ProMeasure: Carbon Accounting & Net Zero Services

What is carbon accounting?

Carbon accounting is the process of measuring, recording, and reporting the greenhouse gas (GHG) emissions produced by an organization, product, project, or value chain. It is the foundational step in any credible decarbonization or net zero strategy.

Also known as GHG accounting or emissions inventory, carbon accounting quantifies emissions in tonnes of CO₂ equivalent (tCO₂e)—a standardized unit that converts all greenhouse gases (CO₂, methane, nitrous oxide, HFCs, etc.) into a single comparable number.

Without accurate carbon accounting, organizations cannot credibly claim progress on net zero, set science-based targets, comply with BRSR or CBAM requirements, or communicate their emissions performance to investors and customers.

What Are Scope 1, 2, and 3 Emissions?

The GHG Protocol—the world’s most widely used standard for GHG accounting—divides an organization’s emissions into three categories called scopes. Understanding the difference is essential for any carbon accounting exercise.

Scope	Type	Source	Examples
Scope 1	Direct           emissions	Owned/controlled sources	Furnaces, company vehicles, on-site generators, refrigerants
Scope 2	Indirect energy	Purchased electricity & heat	Grid electricity, district cooling, steam purchased from utility
Scope 3	Indirect value chain	Everything else upstream & downstream	Supplier inputs, business travel, logistics, product use, waste disposal

Why Scope 3 matters most?

For most organizations, Scope 3 emissions account for 70–90% of their total carbon footprint. This includes upstream supplier emissions, employee commuting, business travel, and downstream product use and disposal. Ignoring Scope 3 means missing the majority of your climate impact — and failing to meet investor, buyer, and regulatory expectations.

Scope 1 Emissions — What Counts?

Scope 1 covers all direct greenhouse gas emissions from sources that your organization owns or controls. Examples include:

• Combustion of fossil fuels in boilers, furnaces, kilns, and ovens
• Company-owned vehicles and fleet (petrol, diesel, CNG)
• On-site power generation using diesel generators
• Fugitive emissions from refrigerants and air conditioning systems
• Process emissions from chemical reactions (e.g., cement, steel, chemicals manufacturing)

Scope 2 Emissions — What Counts?

Scope 2 covers indirect emissions from the generation of purchased energy—electricity, heat, steam, or cooling—that your organization consumes but does not generate itself.

• Electricity purchased from the grid (calculated using emission factors published by India’s Ministry of Power / Bureau of Energy Efficiency)
• Steam or heat purchased from third-party utilities
• District cooling systems

Scope 2 can be reported using two methods: the location-based method (using average grid emission factors) and the market-based method (using contractual instruments like renewable energy certificates). Wudbox calculates both.

Scope 3 Emissions — What Counts?

Scope 3 covers all indirect emissions in an organization’s value chain—both upstream (suppliers, raw materials) and downstream (distribution, product use, and end-of-life). The GHG Protocol defines 15 Scope 3 categories:

Upstream (Categories 1–8)	Downstream (Categories 9–15)
1. Purchased goods & services	9. Downstream transportation & distribution
2. Capital goods	10. Processing of sold products
3. Fuel & energy-related activities	11. Use of sold products
4. Upstream transportation & distribution	12. End-of-life treatment of sold products
5. Waste generated in operations	13. Downstream leased assets
6. Business travel	14. Franchises
7. Employee commuting	15. Investments
8. Upstream leased assets

For most Indian manufacturers and exporters, the highest-impact Scope 3 categories are purchased goods & services (Category 1) and use of sold products (Category 11).

What Is Net Zero and How Is It Different from Carbon Neutral?

These two terms are often used interchangeably, but they have important distinctions:

Term	What It Means
a) Carbon Neutral	Balancing the total amount of carbon emitted with an equivalent amount offset or removed. Can rely heavily on offsets without requiring deep emission reductions.
b) Net Zero	Reducing GHG emissions across the value chain to as close to zero as possible (aligned to a 1.5°C science-based pathway), then neutralizing any residual emissions with permanent carbon removals—not just offsets.
c) Climate Positive/Carbon Negative	Going beyond net zero—removing more carbon from the atmosphere than the organization emits.

Net zero aligned to the Science Based Targets initiative (SBTi) requires organizations to reduce absolute emissions by at least 90% from a base year before offsetting the remaining 10% with high-quality, permanent carbon removals. This is the gold standard for corporate climate commitments in 2024 and beyond.

What is a Net Zero Roadmap?

A net zero roadmap is a time-bound, organisation-specific plan that outlines how a company will reduce its greenhouse gas emissions to net zero — typically by 2040 or 2050. A credible net zero roadmap includes:

• A verified baseline emissions inventory (Scope 1, 2, and 3)
• Short-term targets (2025–2030) and long-term targets (2040–2050) aligned to a 1.5°C science-based pathway
• Priority reduction initiatives — renewable energy transition, energy efficiency, supply chain engagement, electrification of fleet
• Interim milestones with measurable KPIs
• A residual emissions strategy (what cannot be reduced) and an approach to permanent carbon removal
• Governance — board-level ownership, progress reporting, and annual disclosure

Wudbox delivers end-to-end net zero roadmaps for Indian organisations across manufacturing, services, real estate, and financial sectors.

