MIND THE GAP: ARE YOU STEPPING INTO AVOIDABLE CARBON FOOTPRINTING PITFALLS?

Boundary and Scope Challenges

One of the first steps when calculating a carbon footprint is setting the boundary and defining the scope. In practice, setting accurate emissions boundaries is rarely straightforward. Misinterpretations often arise because the frameworks themselves (such as the GHG Protocol) are complex, and because a company’s operations rarely fit neatly into a single model. The greatest risk lies in the nuanced areas where ownership, control, and responsibility are shared or unclear.

Examples include:

• Co-located assets with shared ownership – determining which entity reports which emissions when operational control is joint or changing.
• Third-party operated infrastructure – where the owner of an asset (e.g., a pipeline or terminal) may not operate it, risking emissions being overlooked under a purely control-based boundary.
• Power purchase agreements (PPAs) – where emissions linked to purchased electricity can be missed without a detailed understanding of contractual terms and sourcing.

In these cases, traditional control-based methods alone are insufficient. A more robust approach applies clear decision logic that considers legal ownership, financial exposure, and influence over emissions-related decisions. Tools such as decision trees or attribution flowcharts help ensure consistency, while aligning with GHG Protocol guidance.

Without implementing structured reporting logic and GHG Protocol guidance, organisations risk both under-reporting and over-reporting emissions in their climate disclosures, undermining the credibility and accuracy of their ESG reporting. Companies invested in their sustainability journey should incorporate boundary reviews into their strategies and practices. By anticipating these boundary-setting pitfalls, companies can produce more defensible inventories and avoid confusion over emissions responsibility.

Completeness, Exclusions, and Accurate Categorisation

Failure to ensure that your carbon footprint inventory fully represents all GHG emissions associated with your business, with minimal exclusions and accurate categorisation of emissions sources, is likely to undermine your carbon accounting and sustainability reporting.

In our experience, the main reasons for the incompleteness of datasets are an overreliance on unchallenged assumptions and a passive approach to updating methodologies over time. For both of these issues, companies tend to maintain certain assumptions or methodologies, year on year, without critically evaluating their accuracy, relevance, or limitations. This can lead to misleading conclusions.

To address these common greenhouse gas reporting pitfalls, companies should regularly audit their carbon reporting methodologies, challenge embedded assumptions, and update their emissions datasets to achieve the most accurate and complete carbon emissions inventory.

One of the more common and often accidental pitfalls is the involuntary exclusion or mis-categorisation of items within the inventory. While an initial assessment of material emission sources often manages to capture a majority of sources – there are a few key ones that can be overlooked:

• Scope 1 process-based emissions are often overlooked. These largely sector and process specific emissions can include the CO2 emitted from certain chemical reactions. Examples of this include smelting, chemical manufacturing or cement production which release CO2.
• There are 5 separate categories for vehicle emissions, which can lead to confusion regarding the classification of these emissions, specifically when distinguishing between direct emissions and business travel. The Greenhouse Gas Protocol states that emissions from transportation in vehicles owned or controlled by the reporting company should be accounted for in Scope 1 (for vehicles that consume fuel) and Scope 2 (for vehicles that consume electricity), while there are Scope 3 categories for emissions  third party owned vehicles for business travel (category 6), employee commuting (category 7) and leased vehicles (category 8).
• It is common that companies generate their own electricity either via renewables or fuel generators - selling any excess to the grid. Companies often explore deducting these emissions from Scope 1, however the emissions associated with the generation of this electricity should be wholly accounted for.
• Site-level reporting frequently omits standby generators, often because they are used sporadically and thus excluded by design in existing methodologies.

Even for companies that have an established calculation methodology, the regular re-evaluation of relevant emissions sources is a key activity to ensure that all elements are being captured.

Emission Factors and Global Warming Potential (GWP)

It is critical for accurate carbon footprinting and ESG disclosure that emission factors are updated and relevant; emission factors vary significantly by geography, time period, and regulatory environment. The static application of emission factors, or the blending of datasets from inconsistent sources leads to inaccurate emission calculations - when applied without this context, they compromise data integrity. While the easiest option may be to use emissions factors from the previous year’s calculations, a review and update of emissions factors should be completed near the beginning of the calculation process to ensure that all emission factors are relevant to the reporting period.

Global Warming Potential (GWP) in GHG Inventories: GWP values vary from 1 for carbon dioxide to 24,300 for sulphur hexafluoride. This demonstrates that not all greenhouse gases have the same environmental impact, and even small quantities can significantly affect your corporate GHG inventory and carbon disclosures. A common error within some inventories is the inclusion of outdated GWP figures in the Scope 1 refrigerant calculations. At the time of writing, the most recent report is the 6th Assessment report (AR6) which should be used for any reporting after this was published.

Documentation, Evidence Trail and Auditability

As carbon disclosures become central to stakeholder trust and investor confidence, the absence of a robust audit trail is more than a technical gap - it’s a commercial pitfall. Often, carbon reporting is confined to sustainability teams, with tacit knowledge, assumptions, data sources, and methodologies captured in informal documents or embedded in individual knowledge rather than integrated into formal data record keeping.

