Why is the carbon footprint important?
The carbon footprint is a key instrument in climate protection to make emissions measurable, comparable and controllable. It helps to identify hotspots and develop targeted reduction measures. It has different advantages depending on the area of application:
For companies
- Basis for sustainability reports (e.g. CSRD, ESRS, GRI). See also: Creating a sustainability report
- Helps with the strategic decarbonization of processes and supply chains. See also: Insetting and climate hardware
- Improves risk management and positioning vis-à-vis investors, customers and partners. See also: Climate risk analysis
For politics and society
- Measurement basis for government climate targets and CO₂ pricing. See also: Guidelines for the CO₂ market
- Important data source for climate policy, funding programs and investment decisions.
How is a carbon footprint calculated?
The calculation of a carbon footprint is based on the systematic recording and evaluation of all relevant emissions throughout the life cycle of a product, organization or activity. A distinction is made between direct and indirect emissions - divided into so-called scopes in accordance with the GHG Protocol (Greenhouse Gas Protocol).
The three scopes at a glance
- Scope 1: Direct emissions from own sources, e.g. from heating systems, company-owned vehicles or production facilities.
- Scope 2: Indirect emissions from purchased electricity, heating or cooling - i.e. emissions that arise from energy generation outside the company.
- Scope 3: Other indirect emissions along the entire value chain, e.g. from suppliers, purchased goods and services, business travel, employee mobility or the use and disposal of products. Scope 2 simply explained
Calculation approach
Emission factors are generally used for balancing, which are multiplied by the respective consumption data (e.g. liters of fuel × CO₂ factor in kg/l). The accuracy of the balance depends on the data quality and the choice of emission factors.
- Top-down: Use of aggregated data from company reports or national statistics - suitable for a quick overview.
- Bottom-up: Collection of detailed data at process or product level - for a more precise and specific balance.
- LCA-based: Holistic life cycle approach in accordance with ISO 14040/44, in which all environmental impacts of a product or process are considered from raw material extraction to disposal. See: LCA explained clearly
The choice of the appropriate approach depends on the objective, data availability and resources. Further details on choosing the right method, typical challenges and sample calculations can be found here: Methods of CO₂ balancing
CO₂ quick calculator
Rough estimate: Enter your consumption to calculate your company's annual CO₂ emissions.
Tools & software for CO₂ balancing
Digital solutions considerably simplify the creation and maintenance of a CO₂ balance sheet. Depending on the size of the company and its objectives, different tools and platforms are available - from simple Excel templates for beginners to automated SaaS solutions for complex requirements.
- Standardized CO₂ calculators: For small organizations or initial estimates, e.g. Ecocockpit.
- Accounting software: Integrates emissions data, scope distribution, benchmarks and reports - examples: Plan A, Persefoni, Multiplye, Emitwise.
- ERP and API connections: For scalable, automated processes in a corporate context, for example with Salesforce Net Zero Cloud or Microsoft Sustainability Cloud.
When choosing a tool, criteria such as scalability, integration into existing systems, coverage of Scopes 1-3 and compatibility with reporting standards (e.g. GHG Protocol, CSRD) should be taken into account.
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You can find information on selection criteria, best practices and pitfalls when choosing a tool in the article: What start-ups do wrong with CO₂ accounting
Measures to improve the CO₂ balance sheet
Creating a carbon footprint is only the first step - the decisive factor is the consistent implementation of concrete reduction measures. Companies can use various levers to sustainably reduce their emissions and achieve their climate targets:
- Increasing efficiency: Reducing energy and resource consumption, e.g. through optimized production processes, digitalization or improved logistics.
- Switching to renewable energies: Using electricity and heat from renewable sources such as solar and wind energy, for example via long-term energy contracts (PPAs).
- Sustainable product development: Integration of ecological criteria and life cycle analyses (LCA) in the early development phase.
- Circular economy: Promotion of recycling, reuse and sustainable use of materials to reduce waste and emissions.
- Insetting: Investing in emission reductions within the company's own supply chain or corporate processes (e.g. through sustainable agricultural projects).
- Mobility concepts: Promoting sustainable business travel, electromobility and home office arrangements.
- Compensation (offsetting): Offsetting unavoidable emissions through certified climate protection projects - always as the last option after avoidance and reduction.
Important: The effectiveness of all measures should be reviewed regularly and progress should be documented transparently to enable continuous improvements.