Carbon Accounting in India — Regulatory and Market Context

Carbon accounting in India is evolving rapidly, driven by domestic regulation, global supply chain pressure, and investor expectations. Here is what Indian organisations need to know:

a) BRSR and Scope 1, 2, 3 Disclosures

India’s BRSR (Business Responsibility and Sustainability Reporting) framework — mandatory for the top 1000 listed companies — requires disclosure of Scope 1 and 2 emissions. BRSR Core (mandatory for top 150–250 companies) requires third-party assurance on these disclosures. Scope 3 disclosure is voluntary under BRSR but increasingly expected by investors and global rating agencies.

b) CBAM — The EU Carbon Border Adjustment Mechanism

From 2026, Indian exporters of steel, cement, aluminium, fertilisers, hydrogen, and electricity to the European Union must report the embedded carbon emissions in their products. From 2026, they will be required to purchase CBAM certificates to cover those emissions. This effectively means Indian manufacturers exporting to Europe need accurate Scope 1 and 2 carbon accounting for their products — urgently. Wudbox helps Indian exporters build the data systems and reporting processes to comply with CBAM.

c) SBTi and Science-Based Targets in India

The Science Based Targets initiative (SBTi) is the global body that validates corporate net zero commitments against 1.5°C pathways. Indian companies — particularly those in the supply chains of global multinationals — are increasingly required to set SBTi-approved targets. As of 2024, over 100 Indian companies have committed to or approved SBTi targets. Wudbox provides the baseline carbon inventory and net zero roadmap that form the foundation of an SBTi submission.

d) India’s Carbon Market — Carbon Credit Trading Scheme (CCTS)

India launched its Carbon Credit Trading Scheme (CCTS) in 2023, establishing a domestic market for carbon credits. Industries covered under the Perform Achieve and Trade (PAT) scheme and the Renewable Energy Certificate (REC) mechanism are being integrated. Companies that measure and manage their emissions rigorously will be best positioned to generate or purchase credits in India’s emerging voluntary and compliance carbon markets.

Carbon Accounting Glossary — Key Terms Explained

a. GHG Protocol

The Greenhouse Gas Protocol is the world’s most widely used accounting standard for measuring and managing greenhouse gas emissions, developed by WRI and WBCSD. It defines Scope 1, 2, and 3 emission categories and provides calculation methodologies for organizations, projects, and products.

b. tCO₂e (tonnes of CO₂ equivalent)

The standard unit for expressing greenhouse gas emissions. All greenhouse gases (CO2, methane, nitrous oxide, HFCs, etc.) are converted to their CO2-warming equivalent using Global Warming Potential (GWP) values from the IPCC. 1 tonne of methane = 28 tCO2e (over 100 years, per IPCC AR6).

c. Emission Factor

A coefficient that quantifies the amount of GHG emitted per unit of activity. For example, India’s national grid emission factor is approximately 0.82 kg CO2e per kWh of electricity consumed (2022–23 value, BEE). Emission factors vary by fuel type, country, year, and technology.

d. Baseline Emissions

The historical level of GHG emissions against which future reductions are measured. Setting a robust, independently verified baseline is the essential first step of any net zero commitment or SBTi target. A base year is selected (e.g., 2019 or 2022) and recalculated if significant structural changes occur.

e. Science Based Targets (SBTs)

Emission reduction targets that are aligned with the level of decarbonization required to meet the Paris Agreement goals—limiting global warming to 1.5°C above pre-industrial levels. The Science Based Targets initiative (SBTi) is the independent body that validates and approves corporate science-based targets.

f. Carbon Offset / Carbon Credit

A tradeable certificate representing a reduction, avoidance, or removal of one tonne of CO₂e. Offsets can be purchased by organizations to compensate for emissions they cannot yet eliminate. Under net zero frameworks, offsets are only acceptable for residual emissions after deep cuts have been made—and high-quality, permanent carbon removals are preferred over avoidance-based credits.

g. Renewable Energy Certificate (REC)

A market-based instrument that represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from renewable sources. In India, RECs are traded on power exchanges and can be used to make Scope 2 market-based claims.

h. Life Cycle Assessment (LCA)

A systematic analysis of the environmental impacts of a product or service across its entire life cycle—from raw material extraction through manufacturing and use to end-of-life disposal. LCA is used for product-level carbon footprinting, environmental product declarations (EPDs), and green procurement.

i) CBAM (EU Carbon Border Adjustment Mechanism)

A European Union policy that requires importers of carbon-intensive goods (steel, cement, aluminium, fertilisers, hydrogen, electricity) to pay for the embedded carbon in those products, mirroring the carbon cost paid by EU producers under the EU ETS. From 2026, Indian exporters of these goods must purchase CBAM certificates based on their product-level carbon footprint.

j) Decarbonisation

The process of reducing greenhouse gas emissions associated with an organization’s operations and value chain, typically through transitioning away from fossil fuels to renewable energy, improving energy efficiency, electrification, and supply chain transformation. Decarbonization is the core strategy underpinning any net zero commitment.

Ready to Begin Your Carbon Accounting Journey?

Let us make your net zero goals achievable—step by step, scope by scope. Whether you are measuring your carbon footprint for the first time, preparing for BRSR assurance, responding to CBAM, or setting SBTi targets, Wudbox has the expertise and systems to support you.

Reach us at info@wudbox.in or 9811126365.

Frequently Asked Questions — Carbon Accounting & Net Zero