For UK SMEs embarking on an ESG programme, measuring your carbon footprint is usually the right place to start on the environmental pillar. It produces a baseline — a quantified picture of your current greenhouse gas (GHG) emissions — against which future performance can be measured and targets can be set. Without a baseline, any commitment to reduce emissions is aspiration without accountability.
The mechanics of carbon measurement are more accessible than many business owners assume. You do not need a specialist environmental consultancy to conduct your first carbon footprint assessment. What you need is an understanding of the measurement framework, a systematic approach to gathering the right data, and a reliable calculation methodology.
This guide explains the GHG Protocol framework, the three scopes of emissions, how to gather the data you need, and how to produce a credible first carbon footprint for your SME.
What is a carbon footprint measurement for a business?A business carbon footprint is a quantified assessment of the greenhouse gas emissions caused by the business’s operations, expressed in tonnes of CO₂ equivalent (tCO₂e). It covers emissions from direct fuel combustion, purchased energy, and the wider value chain — purchased goods and services, business travel, and the use of sold products. Measuring your footprint is the essential first step toward setting credible reduction targets and reporting credibly on climate performance. |
The GHG Protocol: The Standard Framework
The internationally recognised standard for business carbon measurement is the GHG Protocol Corporate Accounting and Reporting Standard, published by the World Resources Institute and the World Business Council for Sustainable Development. It is the methodology underpinning virtually all ESG frameworks that include carbon measurement — GRI, TCFD, ISSB, and the UK government’s own guidance.
The GHG Protocol organises emissions into three scopes:
Scope 1: Direct Emissions
Scope 1 covers emissions from sources that your business owns or controls directly:
- Burning natural gas, oil, or other fuels in your premises
- Company vehicles (fuel combustion)
- Manufacturing processes that release GHGs directly
- Refrigerants in air conditioning and cooling systems (F-gases)
Scope 1 is typically the easiest scope to measure because the data — fuel bills, vehicle mileage logs, refrigerant records — is under your direct control.
Scope 2: Indirect Emissions from Purchased Energy
Scope 2 covers emissions from the generation of electricity, heat, steam, or cooling that you purchase and consume. For most UK SMEs, this means the emissions associated with the electricity consumed at your premises.
The calculation uses:
- Your electricity consumption in kWh (from energy bills)
- Multiplied by the appropriate grid emission factor — published annually by DESNZ (Department for Energy Security and Net Zero)
For 2024/25, the UK grid emission factor for electricity is approximately 0.207 kgCO₂e/kWh, down significantly from five years ago as renewables’ share of generation has grown.
Scope 3: Value Chain Emissions
Scope 3 covers all other indirect emissions in your value chain — both upstream (from your supply chain) and downstream (from the use of your products or services). The GHG Protocol identifies 15 Scope 3 categories, including:
- Purchased goods and services: emissions from producing what you buy
- Capital goods: emissions from producing your equipment and assets
- Business travel: flights, hotels, rail travel by staff
- Employee commuting: staff travel to and from work
- Upstream transport and distribution: logistics for goods you purchase
- Downstream use of sold products: emissions from customers using your products
Scope 3 is typically the largest share of a business’s total emissions — often 70–90% for service businesses. It is also the hardest to measure, because you are relying on data from your suppliers and customers rather than your own records.
For SMEs producing their first carbon footprint, it is reasonable to prioritise Scope 1 and 2 and the most material Scope 3 categories rather than attempting a comprehensive Scope 3 assessment from the outset.
Step-by-Step: Measuring Your SME’s Carbon Footprint
Step 1: Define Your Organisational Boundary
Decide which parts of your organisation are included in the footprint. For most SMEs this is straightforward — all activities within your legal entity. For businesses with subsidiaries, joint ventures, or franchisees, the boundary requires more careful consideration.
