Top 25 Carbon Reporting FAQs: Everything Irish & UK SMEs Need to Know in 2026

1. What is carbon reporting?

Carbon reporting is the process of measuring, recording, and disclosing the greenhouse gas (GHG) emissions produced by your business activities. It typically covers energy use, transport, waste, and supply chain activities, expressed in tonnes of CO2 equivalent (tCO2e) so different gases can be compared on a like-for-like basis.

2. Is carbon reporting mandatory for my business?

It depends on your size, location, and sector. Large UK companies fall under SECR (Streamlined Energy and Carbon Reporting), large EU companies are increasingly captured by CSRD, and many SMEs face indirect pressure through supply chain requests from larger customers, lenders, or grant bodies. Even where it isn't legally required yet, voluntary reporting is becoming a competitive necessity for winning contracts and accessing finance.

3. What's the difference between Scope 1, 2, and 3 emissions?

Scope 1 covers direct emissions from sources you own or control, such as company vehicles or gas boilers. Scope 2 covers indirect emissions from purchased electricity, heat, or steam. Scope 3 covers everything else in your value chain — purchased goods, business travel, employee commuting, waste, and the use of your sold products. For most businesses, Scope 3 represents the largest share of total emissions. Read the full guide on scope 1, 2 and 3 emissions here.

4. Which carbon reporting framework should I use?

The GHG Protocol is the foundation for almost all other frameworks and is the best starting point for any business, regardless of size or location. From there, your specific obligations layer on top: SECR if you're a large UK company, CSRD if you're in scope under EU rules, and SBTi or CDP if you're setting voluntary targets or responding to investor requests.

5. What is the GHG Protocol?

The GHG Protocol is the most widely used global standard for measuring and reporting greenhouse gas emissions. It is the most widely used framework for measuring corporate emissions across Scope 1 (direct), Scope 2 (energy), and Scope 3 (value chain) categories. Most national and regional reporting regimes, including CSRD, build on its methodology.

6. What is SECR and does it apply to me?

SECR requires large UK companies to disclose their energy use and carbon emissions annually as part of their directors' report. It applies to UK quoted companies of any size, and large unquoted companies and LLPs that meet at least two of: more than 250 employees, turnover above £36 million, or a balance sheet above £18 million. Smaller businesses aren't directly required to comply, but many report voluntarily to satisfy customer or funder requests.

7. Is Scope 3 reporting mandatory under SECR?

The TCFD recommends that companies disclose Scope 3 emissions where they form a significant portion (40% or more) of their overall GHG emissions. SECR itself focuses formally on Scope 1 and Scope 2, but as stakeholder and investor expectations evolve, disclosure of material Scope 3 categories is increasingly common practice even where not strictly mandated.

8. What is CSRD and who needs to comply?

CSRD (the Corporate Sustainability Reporting Directive) is the EU's sustainability reporting law, requiring detailed disclosures aligned with the European Sustainability Reporting Standards (ESRS). Large companies meeting EU size thresholds are in scope, with phased deadlines depending on company size and listing status. Smaller suppliers to in-scope companies often feel the impact indirectly, as larger customers request emissions data to meet their own reporting requirements.

9. How do CSRD and the GHG Protocol relate to each other?

Under the CSRD, companies reporting under ESRS E1 must disclose emissions following GHG Protocol methodology, which means the GHG Protocol effectively sets the calculation rules that CSRD reporting builds on. If your business already follows GHG Protocol principles for Scope 1, 2, and 3, you're working from the right foundation for CSRD alignment.

10. What is "double materiality" in sustainability reporting?

Double materiality means assessing sustainability issues from two directions at once: how your business affects the environment and society (impact materiality), and how environmental and social issues affect your business financially (financial materiality). Companies must assess both their impact on sustainability matters and how sustainability issues affect their business. It's a core concept under CSRD and increasingly referenced across other frameworks.

11. How do I calculate my carbon footprint?

You calculate your carbon footprint by gathering activity data (such as litres of fuel used, kWh of electricity consumed, or kilometres travelled), then multiplying each figure by the relevant emission factor to convert it into tCO2e. A carbon footprint is the total amount of greenhouse gases (including carbon dioxide and methane) that are generated by our actions, and a comprehensive footprint includes Scope 1, 2, and 3 emissions, not just direct sources.

12. What's the difference between location-based and market-based Scope 2 reporting?

Location-based reporting uses the average emissions intensity of the grid where your electricity is consumed, based on national or regional grid data. Market-based reporting reflects the emissions associated with the specific electricity contracts you've chosen, including renewable energy purchases backed by Guarantees of Origin (GOs) or similar certificates. The GHG Protocol recommends reporting both figures where possible, since they can tell quite different stories about your energy choices.

