: mainly electricity, steam, heating, and cooling consumed by your operations. Under the GHG Protocol Scope 2 Guidance, companies must report emissions using two methods:

• Location-based: applies the average grid emission factor for the region where the energy is consumed.
• Market-based: uses supplier-specific data, such as renewable energy contracts or certificates (e.g. Guarantees of Origin in the EU, RECs in the US).
  

To measure Scope 2 step by step:

1. Collect utility bills or metered data for electricity, steam, heat, or cooling consumed.
2. Apply both location-based and market-based emission factors to the activity data.
3. Report both sets of results as required by the GHG Protocol, with clear documentation of sources.
   

For companies just starting out, location-based data gives a reliable baseline, while market-based reporting helps demonstrate the impact of renewable energy purchasing. You can learn more about practical measurement approaches in our guide on how to measure carbon emissions for business.

What is the process for measuring Scope 3 emissions?

Scope 3 emissions are all the indirect emissions that occur across a company’s value chain. The GHG Protocol breaks these down into 15 categories, ranging from purchased goods and services to business travel, logistics, investments, and waste disposal (see Figure 1 above). 

For most organizations, these emissions are by far the largest part of the footprint. In fact, McKinsey estimates they usually account for around 90% of total emissions.

The process is where most of the effort in a Scope 3 assessment lies. According to the GHG Protocol, it typically unfolds in four steps:

1. Map categories

Review all 15 Scope 3 categories and identify which are relevant to your business. Materiality depends on industry, operating model, and reporting goals. For example, manufacturers often focus on purchased goods, logistics, and end-of-life, while financial institutions focus on financed emissions.

2. Screen with initial estimates

Conduct a high-level screening using less specific data, such as spend-based economic input–output (EEIO) factors. This helps locate “hot spots” and size emissions across categories. The aim is not precision but direction: which categories are likely the biggest contributors, pose risks, or matter most to stakeholders .

3. Engage suppliers and refine data

For priority categories, replace generic estimates with primary data. This involves:

• Requesting supplier-specific cradle-to-gate emission factors and lifecycle assessments.
• Using questionnaires or portals to collect consistent data, including methodology and assurance details.
• Combining supplier data with secondary data where needed, and tracking the proportion of primary vs. secondary inputs.

Supplier engagement is often the most resource-intensive step, but also the most valuable.

4. Prioritize and improve over time

Focus on the largest and most material categories first. Over time, refine coverage and data quality by applying more accurate methods to big emitters, high-risk activities, or stakeholder-sensitive areas. The process is iterative: companies typically start with lower-quality data and improve as suppliers and systems mature.

Our guide on the 4 biggest challenges when measuring Scope 3 emissions outlines common pitfalls, and we explain why your biggest customers now expect you to report Scope 3 emissions if you want to understand the growing business case.

What data quality checks are essential?

Carbon accounting is only as strong as the data behind it. To ensure your footprint is reliable and audit-ready, companies should check three things:

• Activity data hierarchy: whenever possible, use primary data (e.g. direct supplier data or metered consumption) instead of secondary data like industry averages or spend-based estimates.
• Emission factor vintage: apply the most recent factors from recognized sources (e.g. government agencies, IEA, EPA, or EEA) and make sure they match the reporting year.
• Documentation: link every calculation to its data source and keep records of assumptions, unit conversions, and emission factor references for transparency.
  

For a deeper dive into preparing datasets that auditors will accept, see our guide on preparing your financial data for carbon accounting.

How do companies use results to set targets and manage reductions?

Measuring emissions is only the starting point. Once you have a complete inventory, it becomes the baseline for setting targets and tracking progress:

• Translate results into targets: use your footprint to set near- and long-term goals aligned with the SBTi or net-zero pathways.
• Engage suppliers: most emissions sit in Scope 3, so real reductions depend on collaboration across your value chain. Supplier engagement can focus on material categories such as purchased goods, logistics, or capital goods.
• Monitor progress: compare each year’s results against your base year to see whether you’re on track. Build this into annual reporting and use insights to refine your reduction strategy.

For more on the shift from measurement to action, see our guide on spending more time on carbon reduction (and less on data hassles), and explore nine practical decarbonisation methods to reduce supply chain emissions.

How can tools like Coolset simplify carbon footprint measurement?

For many companies, manual data collection and spreadsheets quickly become unmanageable, especially once Scope 3 categories and supplier data are involved. 

Platforms like Coolset streamline the process by combining:

• TÜV-certified methodology covering Scopes 1–3, so results meet recognized standards.
• Supplier-level data collection and automation, reducing reliance on estimates and speeding up data gathering.
• CSRD- and ESRS-ready workflows with audit trails, ensuring outputs are aligned with EU reporting requirements and verifiable by auditors.

Request a free demo to see how Coolset can streamline your carbon footprint measurement today.

FAQs – Measuring your carbon footprint

What is the difference between Scope 1, 2, and 3 emissions?

Scope 1 covers direct emissions from sources a company owns or controls, such as fuel burned in vehicles or boilers. Scope 2 refers to indirect emissions from purchased energy like electricity, steam, heating, or cooling. 

Scope 3 includes all other indirect emissions across the value chain, from purchased goods and logistics to employee commuting and end-of-life treatment of products.

Which standards should companies follow when measuring carbon footprints?

The GHG Protocol Corporate Standard is the global benchmark for defining and calculating emissions. In Europe, companies in scope of the CSRD must also align with ESRS E1, while those setting net-zero or near-term goals often use the SBTi for credibility. Following these frameworks ensures consistency, comparability, and compliance.

How can small companies get started without large budgets?

Smaller businesses can begin with simple approaches, such as using activity data (e.g. fuel use or electricity bills) for Scope 1 and 2, and spend-based estimates for Scope 3. This creates an initial footprint that can be improved over time as more accurate data becomes available. Starting small is better than delaying until perfect data is in place.

How often should a company recalculate its carbon footprint?

At a minimum, companies should recalculate their footprint annually to track year-on-year progress. A recalculation is also needed whenever significant organisational changes occur, such as acquisitions, divestitures, or major shifts in operations. This ensures the baseline remains accurate and comparable.

What role does supplier data play in Scope 3 measurement?

Supplier-specific data is critical for improving the accuracy of Scope 3 reporting, especially in categories like purchased goods and logistics where generic factors can give distorted results. 

Engaging suppliers directly allows companies to move beyond estimates and capture the real impact of their supply chain. Over time, this collaboration helps reduce emissions across the value chain.