Know your carbon, without the paperwork
If your bank shows a carbon figure alongside your business account, this page explains where that number comes from, how it is calculated, and what it can and cannot tell you.
Every payment your business makes carries emissions behind it. Fuel, electricity, a delivery, a flight, a box of paper. Each one has a carbon cost attached to producing and delivering it.
This method reads your payments, identifies what each one was for, and applies an average carbon figure for that type of purchase.
The result is an estimate. It gives you a reliable picture of where your emissions come from. It is not a measurement, and it will not be exact for your particular business.
That trade-off is deliberate. An exact figure requires meter readings, fuel records, and emissions data from every supplier in your chain. That is a substantial exercise for any organisation, and for most it is not a realistic first step. Your payment records already exist, so this method works from them.
Why an estimate is worth having
You cannot reduce what you cannot see.
Without a footprint of some kind, there is no way to know whether your emissions sit mainly in your vehicles, your electricity, or the goods you buy. An estimate answers that question. Once you can see where the bulk of your footprint sits, you know where to begin.
It is a starting point, not a conclusion.
How it works
Identifying what you bought
Every payment is assigned to a type of purchase.
Two things make this possible. Card payments carry a code identifying the kind of business you paid: a retailer, a fuel station, a hotel. Bills and direct debits carry the name of the company you paid, which can be matched against registers of licensed energy and water suppliers.
The assignment follows a fixed set of written rules. The same payment always produces the same result. Nothing is inferred by guesswork, and you are not asked to categorise anything yourself.
Every payment receives a category. Where a payment does not fit a specific one, it is assigned to a general category rather than being left out.
Applying a carbon figure
Each category carries a carbon figure, established in one of two ways.
For fuel, electricity and heating, the starting point is published national data on the emissions from burning a litre of diesel or consuming a kilowatt-hour of electricity. These are the same figures governments use in their own reporting.
For everything else, the calculation draws on economic data that tracks emissions across each sector of the economy, expressed per unit of currency spent. One hundred euros spent with a cement supplier therefore carries more carbon than one hundred euros spent on accountancy, because producing cement releases more.
The calculation
Your emissions for a payment are the amount spent, multiplied by the figure for that category.
Where your app displays an approximate quantity, such as an estimated number of kilowatt-hours, that figure is there to give you a sense of scale. It is derived from average prices and is indicative only. Your actual bill may show a different quantity, and that does not mean the carbon figure is wrong.
Improving the result
If you have a bill to hand, you can enter the actual figures: kilowatt-hours from your electricity statement, litres from a fuel receipt. That payment is then recalculated using your real consumption rather than an average.
This is optional. If you enter nothing, you still receive a complete footprint. Anything you do add improves the accuracy of that part of it.
What is included
Emissions are conventionally grouped into three types. Here is what each one means in practice.
Fuel you burn directly
Fuel in vehicles you own or control. Gas or oil used to heat your premises.
Energy you purchase
Electricity, and heat where you buy it from a district network. You do not burn it yourself, but it is burned on your behalf.
Everything else you buy
Across most sectors this is the largest share and the least expected. It covers goods and services you purchase, equipment you invest in, deliveries, business travel, employee commuting, waste collection, and anything you rent or lease.
Across these three groups, the method covers twelve categories. Your report breaks them down so you can see which matter most for your business.
What is not included
This matters as much as what is covered. If you rely on the figure, you should understand its limits.
Refrigerant leaks. If you operate refrigeration, freezers or air conditioning, gases can escape, and those gases are potent. A payment gives no indication that a leak has occurred, so this is not captured. For restaurants, retailers holding chilled stock, and refrigerated transport, this is a genuine gap.
Cash payments. Anything that did not pass through the account is not visible.
Industrial process emissions. If you manufacture, some emissions arise from the process itself rather than from anything purchased. Spending cannot detect these.
Renewable energy contracts. A green tariff is not visible in payment data, so your electricity figure reflects the average grid where you operate.
Differences between suppliers. The method uses sector averages. If you have deliberately chosen a lower-carbon supplier over a competitor, that decision will not appear in your figure. It remains worth making.
How accurate is it, and can I use it for reporting?
It is accurate enough to show you where your emissions come from. It is not accurate enough to demonstrate precisely how much you have reduced them.
Consider it this way. If your figure indicates that most of your footprint is your delivery vehicle, that is almost certainly correct and worth acting on. If your figure falls by three percent in a year, that may be a real reduction, or it may reflect a change in prices, in what you bought, or in the underlying data. Use it to identify your major sources and to follow the general direction over several years, rather than to make precise claims.
