Before you begin calculating your Corporate Carbon Footprint, you need to understand which emission categories and facilities should be included in that report.
To define which categories are material to your organisation, you must define two key boundaries:
Organisational boundaries – Determine which parts of the business are included in reporting.
Operational boundaries – Determine which emission sources within those parts of the business are included in reporting. This includes defining which indirect emissions are relevant for disclosure.
Step 1: Define your organisational boundary
Your organisational boundary determines which parts of your company are included in your emissions inventory. Because businesses often have complex legal structures—subsidiaries, joint ventures, franchises—it’s important to choose a consistent approach.
You can choose one of two approaches:
1. Equity share approach
Under the equity share approach, a company accounts for emissions based on its share of equity in an operation. This means emissions are attributed in proportion to the company’s economic interest (the extent to which it shares in the risks and rewards of the operation).
Example: The organisation owns 40% of a joint venture, so under the equity share approach reports 40% of its emissions.
2. Control approach
Under the control approach, a company reports 100% of the emissions from operations it controls, regardless of its ownership stake.
Control can be defined in two ways: financial control or operational control.
Financial control: A company has financial control over an operation if it has the power to direct financial and operating policies to gain economic benefits and fully consolidates the operation in its financial accounts.
Example: The organisation owns 40% of a joint venture but has the power to set budgets, approve financial decisions, and consolidate the joint venture in its financial statements. Using the financial control approach, the organisation must report 100% of the emissions from that operation.
Operational control: A company has operational control over an operation if it has full authority to introduce and implement operating policies at the site. This approach is commonly used by companies that report emissions from facilities they operate (e.g., those for which they hold an operating licence).
Example: An organisation manages a manufacturing plant it doesn’t own, but it has full authority over day-to-day operations, including staffing, maintenance, and safety policies. Using the operational control approach, the organisation must report 100% of the emissions from that operation.
CSRD and ESRS require companies to use the operational control approach. For a more detailed discussion of Organisational boundaries, we recommend reading Chapter 3 of the GHG Protocol Corporate Standard.
Step 2: Define your operational boundary
Once you know which parts of your business are included in your reporting, the next step is to define which emissions sources will be reported. Emissions sources are organised into Scopes and Categories.
Direct emissions (Scope 1)
Scope 1 emissions are direct greenhouse gas emissions (such as carbon dioxide or methane) from sources that are owned or controlled by your organisation. This can be the combustion of fuels in boilers or vehicles, emissions from chemical production processes, and emissions from owned or leased refrigeration equipment.
The GHG Protocol defines the following emission categories as part of Scope 1 emissions:
Stationary combustion (If you operate a warehouse that uses a gas boiler, the gas burned must be reported here)
Mobile combustion (If your organisation owns company vehicles, you must report the fuel burned in them here)
Fugitive emissions (If your facility uses refrigerants, any leaks must be reported here)
You must report Scope 1 emissions from all operations within your organisational boundary, based on your chosen consolidation approach (equity share or control).
Indirect emissions from purchased energy (Scope 2)
Scope 2 emissions are indirect greenhouse gas emissions that emerge from the generation of purchased electricity, heat, or steam that you may consume as part of your business operations. They are considered indirect because the emissions occur from activities outside of the organisation's control, but are still relevant to the organisation's overall carbon footprint.
The GHG Protocol defines the following emission categories as part of Scope 2 emissions:
Purchased electricity (Any electricity purchased to power offices, stores, or manufacturing sites is reported here).
Purchased heat (Any heat purchased to warm offices, stores, or manufacturing sites is reported here).
Purchased steam (Calculation methods not currently available on Plan A)
Purchased cooling (Calculation methods not currently available on Plan A)
You must report Scope 2 emissions from all operations within your organisational boundary, based on your chosen consolidation approach (equity share or control).
Other indirect emissions (Scope 3)
Scope 3 emissions are all other indirect greenhouse gas emissions that occur outside your organisation’s direct control but are a consequence of your business activities. These emissions often make up the largest share of a company’s carbon footprint and span both upstream (supply chain) and downstream (product use and disposal) activities.
Unlike Scope 1 and 2, reporting on Scope 3 isn’t always mandatory, but many sustainability frameworks and regulations are starting to require it. You are expected to report Scope 3 emissions that are relevant and material to your overall footprint.
To figure out which Scope 3 categories are material to your organisation, follow this practical 4-step process recommended by the GHG Protocol:
1. Map your value chain
Think through your business activities—from supplier to end user—and identify where emissions are likely to occur.
2. Focus on relevant categories
Prioritise categories that are large, likely to grow, or most important to stakeholders. Common examples include:
Business travel
Purchased goods and services
Transportation and distribution
Use of sold products
3. Identify key partners
Reach out to suppliers, logistics providers, and others who can share data or help reduce emissions.
4. Estimate emissions
Use the best available data: start with primary data from suppliers if possible, or use credible secondary sources.
Next steps
By clearly defining your organisational and operational boundaries—and identifying the most relevant emission sources—you’ll set the foundation for a robust and credible carbon footprint. This process not only supports accurate emissions reporting but also helps you focus your climate action where it matters most. With your boundaries in place, you're ready to start collecting data and calculating your emissions across Scope 1, 2, and material Scope 3 categories. Learn how to form your data collection team here.