Expert Carbon Footprint Software to Track, Manage & Reduce Emissions

What is a Carbon Footprint?

A carbon footprint is the total amount of greenhouse gases (GHG) emitted directly or indirectly by a person, organization, event, or product. It is typically measured in CO₂ equivalents (CO₂e):
 

• A Product Carbon Footprint (PCF) refers to the GHG emissions associated with a product’s lifecycle—from raw material extraction and manufacturing to distribution, use, and disposal.
• A Corporate Carbon Footprint (CCF), on the other hand, quantifies the total emissions from a company’s operations, including energy consumption, transportation, waste management, and supply chain activities.
   

Both PCF and CCF are essential for understanding and managing environmental impact, helping businesses reduce emissions, enhance carbon management, and achieve sustainability goals.

What is Carbon Accounting?

A carbon accounting system provides reliable greenhouse gas (GHG) inventories, forming the foundation for a comprehensive environmental and sustainability management system. It also enables the monetary valuation of recorded emissions.

To measure your CO₂ emissions, you first conduct a carbon footprint assessment, a process similar to financial accounting but focused on quantifying the climate impact of your business activities. Carbon accounting helps identify emission sources and calculate your company's carbon footprint. With these insights, you can communicate sustainability efforts to regulatory bodies and stakeholders, while also facilitating GHG reduction strategies and competitive advantages.

Carbon accounting is also essential for emissions trading, as it quantifies a company’s GHG emissions, ensuring accurate tracking and reporting. These data are crucial for participating in carbon markets, where businesses can buy or sell carbon credits to meet regulatory requirements and achieve carbon neutrality.

What Are Greenhouse Gas Emissions?

Greenhouse gas (GHG) emissions refer to the release of gases into the atmosphere that trap heat and contribute to the greenhouse effect, leading to global warming and climate change. The most significant GHGs include:
 

• Carbon dioxide (CO₂): Primarily produced from the burning of fossil fuels (coal, oil, and natural gas), deforestation, and certain industrial processes.
• Methane (CH₄): Released during the production and transport of coal, oil, and natural gas, as well as from livestock farming, agriculture, and organic waste decomposition in landfills.
• Nitrous oxide (N₂O): Emitted from agricultural and industrial activities, biomass combustion, and fossil fuel burning.
• Hydrofluorocarbons (HFCs): Synthetic gases used in refrigeration, air conditioning, and industrial manufacturing.
• Perfluorocarbons (PFCs): Byproducts of industrial processes, also used in electronics manufacturing.
• Sulfur hexafluoride (SF₆): Used as an insulating gas in the electrical industry and in magnesium production.
• Nitrogen trifluoride (NF₃): Common in electronics manufacturing, especially for semiconductors and LCD displays.

These gases are measured in CO₂ equivalents (CO₂e) to account for their different Global Warming Potentials (GWP) over a given period. This standardized metric enables a comprehensive assessment of their impact on climate change.

Are Carbon Footprints Legally Required?

The calculation of carbon footprints is not universally mandatory for companies and organizations, but it is increasingly encouraged—or even required—by governments, industry standards, and stakeholders as part of global efforts to combat climate change and drive sustainability. Carbon accounting and reporting regulations vary worldwide in terms of scope and emission disclosure requirements:

Corporate Sustainability Reporting Directive (CSRD) – EU

The Corporate Sustainability Reporting Directive (CSRD), introduced by the European Commission in November 2022, replaces and expands the Non-Financial Reporting Directive (NFRD) by imposing stricter reporting obligations and extending the scope of covered companies.

From 2024 onwards, all large companies operating in the EU, regardless of their location, must disclose their emissions, including Scope 3 emissions.

Streamlined Energy and Carbon Reporting (SECR) – UK

Introduced in April 2019, the Streamlined Energy and Carbon Reporting (SECR) framework in the United Kingdom requires companies to include energy consumption and carbon emissions data in their annual reports. The regulation aims to broaden carbon reporting requirements and promote energy efficiency measures. Corporate groups, publicly listed companies, and large LLPs must comply with SECR.

Climate-Related Disclosure Rules by SEC – US

On March 6, 2024, the U.S. Securities and Exchange Commission (SEC) issued rules requiring both domestic and foreign companies to include comprehensive climate-related disclosures in their registration statements and periodic reports. These regulations apply to publicly traded companies and businesses engaged in public offerings.

As climate regulations continue to evolve, carbon footprint reporting is becoming a key compliance requirement for businesses worldwide, supporting transparency, climate impact reduction, and sustainability strategies.

What is the Carbon Disclosure Project (CDP)?

The Carbon Disclosure Project (CDP) is a global nonprofit organization that operates a comprehensive environmental disclosure system. Founded in 2000, CDP helps companies, cities, states, and regions measure and manage their environmental impact. Through its annual disclosure process, CDP collects data on greenhouse gas (GHG) emissions, water usage, and forest management from thousands of organizations worldwide.

The main objectives of CDP are to increase transparency, promote accountability, and drive action toward a more sustainable economy. By providing a platform for environmental disclosure, CDP enables investors, policymakers, and stakeholders to make informed decisions and support positive change. The reported data is used to generate detailed reports and analyses, highlighting environmental risks, opportunities, and the adoption of sustainable business practices.

Participation in CDP is recognized as a mark of environmental leadership and a commitment to sustainability. It helps organizations benchmark performance, identify areas for improvement, and track their progress over time.