On reporting. You can share these figures, provided you describe them accurately. They are an estimate built from your spending. Where a customer or a lender asks for emissions data, this is a credible answer, and an honest one so long as it is not presented as measured.
There is also a practical advantage. This method groups emissions the same way the international reporting rules do, so if you later commission a fuller assessment, your estimate aligns with it rather than having to be discarded and rebuilt.
The data quality score on your report
Alongside each figure, your report indicates how that figure was established. This uses a scale known as PCAF, and it is worth understanding.
PCAF is a standard used by banks and investors to record the strength of the evidence behind a carbon number, rather than the number itself. It runs from 1 to 5, where a lower number indicates stronger evidence.
Stronger evidence
You entered a reading taken from your own bill.
Weaker evidence
The figure was estimated from your spending alone.
This is useful to you for two reasons. It shows at a glance which parts of your footprint are well supported and which are approximate, so you know which to rely on. And if a bank or a customer asks how robust your data is, the answer is already stated in a form they recognise.
No action is required on your part. It simply means the basis for every figure is visible, including to you.
Is this the same as formal carbon accounting?
No, and the distinction is worth stating.
It is comparable to assessing your tax position from your bank statements alone. The overall shape will be right, and details will be missing.
Where no emissions data exists yet, this is a practical way to begin and to see something real. Where reporting obligations are formal, or operations are complex enough that spending no longer reflects activity well, it is a useful first view but not sufficient on its own.
Can I improve my figure?
Yes, within a defined boundary.
What you can provide: readings from electricity, gas or water bills, fuel volume and type, distances travelled, vehicle class, and the recycled proportion of your waste.
What this changes: it improves the accuracy of the carbon figure for those payments.
What it does not change: it does not determine which category a payment belongs to. That is handled by the rules, applied identically for everyone. You are therefore never asked questions such as whether a journey was business travel or a commute, since the answer would vary between people and make figures impossible to compare.
The most valuable additions are electricity and fuel consumption. These are typically large, and actual readings improve them most.
Where the figures come from
| Input | Source | Updated |
|---|---|---|
| Emissions per litre of fuel and per unit of gas | National government factors, or UK government factors where no national equivalent is published | Annually |
| Emissions per unit of electricity | National grid operator or energy regulator | Annually |
| Emissions per unit of currency spent, by sector | EXIOBASE, an international database tracking emissions across the economy | On database release |
| Energy and fuel prices | Official national and European price statistics | Every few weeks to every few months |
| Registers of energy and water suppliers | The energy regulator in each country | Annually, or when the register is updated |
On country coverage. Not every country has its own dataset. Where one is unavailable, the closest regional grouping or a comparable country is used instead, which introduces additional uncertainty. The country page for your market states which basis applies.
On prices. The prices used are national averages and yours will differ. Prices affect only the estimated consumption shown on screen, not the carbon figure itself.
Common questions
Another business spends the same as mine but has a different footprint. Why?
Because you buy different things. The figure follows what is purchased, not how much is spent.
I switched to a green tariff and nothing changed. Why?
Your payment carries no information about your electricity contract, so the calculation applies the average for your national grid. The switch remains worthwhile; it is simply not visible here.
Can I show this to my bank or a customer?
Yes, provided you describe it accurately. It is an estimate based on your spending, and your report already shows how each figure was established.
Do I have to enter anything?
No. You receive a complete footprint without entering anything. Adding bill readings improves the accuracy of specific parts.
Why is my “everything else you buy” figure so large?
Because across most sectors it genuinely is the largest share. Everything you purchase carried emissions before it reached you. This is often the surprise, and often where the opportunity lies.
In summary
This method converts your business payments into an estimated carbon footprint by identifying what each payment was for and applying an average carbon figure for that type of purchase. It covers the fuel you burn, the energy you buy, and the goods and services you purchase, across twelve categories. It does not capture refrigerant leaks, cash payments, industrial process emissions, or renewable energy contracts. Its purpose is to show you where your emissions come from so you know where to begin, not to produce an exact number.
Sources
- GHG Protocol Corporate Accounting and Reporting Standard, and its Technical Guidance for Calculating Scope 3 Emissions (WRI and WBCSD): the international rules for grouping and reporting emissions
- EXIOBASE 3: an international database of emissions across sectors of the economy
- UK DEFRA greenhouse gas conversion factors, applied where national equivalents are not published
- Eurostat energy price statistics
- National energy regulators, for supplier registers and grid emission factors
- PCAF: the standard used by banks and investors to record the strength of evidence behind a carbon figure