Carbon Footprint & Baseline (Scope 1 & 2): ESG Compliance

The baseline is the starting line — build it once, build it properly

Every credible ESG number a company reports traces back to one thing: a properly built carbon baseline. It is the greenhouse gas inventory for a chosen base year, the measured footprint that a SECR disclosure discloses, that a science-based target is set against, and that a net-zero roadmap measures progress towards. Get it right and it feeds every downstream deliverable without being redone each time. Get it wrong — or assemble it from estimates at the last minute — and every report, target and claim built on it is exposed the moment anyone checks the working.

A carbon footprint and baseline at this level covers Scope 1 and Scope 2. Scope 1 is the direct emissions from sources you own or control — the gas burned in your own boilers, the fuel used in vehicles you own. Scope 2 is the indirect emissions from the energy you buy, principally purchased electricity, and also purchased heat, steam and cooling. Together these are the substance of a SECR disclosure and the minimum reporting requirement under the TCFD-aligned rules. The value-chain emissions beyond your own operations — Scope 3 — are a separate, larger and harder exercise, and we treat them as their own piece of work rather than pretending a Scope 1 and 2 baseline covers them.

This page sets out how we build that baseline as a delivered, defensible piece of work: to the recognised methodology, on the official emissions data, with both the location-based and market-based Scope 2 figures, so it stands up to scrutiny and to independent assurance. It is the foundation for the SECR reporting and the net-zero roadmap that follow, and it is scoped by our ESG compliance team on the shape of your estate, not off a menu.

Built to the GHG Protocol, on the UK government conversion factors

A baseline is only defensible if it is built to a recognised methodology and calculated on the official data, and both matter to anyone who later has to rely on the number. We build the inventory to the GHG Protocol Corporate Standard — the globally recognised methodology for a greenhouse gas inventory, referenced directly by the UK government’s environmental reporting guidelines. That is not a stylistic choice; it is the standard that SECR and TCFD-aligned disclosures are constructed around, so building to it is what makes the baseline recognised and portable rather than a one-off of our own devising.

The starting point is the boundary: which sites, entities and activities are in scope. This is a decision, not a default, and it is where the ESG strategy work pays off, because the materiality assessment and the reporting requirements together set where the line sits. From there we gather the activity data — electricity, gas and other fuel consumption from your meters and invoices for Scope 1 and 2 — and convert it to tonnes of carbon dioxide equivalent using the UK government greenhouse gas conversion factors for company reporting. These are the official annual dataset, updated each year, that SECR and TCFD-aligned disclosures rely on. Using them, rather than a third-party estimate or an off-the-shelf calculator’s assumptions, is what makes the resulting figure defensible in a transaction, a tender or an assurance review.

The output is not a single headline number. It is the total footprint, split by scope; at least one intensity ratio — emissions normalised against a business metric such as turnover, floor area or unit of output, which SECR specifically requires and which is what lets you compare year on year and against peers; and the hotspots, the parts of the footprint that dominate it. That structure is deliberate, because it is exactly what a target and a roadmap are then built against. A baseline that gives you one number and nothing else tells you where you are but nothing about where to act; a baseline built properly tells you both.

Location-based and market-based Scope 2 — why we report both

The single most important technical decision in a Scope 2 calculation is that there are two figures, not one, and a company that reports only the convenient one is exposed. Under the GHG Protocol’s dual Scope 2 reporting method you calculate and report both a location-based figure and a market-based figure. The location-based figure uses the average emissions intensity of the grid you sit on — it reflects the physical electricity system, regardless of what you have contracted for. The market-based figure reflects the specific electricity you have chosen to buy: a green tariff, a power purchase agreement (PPA), or on-site generation each change it.

This is not an academic distinction — it becomes the crux the moment a company wants to reflect renewable electricity in its numbers. Buying renewable electricity, whether through on-site solar or a PPA, reduces your market-based Scope 2 emissions. It does not change your location-based figure, which still reflects the average grid. Report only the market-based figure and a company can make its electricity look near-zero; report both, as the method requires, and the picture is honest. That honesty is not just good practice, it is protection: the Competition and Markets Authority’s Green Claims Code targets exactly the kind of selective, flattering environmental claim that reporting only the market-based figure produces.

Two further caveats matter, and we are explicit about them from the outset. First, renewable electricity only touches Scope 2 — it does nothing for your Scope 1 fuel use or your Scope 3 value chain, which for most businesses are the larger part of the footprint. Second, the credibility of a low market-based figure depends on quality and additionality: a genuine on-site installation or a well-structured PPA carries far more weight than unbundled certificates bought to paper over the number. We build the baseline so that a PPA or on-site array counts where it genuinely should, in the market-based figure, and no further — which is the same discipline the net-zero roadmap applies when it treats renewables as one honest lever rather than the whole answer.

From data you hold to a number you can defend

The practical question every buyer asks is: what do you actually need from us, and how hard is this? The honest answer is that it depends on your data maturity, which is the single biggest driver of how quickly a baseline comes together. A company with clean half-hourly meter data and organised supplier records across a handful of sites is a very different job from one starting with paper invoices scattered across twenty. Both can be done; they are not the same amount of work, which is why we scope on the state of your data rather than quoting a flat figure that would mislead you either way.

