Carbon accounting 101 for logistics managers

What is carbon footprint and how is it calculated?

A carbon footprint is the total amount of greenhouse gases released into the atmosphere, either directly or indirectly, by a person, organization, or product. It measures the environmental impact of our everyday activities.

Carbon footprint reflects all the GHGs produced through your operations. That includes emissions from things like energy use, transportation, and waste, as well as those tied to the goods and services you purchase from others.

And even though it’s called a carbon footprint, it actually covers all types of greenhouse gases. To make it easier to measure, everything is converted into a single unit called carbon dioxide equivalent (CO₂e)—which helps you compare and track your total impact more clearly.

What is CO₂e?

While CO₂ (carbon dioxide) is a specific greenhouse gas that naturally exists in the atmosphere, CO₂e (carbon dioxide equivalent) is a standardized way to measure the total impact of all greenhouse gases combined. It expresses their effect in terms of the amount of CO₂ that would cause the same level of warming.

To calculate the CO₂e of any greenhouse gas, you need to know its Global Warming Potential (GWP)—which tells you how much heat that gas traps in the atmosphere compared to CO₂, usually measured over a 100-year period.

CO₂e lets you compare and combine different gases on the same scale, making it easier to understand overall climate impact.

How do you calculate CO₂e?

To calculate the CO₂e of any greenhouse gas, you can use this simple formula:

CO₂e = Amount of a particular GHG × Its Global Warming Potential (GWP)

Here’s an example: If your operations produce 0.5 tonnes of methane, and methane has a GWP of 28, the calculation would look like this:

0.5 × 28 = 14 tonnes CO₂e

This means your methane emissions are equivalent to releasing 14 tonnes of carbon dioxide into the atmosphere.

To find your total carbon footprint, you’ll need to do this for every greenhouse gas your business produces — multiply each by its GWP, then add them all together to get your overall CO₂e.

Keep in mind, some gases have very high GWPs — for example, certain hydrofluorocarbons (HFCs) and sulfur hexafluoride (SF₆) can have values in the tens of thousands. That means even a small amount can significantly increase your carbon footprint.

Understanding sources of carbon emissions in your business

What are scope 1, 2 and 3 emissions?

According to the Greenhouse Gas Protocol (GHG Protocol), a company’s emissions are grouped into three categories, or “scopes.” These help businesses understand where their greenhouse gas (GHG) emissions come from. Whether they’re produced directly or indirectly as part of operations.

Here’s a quick breakdown:

Scope 1: These are direct emissions from sources that your company owns or controls.

Example: Fuel burned by company vehicles or emissions from manufacturing equipment.

Scope 2: These are indirect emissions from the energy your company purchases and uses.

Example: Emissions from the generation of electricity, steam, heating, or cooling that your business consumes but doesn’t produce directly.

Scope 3: This covers all other indirect emissions that happen across your value chain—beyond Scopes 1 and 2.

Example: Emissions from suppliers producing materials for your business, transportation of goods, or even the use and disposal of your products by customers.

Together, these three scopes give you a full picture of your company’s carbon footprint—from the emissions you control to those connected to your wider network.

As a logistics manager, most of your reporting work falls under Scope 3, since it includes transportation, warehousing, and distribution activities.

Scope 3 emissions: A deep dive

Scope 3 emissions cover all the indirect emissions that happen across your company’s entire value chain. Because it includes so many different activities, Scope 3 can feel a bit overwhelming — it’s not always clear which emissions fall under it.

But here’s why it matters: Scope 3 accounts for nearly 60% of all global emissions. That means addressing them offers the biggest opportunity to make a real impact.

To make things easier, the Greenhouse Gas Protocol (GHG Protocol) breaks Scope 3 into 15 categories in its Scope 3 Calculation Guidance. These categories are split into two groups.  Upstream (before your operations) and downstream (after your operations):

Upstream:

1. 1. Purchased goods and services
2. 2. Capital goods
3. 3. Fuel and energy-related activities not included in Scopes 1 or 2
4. 4. Upstream transportation and distribution
5. 5. Waste generated in operations
6. 6. Business travel
7. 7. Employee commuting
8. 8. Upstream leased assets

Downstream:

1. 
   9. Downstream transportation and distribution
2. 10. Processing of sold products
3. 11. Use of sold products
4. 12. End-of-life treatment of sold products
5. 3. Downstream leased assets
6. 14. Franchises
7. 15. Investments

As a logistics manager, your main focus will likely be on categories 4 and 9—the emissions from transportation, storage, and distribution of goods, both upstream and downstream of your company’s operations.

Scope 3 calculation methods in carbon accounting

Now that you know what carbon accounting involves and which emission sources to look at, the next question is — how do you actually measure your Scope 3 emissions?

The answer depends on the kind of data you have and how your value chain is set up. In general, there are three main methods you can use to calculate Scope 3 emissions:

1. 1. Spend-based method
2. 2. Activity-based method
3. 3. Supplier-specific method

Spend-based calculation

The spend-based method works by taking the financial value of the goods or services you’ve purchased and multiplying it by an emission factor. Basically, the average amount of emissions produced per dollar spent. It’s a simple and quick way to estimate emissions, especially if detailed data isn’t available. However, it’s also less accurate because it uses general averages and doesn’t reflect the specific characteristics of each product.

Activity-based calculation

Instead of using financial data, this method relies on the physical quantity of materials (like weight) multiplied by the relevant emission factors. It’s generally more accurate than the spend-based method, but since it still uses averages, it may not always provide a high level of precision.

