Carbon reporting is no longer optional for many UK businesses, and even where it's not a legal requirement, clients, investors, and lenders are increasingly expecting it. The starting point is understanding what you're measuring.
The three scopes
The Greenhouse Gas (GHG) Protocol divides emissions into three categories, or "scopes." Understanding which emissions fall into which scope is fundamental to accurate reporting.
Direct emissions
These are emissions from sources that your organisation owns or controls directly:
- Fuel combustion in company vehicles (fleet cars, vans, trucks)
- Natural gas burned in on-site boilers and furnaces
- Fuel used in owned or operated generators
- Process emissions from chemical manufacturing or industrial processes
- Fugitive emissions (refrigerant leaks from air conditioning, methane from on-site waste)
If you burn it, own it, or operate it — it's Scope 1.
Indirect emissions from purchased energy
These are emissions from the generation of electricity, steam, heating, or cooling that your organisation purchases and consumes:
- Electricity used in your buildings, offices, and facilities
- Purchased steam or district heating
You don't produce these emissions directly, but they exist because of your energy demand. Scope 2 is typically the easiest category to reduce by switching to renewable energy tariffs or on-site generation.
Everything else
Scope 3 covers all other indirect emissions in your value chain. This is by far the largest and most complex category for most organisations:
- Business travel (flights, trains, taxis, hotels)
- Employee commuting
- Purchased goods and services (the emissions embedded in everything you buy)
- Upstream and downstream transport and distribution
- Waste generated in operations
- Use of sold products (for manufacturers — the emissions when customers use your product)
- End-of-life treatment of sold products
Scope 3 is where most organisations' emissions actually sit. For a services business, Scope 3 might represent 80–90% of the total footprint.
Who needs to report what
In the UK, the Streamlined Energy and Carbon Reporting (SECR) framework requires large companies (those meeting at least two of: 250+ employees, £36m+ turnover, £18m+ balance sheet) to report Scope 1 and 2 emissions in their annual reports. Quoted companies have additional requirements under the Companies Act.
Scope 3 reporting is not yet mandatory for most UK companies, but CDP disclosure, Science Based Targets, and Net Zero commitments all require it. If your clients or investors are asking for your carbon footprint, they increasingly expect Scope 3.
Getting started
- Start with Scope 1 and 2 — these are the most straightforward to measure using utility bills, fuel purchase records, and fleet mileage data
- Establish a baseline year against which to measure progress
- Tackle Scope 3 in stages, starting with the categories most material to your business (usually business travel, purchased goods, and employee commuting)
- Use recognised emission factors — the UK Government publishes conversion factors annually
EHS Protect helps UK businesses with carbon footprint measurement, emissions reporting, and developing practical net zero strategies. If you're unsure where to start, a scoping consultation will help you understand your obligations and prioritise your approach.
Richard Levack
Managing Director, EHS Protect. IRCA EMS Lead Auditor · NEBOSH · COSHH Assessor