1. Purpose of B Corp Impact Assessment

   The B Corp Impact Assessment (BIA) evaluates businesses across governance, workers, community, environment, and customer impact. Emissions tracking is key to meeting its climate-focused standards.

2. Why Emissions Tracking Matters

   Greenhouse gas (GHG) emissions data forms the basis for setting reduction targets and building effective climate strategies. Without it, companies can't meet B Corp's rigorous requirements.

3. Understanding Emissions Scopes

   • Scope 1: Direct emissions from company-controlled sources (e.g., vehicles, heating systems).

   • Scope 2: Indirect emissions from purchased energy (e.g., electricity).

   • Scope 3: Indirect emissions across the value chain (e.g., supplier activities, product disposal).

4. Tools for Emissions Reporting

   • The Greenhouse Gas Protocol (GHGP) sets global standards for tracking emissions.

   • Platforms like neoeco automate emissions reporting by integrating financial data with carbon metrics, reducing errors and saving time.

5. Best Practices

   • Use reliable tools to measure Scope 1, 2, and 3 emissions.

   • Centralise documentation for audits.

   • Update methods as reporting standards evolve.

Key takeaway: Accurate emissions tracking and reporting are essential for B Corp certification. Tools like neoeco simplify the process and ensure compliance with global standards.

Greenhouse Gas (GHG) Baselining 101: Demystifying Scope 1, 2 & 3 Emissions Measurement

Scope 1, 2 & 3 Emissions in the B Corp Framework

The B Corp framework uses the Greenhouse Gas Protocol (GHG Protocol) to classify emissions into three categories, or "scopes." This system helps businesses identify their carbon sources and apply a standardised approach to measuring emissions.

Understanding these scopes is a key requirement for B Corp certification, as they form the basis of a company's climate strategy. Each scope captures a different type of emission, whether directly controlled by the business or influenced through its operations and supply chain. Let’s break these down, starting with Scope 1 emissions.

Scope 1: Direct Emissions

Scope 1 emissions come directly from sources that a company owns or controls.

These include things like company-operated vehicles, on-site heating systems, and industrial processes. For example, a fleet of delivery vans produces Scope 1 emissions through the combustion of diesel or petrol, while gas boilers used for heating also fall into this category. Manufacturing businesses typically report higher Scope 1 emissions due to energy-intensive operations, whereas service-based companies tend to have lower levels. Even small businesses with something as simple as a company car or a gas heating system need to account for these emissions.

Scope 2: Indirect Emissions from Purchased Energy

Scope 2 emissions are tied to the energy a business buys and uses, such as electricity. While these emissions occur at the power plant where the energy is generated, they are directly linked to the company's energy consumption.

For most businesses, electricity bills are the main source of Scope 2 emissions. The carbon intensity of these emissions depends on factors like the energy supplier and the mix of renewable versus non-renewable energy in the national grid. To lower Scope 2 emissions, businesses can switch to renewable energy tariffs or invest in on-site renewable energy systems, like solar panels.

Scope 3: Value Chain Emissions

Scope 3 emissions cover all other indirect emissions across a company’s entire value chain, both upstream (before the product or service reaches the company) and downstream (after it leaves).

Upstream emissions include those from purchased goods and services, business travel using third-party vehicles, employee commuting, and waste generated during operations. For instance, the carbon footprint of a business trip taken via commercial air travel is a type of upstream Scope 3 emission. Similarly, emissions from the production of office supplies, raw materials, or equipment fall into this category.

Downstream emissions, on the other hand, occur after a product or service leaves the company’s control. These include emissions from the transportation and distribution of products, the way customers use the product, and its disposal or recycling at the end of its life.

For service-based businesses, managing Scope 3 emissions can be particularly complex. However, tools like neoeco and other sustainability platforms simplify the process by categorising financial transactions directly linked to Scope 3 emissions. These platforms can integrate with financial systems to automatically identify which purchases contribute to Scope 3 and which energy costs are part of Scope 2, making the reporting process much more efficient.

Measuring emissions across all three scopes is vital for achieving B Corp certification, as it ensures a comprehensive view of a company’s carbon footprint.

Tools and Methods for Measuring and Reporting Emissions

To accurately report emissions, you need reliable tools and methods to measure and document your Scope 1, 2, and 3 carbon footprint. Below, we’ll look at the standard frameworks that form the backbone of effective emissions reporting.

Standard Methods for Emissions Reporting

The Greenhouse Gas Protocol (GHG Protocol) is the go-to framework for measuring Scope 1, 2, and 3 emissions. It provides a consistent methodology, ensuring your B Corp assessment aligns with internationally recognised standards.

