Calculation Methodology

Increasingly corporations are required by law to report their emissions to regulators. In practice, this means they need to use credible calculation logic – most commonly by following the Greenhouse Gas Protocol standards – and provide auditable data sources to back up calculation results.

As one example, the EU's CSRD regulation, which affects many corporations reporting starting in 2025, requires companies to receive limited and then reasonable assurance from 3rd party auditors for their emissions reports (source).

The pressure to produce audit-grade reports has only increased. Corporations who reduce their reported emissions over time increasingly receive financial benefits in various forms.

Some examples of the financial impact of reducing emissions:

1. Avoiding painful fines:
   • The ECB has threatened daily fines up to 5% of annual revenue for banks who are not compliant with regulations to report emissions from their loan portfolios (source)
2. Reducing the cost of carbon taxes:
   • The EU's cap and trade ETS scheme expanded in 2024, and now covers emissions from maritime shipping (source)
     • This is already incentivizing large regulated enterprises to find lower carbon solutions to reduce their tax bill – for example, Nestle is now working with Maersk to reduce its shipping emissions using alternative fuels (source)
   • The UK and California have similar cap-and-trade policies in place
3. Retaining and winning enterprise buyers:
   • Enterprises like Salesforce.com have committed to reducing their emissions by signing up to the Science Based Targets Initiative, and now increasingly require suppliers to contractually commit to doing the same. Such internal policies can have a cascading effect within entire supplier ecosystems (source)

If using more granular primary data instead of average emission factors increases the accuracy of a report and can help reduce a company's reported emissions, why doesn't every company do it?

Companies increasingly publish primary emissions data, but these reports are complicated to acquire and use. This is because most managers don't know how to translate unstandardized emissions reports into useful data and actions, and suppliers hate responding to surveys.

We start by taking the pain out of acquiring company-reported carbon data, by aggregating data from many fragmented sources, and normalizing it to Greenhouse Gas Protocol standards.

We then provide tools that automate Scope 3 measurement and simplify carbon reduction decisions for both sustainability professionals and supply chain operations employees.

Depending on your use case and available input data, DitchCarbon can provide manufacturer-reported data and solutions at the product or company level, as well as industry average EEIO emission factors when more granular data are not available, to complete coverage.

In practice, this means our products are:

1. Auditable: with original data sources provided
2. Accurate: aligned with the GHG Protocol
3. Comprehensive: automatically delivering the broadest coverage while using the most granular primary data when available and appropriate for your use case

We handle common issues with Scope 3 data so you don't have to, and our team is available to help you pick the best tool for your use case.