Step 2: Identify Your Emission Sources
Map the emission sources within your boundary:
- Energy consumption: gas, electricity, oil, LPG
- Company vehicles: fuel type, mileage
- Refrigerants: type and quantities recharged
- Business travel: flights (class and distance), rail, hotel nights
- Purchased goods: your most significant spend categories
Step 3: Gather Activity Data
Collect the data for each emission source over a 12-month period (choose a consistent reporting year):
| Emission Source | Data Needed | Where to Get It |
| Natural gas | Consumption in kWh or m³ | Gas bills |
| Electricity | Consumption in kWh | Electricity bills |
| Company cars (diesel/petrol) | Litres consumed or miles driven | Fuel receipts, mileage logs |
| Company cars (electric) | kWh consumed | Charging records, electricity bills |
| Business flights | Distance (km) and class | Booking records, travel management |
| Business rail travel | Distance (km) | Booking records |
| Purchased goods | Spend (£) by category | Management accounts |
Step 4: Apply Emission Factors
Emission factors convert activity data into tCO₂e. The UK Government publishes annual greenhouse gas conversion factors, available free from the DESNZ website. Use the factors for the year your activity occurred.
Examples:
- Natural gas: 0.18254 kgCO₂e/kWh (gross calorific value, 2024)
- UK grid electricity: 0.20707 kgCO₂e/kWh (2024)
- Diesel: 2.6554 kgCO₂e per litre
- Short-haul economy flight: 0.2564 kgCO₂e/km per passenger
Step 5: Calculate and Aggregate
Multiply each activity data point by its emission factor to produce tCO₂e for each emission source. Sum across all sources within each scope. Produce a total footprint expressed as tCO₂e per year.
Step 6: Set a Baseline and Targets
Your first year’s measurement becomes your baseline year. Future years are measured against it. Targets — absolute reductions, intensity reductions, or net zero commitments — are set against the baseline.
Consider aligning your targets with the Science Based Targets initiative (SBTi), which provides a methodology for setting emission reduction targets consistent with the Paris Agreement’s 1.5°C pathway.
Free Tools for UK SME Carbon Measurement
Several free tools are available for SMEs:
- SME Climate Hub Carbon Calculator: a simplified tool specifically designed for SMEs
- Carbon Trust SME Carbon Footprint Calculator: sector-specific guidance
- DESNZ Greenhouse Gas Conversion Factors: essential for any GHG calculation; updated annually and free to download
Elberra Consulting’s ESG Consulting Services supports UK SMEs through the carbon measurement process, from data gathering and calculation through to reporting and target-setting under recognised frameworks. See also our overview article ESG Reporting for UK SMEs: Where to Start in 2026 for the broader ESG context.
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| Elberra Consulting helps UK SMEs measure, report, and reduce their carbon footprint as part of a practical, commercially grounded ESG programme. Book a Free Consultation →
Book your free consultation → elberraconsulting.co.uk/free-consultation/ |
Frequently Asked Questions
Do I have to measure Scope 3 emissions?
Not immediately, for most SMEs. Scope 1 and 2 are the foundation. However, if you supply large companies with mandatory net zero commitments, they will increasingly request your Scope 3 data (because your emissions are part of their Scope 3). Starting to track the most significant Scope 3 categories — business travel, purchased goods in your highest-spend categories — is good preparation.
What is a carbon offset and should I use one?
A carbon offset is a reduction in emissions elsewhere, used to compensate for emissions you have not yet eliminated. High-quality offsets (verified under standards such as Gold Standard or Verified Carbon Standard) can play a legitimate role in a net zero strategy — but only after you have made maximum effort to reduce your own emissions. “Offsetting” without reducing is not a credible net zero strategy and is increasingly challenged as greenwashing.
How accurate does my first carbon footprint need to be?
More accurate than a rough estimate, but not perfect. The goal of a first footprint is to establish a baseline and identify the most significant emission sources. Use actual data wherever possible and document your methodology and assumptions clearly. Transparency about data limitations is more credible than false precision.
What is an emission factor and where do I get them?
Emission factors are conversion rates that translate activity data (kWh of gas consumed, litres of diesel burned, km flown) into tonnes of CO₂ equivalent. The UK Government publishes its greenhouse gas conversion factors annually, free of charge, via the DESNZ website. Always use the factors for the year in which the activity occurred — the grid emission factor for electricity changes year on year as the generation mix evolves.