For additional verification, ISO 14064 outlines requirements for assurance and validation of emissions data. This is especially important when external validation is needed for B Corp certification or regulatory compliance.

In the UK, businesses must also adhere to frameworks like the Streamlined Energy and Carbon Reporting (SECR) requirements and the UK Sustainability Reporting Standard (UK SRS). These frameworks build on the GHG Protocol but include specific disclosure rules for UK-based companies. Similarly, Australian businesses follow the Australian Sustainability Reporting Standards (ASRS 2).

Using these methodologies ensures consistency across organisations. When everyone measures emissions the same way, performance comparisons and progress tracking become more meaningful. However, manually implementing these standards can be labor-intensive and complex.

neoeco: Specialised Software for Emissions Reporting

neoeco simplifies emissions reporting by integrating financial data with carbon metrics. Designed for accounting firms supporting B Corp candidates, neoeco connects directly with existing financial systems, streamlining sustainability accounting.

The platform automates the mapping of transactions from accounting tools like Xero, Sage, and QuickBooks to emissions categories recognised under the GHG Protocol and ISO 14064. For Scope 2 emissions, electricity bills can be directly integrated, eliminating the need for manual data entry.

neoeco also features audit-ready controls and a secure evidence management system. This ensures supporting documentation is stored safely, completion statuses are tracked, and auditors can access reports directly. These features are particularly useful during B Corp assessments, where verifiers need to review your emissions data and methodologies.

The software operates on a monthly subscription model with no long-term contracts. It offers a 30-day free trial with full feature access. For businesses starting with basic carbon reporting, the Carbon-Only Plan costs £399 per year, including ledger integration, GHG Protocol methodology, and SECR-ready templates.

For organisations aiming to align their financial and sustainability strategies, neoeco’s financially-integrated sustainability management approaches provide a deeper understanding of how carbon accounting fits into broader business operations.

Comparing Reporting Tools

Here’s a comparison of how specialised platforms like neoeco stack up against manual or generic methods:

Manual spreadsheets are still widely used but come with risks. Errors in data entry, formulas, and version control can compromise the reliability of your B Corp assessment. Preparing audit documentation also becomes a tedious and time-consuming task.

Generic accounting software is great for financial data but lacks the sustainability focus needed for emissions reporting. Converting financial transactions into carbon metrics often requires manual work and expertise, increasing the chance of errors.

Specialised platforms like neoeco bridge this gap by integrating financial accuracy with sustainability expertise. Automated mapping of transactions to emissions categories reduces manual effort and improves data quality. This is especially helpful for tracking complex Scope 3 emissions. Learn more about managing Scope 3 emissions effectively in real-time scenarios.

neoeco also ensures data security with SOC 2 and GDPR compliance, protecting all financial and operational information.

Choosing the right tool depends on your organisation’s size, complexity, and resources. However, for businesses serious about B Corp certification, specialised software like neoeco often delivers better results than manual or generic methods.

Best Practices for Continuous Improvement and Audit Readiness

Achieving and maintaining B Corp certification requires a commitment to reducing emissions over time and ensuring transparent, precise reporting. To meet these standards, it's essential to establish strong systems that prioritise ongoing improvement and keep you prepared for audits. These practices build on the measurement frameworks previously discussed, ensuring your reporting stays adaptable and ready for scrutiny.

Methods for Reducing Emissions Over Time

Accurate emissions measurement is the cornerstone of any strategy to reduce your environmental impact. Start with reliable baseline data - inaccurate measurements can derail progress and make it difficult to set realistic targets. Using trusted financial ledger data as the basis for carbon accounting ensures precision and strengthens the foundation of your tracking efforts.

Incorporate emissions data into business planning. By including carbon metrics in your regular financial reports, decision-makers can naturally factor in environmental considerations. Tools that automatically match financial transactions with relevant carbon data can make this process faster and more accurate.

Stay updated as emissions factors and methodologies evolve. This is especially critical for organisations aiming to comply with multiple frameworks like GHGP, SECR, and UK SRS. A unified system can help manage these changes seamlessly.

Keeping Audit-Ready Documentation

Alongside reducing emissions, maintaining thorough and accessible documentation is vital for audit readiness.

Boost transparency and accountability through control reconciliations. Keep detailed records of how emissions are calculated, including the assumptions used and how any data gaps are addressed.

Use checklists to track reporting tasks and avoid last-minute stress. Document the status of each emission source and maintain version control for all calculations, ensuring nothing is overlooked.