Without a transparent record of how emissions were calculated - what was included, excluded, estimated, or assumed - it becomes impossible to accurately track progress and trust reported values. Organisations committed to credible carbon reporting should adopt record keeping practices on par with financial reporting. This includes version-controlled methodologies, evidence logs, and audit-ready datasets. Beyond compliance, this enables strategic insights, meaningful reduction strategies, reduced cost of capital in ESG-linked financing, and strengthens supplier engagement by bringing transparency and consistency to reporting.

Reducing Assumptions and Estimations with High-Quality Emissions Data

It is often the case that if companies have a lack of available data, they may opt to use averages or assumptions to fill in the gaps of their datasets. Over time (and in the spirit of continual improvement), it is recommended that companies gather data that supports moving away from estimates and assumptions. This exercise could capture details such as for example: types of company owned vehicles, their fuel types and precise amounts of fuel consumed.

Tracking progress against reduction targets are crucial to any company pursuing decarbonisation of their operations. Limiting a disclosure to only location-based emissions (using national energy mix averages) can therefore be counterintuitive especially when a company takes steps to e.g procure a renewable electricity supply. The disclosure of market-based (supplier specific energy supply) emissions allows for a different perspective on a company’s Scope 2 emissions. It is commonplace in most countries that energy companies disclose or provide their own emission factors (CO2 equivalents per energy unit) based on their energy mix.

Accounting for Organisational Changes in GHG Emissions Baselines

Acquisitions, divestments and other structural changes are a normal part of the evolution of a business. Not accounting for organisational changes, such as mergers and acquisitions, in your GHG inventory calculations and emissions baselines can hinder your sustainability reporting and risk non-compliance with evolving ESG disclosure requirements. As these take place, it is advisable to monitor and adjust the inventory base year accordingly so that meaningful comparisons and progress can be tracked ‘like for like’. The GHG protocol defines two options for base year calculations – the fixed base year and rolling base year.

The fixed base year approach keeps a consistent starting point from the past to compare current emissions against. When companies go through major changes like buying or selling parts of their business, they need to update both their starting point and current emissions data to make sure they're comparing "apples to apples." There are two ways to do this updating: the "all-year option" (which counts emissions from bought companies for the whole year) or the "pro-rata option" (which only counts emissions from part of the year after the change happened). The all-year method is much simpler because both approaches give you the same final answer, but the all-year method only requires one calculation while the pro-rata method needs two separate calculations. As the guidance explains, "there have to be two recalculations when using the pro-rata option, after which the resulting time series of emissions and thus the comparison over time, is equivalent to the all year option, which only requires one recalculation. The all-year option is thus clearly more practicable than the pro-rata one."

The rolling base year approach sets a new starting point every year, comparing current emissions only against the previous year. This method tries to focus on emissions the company actually controlled, avoiding data from before acquisitions or after sales. However, unlike the fixed base year where both calculation methods give identical results, the rolling base year produces different outcomes depending on which method companies choose. As the guidance explains, "each method has different implications in terms of whether the company includes emissions from sources that were not owned or controlled by it" and "the choice of method can have a bearing on which emission sources are included or excluded from the overall emissions comparison over time." This makes transparency crucial when setting emissions targets, since different methods can affect whether goals are met.

When companies undergo acquisitions, divestments, or other structural changes, failing to properly recalculate emissions baselines can significantly distort their sustainability performance tracking. Without accurate base year adjustments, organisations may report misleading progress toward emissions targets or miss genuine improvements masked by structural changes. Using fixed or rolling approaches ensures that emissions comparisons remain meaningful and defensible as organisation evolves.

Bureau Veritas: Your Partner for Carbon Footprinting Support

In today’s highly regulated business environment, credible carbon accounting and reliable GHG emissions reporting are essential for regulatory compliance, investor confidence, and effective corporate sustainability strategies. As this article has shown, the road to accurate Scope 1 and 2 reporting is fraught with nuanced pitfalls, from overlooked emission sources and outdated emission factors to boundary misapplications and insufficient documentation. These challenges, if left unaddressed, can undermine the integrity of a company’s climate disclosures and erode trust with regulators, investors, and stakeholders. By proactively identifying and managing these complexities, organisations not only improve their compliance posture but also gain the clarity needed to pursue meaningful decarbonisation. Awareness of these challenges is the first step toward overcoming them and toward ensuring that climate action is grounded in data that is complete, accurate, and decision-ready.

As an experienced third-party Assurance provider, Bureau Veritas verifies and calculates over 100+ ESG disclosures annually (for companies ranging from SME’s to multinational corporations). We offer a unique cross-sector insight into potential gaps and pitfalls within corporate disclosures. This article is the first in a series which aims to offer a unique insight aimed at all companies irrespective of their current sustainability progress or size and aid with a company’s continual improvement and refinement of their disclosures.

Given our expertise, Bureau Veritas is uniquely positioned to help organizations of all sizes and in all sectors with their carbon footprinting needs, from scoping and calculation to assurance and verification. Through our tailored support, we deliver outcome-driven solutions, including: 

• Carbon Footprint Scoping and assessment of relevant GHG emissions sources
• Scope 1, Scope 2, and Scope 3 carbon emissions calculations
• Third-party Carbon Footprint Verification services for regulatory and ESG compliance
• Science-based emissions reduction target setting
• Strategic decarbonisation and transition planning
• Comprehensive reporting and disclosure support for ESG and sustainability frameworks

Wherever you are on your carbon accounting journey, Bureau Veritas is here to support you at every stage. From initial scoping and emissions calculations to third-party verification and actionable decarbonisation strategies.