You can find a comprehensive overview of specific measures and strategies for reducing Scope 3 emissions here: Decarbonizing Scope 3 Emissions - Insetting and Climate Hardware .
Further insights into strategic approaches to reducing emissions through long-term energy contracts can be found in this article: Corporate PPAs - What sustainability managers need to know .
CO₂ compensation and certificates
Simulate CO₂ offsetting
Compare different types of offsetting: Nature-based, biochar, mineralization/technical removal.
CO₂ offsetting enables companies to offset unavoidable emissions. However, it should only be used after consistent avoidance and reduction, as required by current regulations and decarbonization strategies.
Forms of offsetting:
- VoluntaryCarbon Market (VCM): companies offset emissions voluntarily to support their sustainability goals and improve their image.
- Mandatory markets (e.g. EU ETS): Legally prescribed emissions trading systems that oblige certain sectors to offset.
Quality features of good offsetting projects:
- Certification according to recognized standards (e.g. Gold Standard, VCS, Plan Vivo).
- Verifiable, additional emission reductions (additionality)
- Long-term effectiveness, regular review and contribution to the UN Sustainable Development Goals (SDGs)
- Transparency and avoidance of double counting in accordance with current principles such as the Oxford Principles
- Monitoring and evaluation by third parties such as Sylvera
Typical offsetting projects include reforestation, promotion of renewable energy, energy efficiency measures and sustainable land use.
In light of increasing regulatory requirements and growing criticism of greenwashing, it is important to ensure integrity and transparency in carbon offsetting.
This article provides critical insights into the risks and challenges of CO₂ offsetting: CO₂ certificates - risks in voluntary markets .
For an in-depth look at the advantages and disadvantages of offsetting and reducing emissions, we recommend the following article: CO₂ offsetting or CO₂ reduction for companies - which makes more sense?
- What applies to whom? Statutory CO₂ prices and emissions trading systems usually only affect energy-intensive industries. In SMEs, CO₂ is almost always offset voluntarily - as part of your sustainability strategy or because customers demand it.
- Market development: The quality and prices of carbon credits fluctuate greatly (2025: from USD 5 to USD 500 per tonne). At the same time, regulatory requirements are increasing (e.g. CBAM, EU Green Claims Directive, EU Carbon Removal Certification Framework).
- Compliance vs. voluntary offsetting: Only a few companies are obliged to purchase certificates (e.g. importers under CBAM from 2026 or certain sectors in the EU ETS2 from 2027). All others can offset voluntarily to meet climate targets and ESG requirements.
- What should you look out for? Only high-quality, independently assessed projects will have a real impact and protect you from reputational risks ("greenwashing"). Pay attention to due diligence, evidence and transparency with providers.
- Practical tip: Develop a carbon credit procurement strategy - plan strategically and on the basis of clear criteria (guidelines e.g. VCMI, ICVCM, SBTi) instead of making individual purchases.
Get support for the optimal strategy and the right market - for maximum impact and compliance security.
Practical example: My CO₂ balance sheet 2024
Transparency is important to me - even when it comes to my own emissions. With MULTIPLYE, the CO₂ analysis tool that I developed with my team, I record my company's emissions automatically and in real time.
Annual balance sheet 2024: 1.77 t CO₂e
420 kg CO₂e (24%)
369 kg CO₂e (21%)
278 kg CO₂e (16%)
195 kg CO₂e (11%)
505 kg CO₂e (28%)
The true cost of my CO₂ emissions
| UBA damage costs 237€/t social costs |
420 €/year |
| EU ETS market price 85€/t current trading price |
150 €/year |
| Premium compensation 120€/t for BBB projects |
212 €/year |
Special features of my balance sheet
- Focus on Scope 3: As a service provider, hardly any direct emissions
- Scope 1: None (no company car, no own office)
- Scope 2: 0 kg CO₂ (100% green electricity/heat pump)
- Mobility: Exclusively fossil-free (rail, public transport, bicycle)
- Cloud: Google Cloud (carbon neutral)
My experience:
- Automation is the key: Automated data collection saves 90% time - the hotspots are crucial
- Don't underestimate Scope 3: Service providers also have relevant emissions
- Transparency creates trust: Customers appreciate open communication
- Start small: The first balance sheet doesn't have to be perfect
📉 My goal: an annually decreasing footprint, documented in a comprehensible way
This experience flows directly into my advice - for solutions that work in practice.