Centralise all compliance-related files and evidence. A dedicated hub for documentation simplifies the audit process by allowing auditors to quickly find what they need.

Provide secure, direct access for auditors. This not only streamlines the audit process but also demonstrates a commitment to transparency.

Standardise your documentation practices by using templates and policy builders. Clear, consistent formats make it easier for auditors to review your methods and evidence.

The organisations that excel in B Corp certification view audit readiness as an ongoing effort, not just a once-a-year task. By implementing systems that support continuous improvement and meticulous documentation, you create a strong foundation that aligns with long-term sustainability goals while meeting B Corp’s rigorous standards.

Key Takeaways for B Corp Climate Action

When it comes to meaningful climate action, achieving and maintaining B Corp certification hinges on a few essential strategies. Here's what businesses need to focus on:

To begin with, comprehensive emissions reporting - covering Scope 1, 2, and 3 emissions - is non-negotiable. This forms the foundation for effective climate initiatives and is critical for B Corp certification.

Forward-thinking companies are now integrating sustainability data directly from their financial systems. This not only eliminates the risk of manual errors but also ensures that the data is grounded in financial records that auditors can trust.

In this context, specialised sustainability software has become indispensable. Platforms like neoeco simplify the process by automating the mapping of financial transactions to recognised frameworks like GHGP and ISO 14064. This approach eliminates the need for unwieldy spreadsheets and creates audit-ready records.

"We evaluated multiple ESG tools and felt more confused each time. neoeco cut through the noise - the only platform that connects financials to sustainability with LCA-level accuracy."

• neoeco

Another factor that sets successful B Corp candidates apart is their focus on real-time monitoring and continuous improvement. Tools like real-time dashboards and automated tracking help identify emission reduction opportunities as they arise, rather than waiting for annual reviews to uncover issues. This proactive mindset aligns perfectly with B Corp's emphasis on ongoing progress.

Finally, audit readiness plays a crucial role. Centralised systems not only simplify the review process but also provide clear evidence of a company's systematic approach to climate action.

For businesses aiming for B Corp certification, the way forward is clear: adopt unified reporting frameworks. These frameworks not only meet requirements like SECR, UK SRS, and voluntary VSME standards but also ensure that climate actions contribute meaningfully to broader sustainability objectives.

FAQs

How can businesses accurately track and manage Scope 3 emissions despite their complexity?

Tracking and managing Scope 3 emissions can be tricky because they stem from indirect sources, such as a company's suppliers, distributors, and even the end-users of its products. These emissions are often harder to measure and control, as they span the entire value chain. To tackle this, businesses should begin by identifying and prioritising the largest emission sources within their value chain. The focus should be on areas that either have the most significant environmental impact or where reliable data is more accessible.

Specialised tools like sustainability accounting software can make this process much easier. These tools automate data collection and align it with established frameworks like the GHGP or ISO 14064. For instance, platforms such as neoeco connect directly to financial data, enabling businesses to create accurate, audit-ready reports without the hassle of manual spreadsheets. This not only ensures regulatory compliance but also reduces the administrative workload, allowing companies to concentrate on meeting their sustainability targets more efficiently.

How does the Greenhouse Gas Protocol support B Corp certification?

The Greenhouse Gas Protocol offers a globally accepted framework for tracking and managing carbon emissions, forming a key part of the B Corp Impact Assessment. It breaks emissions into three categories: Scope 1, 2, and 3, helping organisations identify their direct emissions, those from purchased energy, and emissions across their value chain.

For accounting firms in the UK and Australia, platforms like neoeco streamline this process. These tools can automatically link financial transactions to the relevant emissions categories outlined by the Greenhouse Gas Protocol. This approach delivers precise, finance-grade carbon data and generates audit-ready reports, making sustainability reporting both simpler and more dependable.

Why should businesses link financial data with carbon metrics for emissions reporting?

Connecting financial data with carbon metrics allows companies to produce precise, finance-grade emissions reports that align directly with their financial statements. This approach ensures the outputs are reliable, audit-ready, and meet compliance standards - perfect for presenting to boards or stakeholders with full confidence.

By automating the process of linking transactions to established emissions categories, businesses can streamline their workflows, minimise errors, and concentrate on implementing meaningful sustainability strategies. It also strengthens the connection between finance and sustainability, enabling organisations to adapt effectively while meeting both regulatory demands and voluntary reporting expectations.

Related Blog Posts

• Primary vs Secondary Data in Scope 3 Emissions

• How Activity-Based Data Improves Scope 3 Reporting

• How LCA Supports Scope 3 Emissions Reporting

• How Traceability Systems Simplify Scope 3 Reporting