Carbon accounting sounds technical, but most of it comes down to three things: what you used, how much greenhouse gas that use released, and the documents that prove both. This page takes each one in turn.
What carbon accounting is
Carbon accounting is the process of measuring the greenhouse gas emissions linked to an organisation's activities, expressed in tonnes of carbon dioxide equivalent (tCO₂e). It gives you a baseline: a measured starting point you can report, compare year on year and act on.
For most small and medium-sized firms, the reason to start comes from outside the business. A customer questionnaire, a tender or a lender asks for your footprint, and a figure you can defend is worth more than an estimate you cannot.
The three scopes
Under the GHG Protocol, the most widely used standard for corporate greenhouse gas accounting, emissions are grouped into three scopes.
Direct emissions
Fuel burned on sites and in vehicles you own or control, such as gas in boilers and diesel in company vans.
Purchased energy
Emissions from generating the electricity, steam, heat and cooling you buy.
Value chain
Every other indirect source, across 15 categories upstream and downstream. Usually the largest share.
Where a source sits depends on where the burning happens. Gas burned in your own boilers or furnaces is Scope 1, because it burns on your site. Electricity is Scope 2, because its emissions happen at the power station. Water and waste are Scope 3.
Activity data
Activity data is the underlying information about activities that generate emissions, such as energy use, fuel, business travel and purchased goods. Good carbon accounting starts with collecting this data reliably and knowing where it came from.
In practice it means your bills and records: electricity and gas bills in kilowatt hours, fuel card statements in litres, mileage claims in miles. Each one should say which site, which meter and which period it covers.
Conversion factors
Emission factors convert activity data into emissions. A factor turns a litre of diesel or a kilowatt hour of electricity into kilograms of CO₂e. Using recognised, up-to-date factors keeps your figures credible.
In the UK the government publishes a new set every year, called the greenhouse gas conversion factors, from the Department for Energy Security and Net Zero (DESNZ). Use the set for the year your data covers, and record which set you used, so anyone checking the figure later can repeat the sum.
tCO₂e
Different greenhouse gases have different warming effects, so emissions are expressed in a common unit: tonnes of carbon dioxide equivalent. A tonne of methane, for example, counts as many tonnes of CO₂e because it traps more heat. The common unit lets you add up and compare emissions across sources.
Putting it together
Every line of a footprint is the same sum: activity data multiplied by a conversion factor.
Activity data
10,000
kWh
Conversion factor
0.2
kg CO₂e per kWh
Emissions
2
tCO₂e
Illustrative example. The factor is made up to keep the sum simple; real factors come from the published set for your reporting year.
Say one site's August electricity bill shows 10,000 kWh. At a factor of 0.2 kg CO₂e per kWh, that is 2,000 kg, or 2 tCO₂e. Do the same for every bill, meter and month, add the results by scope, and you have your footprint.
Why evidence matters
Reporting only helps if people believe the figures. Keeping evidence connected to each number, with a clear method and owner, means you can answer questions from auditors, customers and investors with confidence.
Keep the bill with the figure it supports, note which factor set you used, and record who entered the reading and who checked it.
Why data quality matters
The quality of your footprint depends on the quality of your data. Validation, clear ownership and consistent methods reduce errors and make reporting repeatable year after year. Before you report, check that:
- every meter has a reading for every month, with no gaps;
- any sudden jump has a reason you can explain;
- units are right: kWh, not MWh; litres, not gallons;
- every figure has a document behind it.
Where ESGen fits
ESGen's platform measures Scope 1 and Scope 2 from UK electricity, gas, diesel, petrol and staff-car mileage, using the UK government's conversion factors, and adds the upstream energy share of Scope 3 automatically. Each reading keeps its bill, each calculation is logged, and a reporting year locks once you sign it off.
Other Scope 3 categories, such as purchased goods or transport, are scoped with our team as a service.
See it on real bills
How a footprint is measured in ESGen walks through sites, meters, data checks and the calculation log step by step.
