Carbon isn't side work anymore—it's operational hygiene with a price tag.
Whether you're reporting to SEBI under BRSR, preparing for EU CBAM tariffs starting in 2026, or simply trying to win contracts with sustainability-conscious buyers, accurate carbon measurement is non-negotiable.
This guide cuts through the jargon and shows you exactly what to measure, how to measure it, and what to do with the numbers once you have them.
Understanding Carbon Markets
Carbon trading operates through two distinct market systems:
Compliance Markets
Government-mandated systems where organizations must buy permits to cover their emissions. Examples include the EU ETS (Emissions Trading System) and California's cap-and-trade program.
Voluntary Carbon Markets (VCM)
Companies voluntarily purchase carbon credits to offset emissions beyond regulatory requirements. India's Carbon Credit Trading Scheme (CCTS), launched June 2023, operates as a hybrid system.
The Three Scopes: Where Your Emissions Hide
Carbon accounting divides emissions into three categories based on control and ownership:
Scope 1: Direct Emissions You Own
These are emissions from sources you directly control:
- Company vehicles: Fuel burned in cars, trucks, forklifts
- Generators and boilers: Diesel or natural gas combustion on-site
- Refrigerants: HFC, CFC leaks from air conditioning units
- Process emissions: Chemical reactions in manufacturing
Scope 1 is usually the easiest to measure because you control the fuel purchases and equipment.
Scope 2: Purchased Electricity
Emissions from electricity you buy from the grid. Even though the power plant burns the coal or gas, you're accountable for the emissions because you triggered the demand.
Key data point: Monthly electricity consumption in kWh from your utility bills.
If you purchase renewable energy certificates (RECs) or have on-site solar, you can reduce your Scope 2 footprint significantly.
Scope 3: Everything Else in Your Value Chain
This is the big one—and the hardest to track. Scope 3 includes all indirect emissions from your supply chain and product lifecycle:
- Purchased materials: Emissions embedded in raw materials and components you buy
- Logistics: Transportation by third-party carriers (inbound and outbound)
- Business travel: Employee flights, rental cars, hotels
- Waste disposal: Emissions from landfills, incineration, recycling
- Employee commuting: Travel to and from work
- Use of sold products: Emissions during product usage by customers
- End-of-life treatment: Disposal of products after use
For most companies, Scope 3 represents 70-90% of total emissions. It's also where you have the least direct control but the most influence through supplier partnerships and design choices.
Setting Your Boundary: What Goes In, What Stays Out
Before you start measuring, define your carbon accounting boundaries:
Organizational Boundary
Which entities do you include? Headquarters only? All subsidiaries? Joint ventures? Use either equity share (based on ownership percentage) or operational control (all facilities you manage).
Operational Boundary
Which scopes and categories? Most start with Scope 1 and 2, then gradually add priority Scope 3 categories (like purchased goods and logistics).
Time Boundary
Financial year or calendar year? Most align with fiscal reporting for simplicity.
Why Carbon Matters Now in India
Carbon measurement has shifted from voluntary ESG reporting to regulatory mandate and market requirement:
- BRSR mandatory disclosure: Top 1,000 listed companies must report GHG emissions (Scope 1, 2, and Scope 3 where applicable)
- CCTS launched June 2023: India's Carbon Credit Trading Scheme enables companies to trade verified emissions reductions
- EU CBAM begins 2026: Carbon tariffs on imports mean exporters must provide accurate embedded carbon data or face penalties
- Buyer requirements: Multinational buyers increasingly demand Scope 3 data from suppliers
Data Collection: What You Actually Need to Track
Stop overcomplicated spreadsheets. Focus on these core data points:
Electricity
Monthly kWh from utility bills. Note grid vs. renewable sources separately.
Fuels
Liters of diesel, petrol, LPG, CNG. Track vehicle fuel, generator fuel, and heating fuel separately.
Refrigerants
Type and kg of refrigerant refilled annually (AC, chillers, cold storage).
Business Travel
Flight km by class, hotel nights, rental car km from expense reports.
Fleet
Vehicle km or fuel consumption for company-owned vehicles.
Freight
Tonne-km by mode (road, rail, air, sea) from logistics invoices.
Purchased Materials
Spend data by category (steel, plastic, electronics, etc.) or supplier-provided carbon data.
Waste
Tonnes by type (landfill, incineration, recycling) from waste hauler records.
Carbon Credits & Offsetting: When and How
Carbon credits represent verified emissions reductions. One credit equals one tonne of CO2e avoided or removed.
How credits work:
- A project (renewable energy, reforestation, methane capture) creates verified emissions reductions
- Credits are issued and registered on platforms like Verra or Gold Standard
- Companies purchase credits to offset their own emissions
- Credits are "retired" (removed from circulation) once used
Critical Rule
Reduce first, offset second. Credits should complement—not replace—actual emissions reductions. Buyers and regulators scrutinize companies that rely heavily on offsets without demonstrating internal reductions.
"Carbon isn't side work anymore; it's operational hygiene with a price tag. Measure it right, cut it fast, and trade wisely when the time comes."
Start Measuring Carbon with Build to Sustain
Our carbon assessment service helps you:
- Define boundaries aligned with BRSR, GHG Protocol, or buyer requirements
- Establish data collection systems for all three scopes
- Calculate accurate carbon footprints using verified emission factors
- Identify high-impact reduction opportunities
- Prepare for CBAM, CCTS, and other carbon pricing mechanisms
Last reviewed: February 2026