What we need, in practice: for Scope 2, your purchased electricity consumption — half-hourly data where you have it, annual invoices where you do not — plus any purchased heat, steam or cooling. For Scope 1, your on-site fuel use: gas from your meters, any oil or LPG, and fuel used in vehicles you own or control. Where the data has gaps — a missing meter read, a site that changed hands mid-year, an estimated invoice — we fill them with documented, defensible assumptions rather than quiet guesses, and we record the methodology so the trail is auditable. That data trail is what makes the difference between a baseline that is straightforward to assure and one that falls apart under an ISAE 3410 greenhouse gas assurance review.

There is a real relief in doing this once, correctly. A company that crosses the SECR thresholds after a good year or an acquisition — meeting two of the three tests of 250 or more employees, turnover over £36 million, or a balance-sheet total over £18 million — suddenly has a disclosure due with its accounts and often nobody who owns the numbers. A baseline built properly the first time removes that scramble: the same inventory feeds this year’s disclosure, next year’s, the target and the roadmap, updated rather than rebuilt each cycle. And for the smallest energy users, the honesty cuts the other way — a low energy user that consumes 40,000 kWh or less in the reporting period is exempt from the detailed SECR disclosure but must still state that it qualifies in its directors’ report, and we will tell you if that is where you sit rather than build you an inventory you do not need.

The mistakes that make a baseline undefensible

Most published guidance treats building a carbon footprint as if it were arithmetic — plug in the numbers, apply the factors, done. In reality the failures are rarely in the maths; they are in the judgements, and they are exactly what an assurance review or a due-diligence process picks apart. Naming them up front is part of building the baseline right the first time.

The most common is an inconsistent or undocumented boundary — a footprint that quietly includes one leased site and excludes another, or that changes which entities are in scope from one year to the next, so the year-on-year comparison SECR requires is comparing two different things. The second is reporting only the market-based Scope 2 figure and omitting the location-based one, which flatters the number and, under the CMA’s Green Claims Code, edges towards a misleading claim. The third is treating a green tariff as zero carbon without disclosing that the market-based figure rests on unbundled certificates rather than genuine additionality. The fourth is filling data gaps with silent guesses rather than documented, defensible assumptions, so when an assurer asks how a missing meter read was estimated, there is no answer. And the fifth, quietly the most damaging, is confusing the scopes — booking a Scope 3 category as Scope 1, or missing purchased heat from Scope 2 — which a company new to this does easily; our explainer on Scope 1, 2 and 3 emissions is worth reading before the boundary is drawn.

We build against every one of these deliberately: a fixed, documented boundary; both Scope 2 figures as standard; additionality treated honestly; gaps filled with recorded assumptions; and the scopes kept clean. That discipline is what makes the difference between a baseline that is straightforward to assure and one that unravels under scrutiny. For a fuller walk-through of the method from boundary to intensity ratio, our guide on how to build a carbon baseline sets out the sequence step by step.

Where the baseline goes next

A baseline is a starting line, not an end in itself, and its whole value is what it enables. Once the Scope 1 and 2 footprint, the intensity ratio and the hotspots are in place, the rest of the programme follows in a defined order:

• The SECR reporting work turns the baseline into the statutory disclosure that goes in your directors’ report and is filed with your accounts — energy use, Scope 1 and 2 emissions, at least one intensity ratio and the efficiency narrative.
• The net-zero roadmap sets a target against the baseline and sequences the costed actions to hit it, with on-site solar or a PPA treated as an honest Scope 2 lever.
• The Scope 3 and supply-chain work extends the inventory into the fifteen value-chain categories, which for most businesses turn out to dwarf Scope 1 and 2 combined.
• The ESG strategy and materiality layer, ideally done first, is what set the boundary the baseline was built to in the first place.

Because carbon reporting is increasingly a commercial gateway as well as a compliance duty, a defensible baseline is also what unlocks tenders. A supplier bidding into the public sector — whether that is the Greater Manchester anchor institutions, the Leeds city-region economy or a central-government contract — is now routinely asked for its carbon footprint as part of a selection questionnaire, and a Carbon Reduction Plan under PPN 006 for the largest contracts starts from exactly this number. Building the baseline properly is therefore not only the foundation of the reporting; it is the thing that keeps a company eligible for work it would otherwise lose.

Getting started

The first step is a short scoping conversation. Tell us roughly how many sites and meters you have, and how your energy data currently looks — half-hourly, monthly invoices, or a box of paper — and we will tell you honestly what building your baseline involves and whether you are even in scope of the detailed SECR disclosure. From there the work is scoped on the number of sites, the meters and the maturity of your data, never priced off a menu, because a headline figure would mislead you. Use the enquiry form below to book that conversation; we respond within one working day.

Government sources, verified 2 July 2026: the UK government greenhouse gas conversion factors for company reporting (gov.uk), the GHG Protocol Corporate Standard, and the UK government environmental reporting guidelines including SECR (gov.uk).