Sustainability consultant for companies & start-ups
With over 10 years of experience in ESG and tech strategies, he supports companies in their entry into the carbon footprint.
About the person
FAQ on the CO₂ balance sheet
How often should a carbon footprint be prepared?
Ideally annually in order to continuously monitor emissions, measure progress towards reduction targets and initiate measures in good time. For many companies, annual reporting is also mandatory due to regulatory requirements (e.g. CSRD).
What data is required for carbon accounting?
Data required includes consumption data (electricity, heat, fuel), transportation routes, raw material consumption, production volumes and supplier data. High data quality and completeness are crucial for the informative value of the balance sheet.
What are the most common errors when preparing a carbon footprint?
Common errors include incomplete data collection, missing or incorrect scope 3 data, incorrect allocation of scopes and the use of outdated or inappropriate emission factors. A lack of regular updates can also lead to inaccurate results.
What is the difference between Scope 1, Scope 2 and Scope 3 emissions?
Scope 1: Direct emissions from own sources (e.g. company vehicles, heating systems).
Scope 2: Indirect emissions from purchased energy (e.g. electricity, district heating).
Scope 3: Other indirect emissions along the value chain (e.g. business travel, purchased goods and services, use of products sold).
Do small and medium-sized enterprises (SMEs) also have to prepare a carbon footprint?
There is currently no general legal obligation for SMEs. However, there is increasing pressure from stakeholders, customers and suppliers to create transparency about their own emissions. In addition, future regulations (e.g. expansion of the CSRD) may also affect SMEs.
What are the benefits of a carbon footprint for companies?
A CO₂ balance sheet creates transparency, supports compliance with regulatory requirements, improves image, helps to identify potential savings and strengthens competitiveness.
How long does it take to prepare a CO₂ balance sheet?
The duration varies depending on the size of the company, data availability and complexity. Small companies can create an initial balance sheet in a few weeks, while larger organizations need several months.
What role do emission factors play in CO₂ balancing?
Emission factors are key figures that indicate the CO₂ emissions per unit of consumption (e.g. kg CO₂ per liter of diesel). They are essential for converting consumption data into CO₂ equivalents.
What is the difference between a carbon footprint and a life cycle analysis (LCA)?
A carbon footprint focuses on greenhouse gas emissions (in CO₂ equivalents), while an LCA comprehensively assesses all environmental impacts of a product or process over the entire life cycle, e.g. including water consumption and biodiversity.
How can I record Scope 3 emissions if a lot of data is missing?
Recording Scope 3 emissions is often challenging. It is advisable to start with the most important categories, use estimates based on industry benchmarks and gradually improve the data quality.
What are the legal requirements for CO₂ accounting?
In the EU, companies above a certain size are required by the CSRD to disclose their sustainability and climate data, including carbon footprints. There are also other national and international regulations and standards.
How can a CO₂ balance sheet contribute to cost savings?
By identifying potential energy and resource savings, companies can reduce operating costs and improve their environmental footprint at the same time.
Which software or tools are suitable for CO₂ balancing?
There are various tools, from simple Excel templates to specialized SaaS platforms such as Plan A, Persefoni or Emitwise, which can be used depending on the size of the company and its requirements.
How can I communicate the results of the carbon footprint?
The results can be presented transparently in sustainability reports, on the company website or in stakeholder dialogs. Comprehensible and credible communication is important.
Which greenhouse gases are taken into account?
In addition to CO₂, other greenhouse gases such as methane (CH₄) and nitrous oxide (N₂O) are also included in the balance. These are converted into CO₂ equivalents (CO₂e) based on their global warming potential.
How accurate must the data be?
Estimates are often unavoidable, especially for Scope 3 emissions. It is important to document the assumptions transparently and gradually improve the data quality.
Who can create a CO₂ balance sheet?
CO₂ balances can be prepared internally by trained employees or externally by specialized service providers and consultancies.
How is double counting handled?
To avoid double counting, it is important to clearly define the system boundaries and clearly assign emissions to the respective scopes.
What are typical challenges in data collection?
Challenges often include decentralized data collection, missing interfaces to suppliers or incomplete consumption data. Centralized data management can help.
How does the CO₂ balance develop over time?
Annual CO₂ balances make it possible to track the development of emissions over time and evaluate the effectiveness of measures.
What standards and guidelines are there?
Important standards are the Greenhouse Gas Protocol (GHG Protocol), ISO 14064 and DIN EN 16258 for transportation emissions.
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