Supplier-specific calculation

This is the most accurate method, as it uses direct data from suppliers. It involves collecting detailed information such as energy use or raw material sourcing from your suppliers so you can calculate emissions based on actual activities within your supply chain. While this approach provides the most precise insights, it can be time-consuming and complex because of limited transparency across global supply chains.

Hybrid approach

In practice, companies often start with the spend-based method because it’s easier to implement, then gradually move to more accurate methods as better data becomes available. Many also use a hybrid approach, combining supplier-specific data where possible and filling in the gaps with spend-based or activity-based estimates.

Section 2 – Carbon accounting in your logistics supply chain

Carbon accounting within your logistics supply chain is about tracking, managing, and reporting the emissions that come from your logistics operations—even when those activities are handled by third parties. It requires close coordination with your logistics partners, such as freight forwarders, who play a key role in providing the emissions data linked to your shipments.

In this section, we’ll break down logistics carbon accounting into three main steps to help you understand how it works and where to begin.

Step 1: Calculating emissions

The first step is to convert your shipment data into GHG emissions data. This is usually handled by your logistics providers, who perform the calculations before sharing the final results with you. Still, it’s important to understand how this process works so you can clearly communicate your requirements and expectations to your suppliers during the calculation phase.

Introducing the GLEC Framework

The transport and logistics industry follows a well-defined methodology for calculating GHG emissions from freight activities. This framework helps you and your suppliers measure and report your business’s Scope 3, Category 4 and 9 emissions — those linked to transportation and distribution.

Developed by the Smart Freight Centre (SFC), the Global Logistics Emissions Council (GLEC) Framework offers a comprehensive approach for calculating emissions from both upstream and downstream transport and distribution activities within your value chain.

Importantly, the GLEC Framework is the only internationally recognized methodology for measuring and reporting carbon emissions from freight transport. It also forms the foundation for the ISO 14083 standard, which sets out how to quantify and report GHG emissions from transport chain operations.

How does the GLEC variFramework work?

The GLEC Framework allows for different levels of precision depending on the quality and detail of the data you provide. At the most basic level, it uses only essential shipment details to estimate emissions. At the most advanced level, it draws on actual data from the specific vehicles used to transport and distribute goods.

It defines three main data input types for calculating emissions:

1. Default data:

This method relies on standard industry averages and assumptions — outlined in the Smart Freight Centre’s End-to-End GHG Reporting Guidance — to estimate emissions when only limited data is available, such as cargo weight, distance traveled, and an emissions intensity factor. Because it accounts for many unknowns, this approach tends to be conservative and often slightly overestimates actual emissions.

2. Modelled data:

Modelled data builds on default data but adds more detailed, vehicle- and route-specific information. This type of data is typically available through specialized carbon accounting software. It can include details like vessel IMO numbers, carrier codes, or flight numbers, which allow you to apply emissions factors for the exact vehicle used. It can also factor in road type, route gradient, and traffic conditions — resulting in a more accurate estimate.

3. Primary data:

This is the gold standard for Scope 3 carbon accounting in transport and logistics. It uses actual records—such as fuel receipts or digital fuel consumption data—from the vehicles that moved your goods. While it delivers the highest accuracy, it’s often the hardest to obtain due to the complexity and opacity of global supply chains.

Understanding these three data input types helps you assess the quality of the emissions calculations your logistics providers share with you—and set a clear minimum data standard when engaging them for tenders or partnerships.

Step 2: Supplier data collection and management in logistics carbon accounting

Accurately calculating GHG emissions from your logistics supply chain requires strong data management since much of the information you’ll need will come from your suppliers. This adds an extra layer of complexity to collecting and managing your Scope 3 emissions data.

Challenges of logistics emissions data collection in carbon accounting

• Differing levels of carbon reporting awareness: Not all logistics providers have the same level of understanding or capability when it comes to calculating and reporting shipment carbon emissions. This can lead to inconsistencies in data quality. Smaller suppliers, in particular, may not have the resources or expertise needed to provide accurate emissions data.
• Variability in reporting standards across regions: Because carbon emissions reporting is still a relatively new practice, reporting standards can vary widely from one region to another. This makes it challenging to combine and present your carbon emissions data in a consistent, comparable format.
• Varying data sources: When different suppliers use different tools or methodologies to calculate and report shipment emissions, it becomes difficult to make accurate comparisons or identify reliable carbon emissions sources. This often results in fragmented or mismatched datasets.

Engaging with your suppliers during the carbon accounting process

To help address these challenges, engaging closely with your suppliers should be a key part of your carbon accounting process. From the very beginning of any contract, clearly outline your expectations for Scope 3 emissions reporting, including the reporting standards they must follow, how and when reports should be submitted, and any penalties for missing deadlines or failing to comply.

It’s also important to ensure that suppliers use a science-based methodology, such as the GLEC Framework when calculating emissions. This gives you confidence in the accuracy of their data and helps maintain consistency during your reporting phase.

When working with new suppliers, make sure to vet them thoroughly on their carbon emissions calculation and reporting practices. Ask about the tools and methods they use, confirm that their reports meet your data requirements, and ensure they can deliver information in the right format for your records.

Just like financial due diligence, carbon emissions reporting due diligence should become a standard part of your procurement process. This ensures that your suppliers’ reporting capabilities align with your sustainability goals and support your journey toward more transparent, accurate emissions tracking.