Carbon Calculation for New Companies

ESG reporting
E = A x EF x (1-ER/100) where: E = emissions, A = activity rate, EF = emission factor, and ER = overall emission reduction efficiency, %.
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June 15, 2023

Do you have a new company, or want to open one? The success you can achieve with the enterprise is dependent on a number of things, such as good marketing, high-quality products, and leadership. However, there is one more thing that you must get right for your new company: compliance with different legal and policy requirements. 

Some of the emerging laws that every company should comply with are on sustainability, related calculation, and reporting. Almost every government on the planet is in the race to pass sustainability laws, especially those that target addressing global warming through carbon footprint reduction.

These laws require companies to craft and implement realistic strategies to help them cut down greenhouse gas (GHG) emissions that are worsening the problem of global warming. To be able to reduce your emissions, the first step is carbon calculation

Where do you start the process of carbon calculation? Which parameters do you target? What do you do after the carbon calculation? Keep reading to learn more about carbon calculation, including useful tips to avoid greenwashing

A Brief Look at Global Warming 

As an entrepreneur or manager of a new company, it is important to have the bigger picture of global warming, especially its relation to energy use and environmental impacts. Here are some important facts about greenhouse gas emissions, climate change global warming that you should know: 

  • Global warming is the rise in the earth’s surface temperature mainly because of the excessive release of greenhouse gasses. The most dangerous is carbon dioxide (CO2), which rapidly traps heat as opposed to allowing it to escape into space. Make sure to also factor other emissions, such as methane, when using a calculator to determine your company’s footprint. 
  • Since 1880, global temperatures have risen by an average of 0.08 degrees Celsius per decade. 
  • In 2020, the earth's temperature was 0.81 degrees Celsius higher than the 20th-century average. 
  • Since 1870, the global sea level has risen by more than eight inches. 
  • Global warming has resulted in shrinking glaciers, especially on the earth's poles. Trees are also flowering sooner than they should. 
  • The rise in global temperatures is putting the coral reefs and other fragile marine ecosystems in great danger.
  • People are at a high risk of suffering from heat-related illnesses and deaths because of climate change. The diabetics are at greater danger. Do you know the GHG protocol?

What is the Importance of Carbon Calculation? 

Carbon calculation is an important first step for your enterprise to become a part of the solution to the current crisis of global warming. Many companies have done this with the intention of establishing the source of emissions and reducing them. It has become pretty intuitive and beneficial with time. The reputational benefits make your potential investors, new clients, and future employees want your engagement.

Customers will want to buy your products or services, because they feel part of the effort to reduce GHG emissions and build a better planet. So, you will not be alone. The additional support can help to provide the resources and strength needed to cut down tons of GHG emissions every year. All about the climate reporting here.

Internally, understanding your company’s carbon footprint offers the opportunity to rethink its operating design. If the high carbon footprint is caused by inefficiencies in your company's machinery, heating & cooling, or transport, this can be an opportunity to introduce changes that will accelerate success.

You might want to run some simulations on the benefits that your company gets for the pounds (lbs) it manages to reduce. 

Carbon calculation and reduction are essential tools or parts of compliance with emerging regulations. One example is the stock markets, such as Hong Kong Stock Exchange (HKEX). To continue being a revered financial hub, Hong Kong requires every business to prepare an accurate sustainability report, including carbon footprints. Do you know how to calculate carbon emissions?

Governments are also passing legislation pushing for a zero-carbon economy. For example, the EU has already adopted a policy to guide the block towards 55% carbon emission reduction by 2030. Therefore, your company’s carbon calculation and strategy formulation can help with compliance at different levels, from shipping to industrial production. Do you know the science based targets initiative?

These are the main benefits of carbon footprint calculation and reduction, but they are not the only ones. You are also sure of enjoying a bigger market share, stronger brand, and high profitability. 

How to Calculate Your Company’s Carbon Footprint 

Carbon calculation should be considered like carbon accounting. You need to follow all the main steps to get it right. 

  1. Understand the Different Types of Carbon Emissions

Carbon emissions can be broken into three categories, Scope 1, Scope 2, and Scope 3. Scope 1 emissions are the greenhouse gasses arising from your company operations. Pollutants from your production machines and leaking refrigerants are part of Scope 1 1emissions. 

Scope 2 emissions are those greenhouse gasses coming from companies that supply your firm with energy. In most cases, these companies sell you electricity, heat, or steam. Scope 3 emissions are indirectly related to your company and can result from actions such as waste emitting methane gas and staff commuting to work. 

  1. Make sure to Work with an Appropriate Framework 

Over the years, different frameworks have been designed to help companies correctly calculate and reduce their emissions. Therefore, you need to select the preferred model and use it during the entire reporting phase. Some of the common options include the Task Force on Climate-Related Disclosures (TCFD) and Climate Change Reporting Framework (CCRF).

If your carbon footprint reduction is part of the larger ESG sustainability reporting efforts, make sure to select a framework that can help with it too. Good examples include the Global Reporting Initiative (GRI) and TCFD. 

  1. Collect Greenhouse Gas Data from Different Sources 

This step is very important because it determines how correct your calculations will be. Therefore, it is important to make sure that all the sources of emissions and their quantities are included. Here is part of the data that you should collect for carbon calculation. 

  • Water supply in cubic meters or gallons. 
  • Natural gas in kilowatt-hours.
  • Electricity used in kilowatt-hours.
  • Water treatment in cubic meters. 
  • Distance traveled by your employee in miles. 
  • Field used by the transport vehicles based on mileage. 
  • Water and waste disposal in tones released into the land-fill. 
  1. Calculate Your Greenhouse Gas Emissions 

To calculate your GHG emissions, the data you have collected from business actions has to be converted using an “emission factor.”  Check out the emission equation below: 

E = A x EF x (1-ER/100) where: E = emissions, A = activity rate, EF = emission factor, and ER = overall emission reduction efficiency, %.

Once you get the emissions coming from your company, go ahead and draw an action plan for reduction. For example, you might opt to shift to energy-saving lamps, change to a new type of transport, and alter the product design. Ensure the action you take is carefully thought out to enjoy even more benefits from carbon reduction. 

Increase the Data Accuracy and Calculations with ESG Reporting Apps

The main task when doing greenhouse gas emissions calculations is gathering data. In most cases, this has to be a continuous process, which means following different sources on a regular basis. Some people make the mistake of trying to do this manually, and end up with data that is not convincing. 

The most recommended method of carbon calculation is combining it with other sustainability reporting tools and strategies. If you are supporting a greening project and social justice courses, pooling it together with carbon footprint reduction will give your company’s efforts on sustainability greater relevance.

A good sustainability reporting software allows you to work with all parameters. Once you download and install it correctly, you can even automate some sections of data collection to increase accuracy. 

This post has demonstrated that if you have a new company, it is important to put carbon calculation as part of the main operating strategy. We have also shown that the process can be pretty complex, and the best way to get it right is working with a professional and the right sustainability reporting software. 

At, we have a dedicated team with a lot of experience in sustainability matters, and you can count on us for correct carbon calculation and the best ESG reporting applications.

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