13. What is a Guarantee of Origin (GO) and why does it matter?

A Guarantee of Origin is a certificate proving that a unit of electricity was generated from a renewable source. If your business buys GOs (directly or via your supplier), you can use them to support a lower market-based Scope 2 emissions figure, reflecting your purchase of renewable electricity even if the physical grid mix is more mixed.

14. What emission factors should I use?

Emission factors convert activity data (like litres of diesel or kWh of electricity) into CO2e. In Ireland and the UK, common sources include SEAI conversion factors, UK government (DESNZ) conversion factors, and the AIB residual mix figures for market-based electricity reporting. Using factors from a recognised national source ensures your figures are credible and comparable year on year.

15. How do I report emissions from natural gas use?

Natural gas emissions are typically calculated from your gas consumption, usually shown on bills in kWh or cubic metres, multiplied by the relevant emission factor for natural gas combustion. If your bill shows cubic metres, you'll generally need to convert to kWh first using a calorific value factor before applying the emissions conversion.

16. How should I categorise waste emissions?

Waste emissions depend on the disposal method and waste type. Municipal solid waste (MSW) sent to landfill, incineration, or recycling each carries different emission factors, and factors can vary depending on whether waste composition is reported separately (for example, paper, food waste, or mixed dry recyclables) under defined disposal/recovery method (DMR) categories. Getting this categorisation right matters because the emissions difference between landfill and recycling for the same waste volume can be substantial.

17. What is emissions intensity and why does it matter?

Emissions intensity expresses your total emissions relative to a business metric, such as revenue, square metres of floor space, or number of employees. Include emissions intensity based on net revenue is a common approach under CSRD, but employee headcount is also widely used, particularly for service-based businesses where revenue can fluctuate independently of operational footprint. Intensity metrics let you track progress even as your business grows or shrinks.

18. Do I need to report emissions from my supply chain?

If you're using Scope 3 (and most credible carbon reporting includes it), then yes — supply chain emissions, known as purchased goods and services, fall within Scope 3. Supply chain emissions can account for 60% of total emissions and demand accurate activity-based data collection from suppliers or financial systems. For SMEs, this often starts with spend-based estimates and improves over time as supplier-specific data becomes available.

19. What's the easiest way for an SME to start carbon reporting?

Start small and build a foundation you can improve on. Begin with Scope 1 and 2 (your direct fuel use and electricity), since the data is usually readily available from utility bills, and add Scope 3 categories incrementally, prioritising the largest and most relevant ones for your sector. Carbon accounting software can simplify this considerably by automating calculations and keeping a consistent methodology year on year. Check out our guide to building your first sustainability report here.

20. How often do I need to report my emissions?

Most frameworks expect annual reporting, aligned with your financial year, so you can track trends and set meaningful year-on-year targets. Even if you're not yet legally required to report, establishing an annual rhythm early makes it far easier to respond quickly when a customer, lender, or regulation asks for the data.

21. What's the difference between SBTi targets and general carbon reduction goals?

SBTi (the Science Based Targets initiative) provides a formal framework for setting emissions reduction targets that are independently verified as consistent with limiting global warming to well below 2°C, ideally 1.5°C. A general carbon reduction goal can be set internally without external validation. SBTi targets carry more credibility with investors and large customers, but require more rigorous data and a formal commitment process.

22. What is CDP and do SMEs need to respond to it?

CDP (formerly the Carbon Disclosure Project) is a global disclosure system through which companies report environmental data, often in response to requests from investors or large customers. SMEs aren't typically required to respond directly, but may be asked to provide underlying data to a larger customer who reports to CDP themselves, making accurate internal carbon accounting valuable even without a direct CDP obligation.

23. Can carbon credits or offsets be counted toward my emissions reduction?

Carbon credits and removals generally need to be reported separately from your gross emissions, not netted off against them. You must report gross Scope 1, 2, and 3 emissions separately from any carbon credits or removals—no netting allowed under CSRD, and carbon credits require strict separate disclosure with full documentation of quality, additionality, and permanence. Even outside formal CSRD reporting, this separation is best practice to avoid greenwashing concerns.

24. What's the best carbon accounting software for an Irish or UK SME?

The right platform depends on your size, sector, and which frameworks you need to report against. Look for GHG Protocol alignment, clear emissions factor sourcing, and outputs that can be independently assured, and check that the platform supports the specific frameworks relevant to you, such as SECR or CSRD. For SMEs in particular, it's worth prioritising platforms built for businesses your size, with accessible interfaces and support, rather than enterprise tools designed for large dedicated sustainability teams.

25. What happens if I don't report my emissions?

For businesses formally in scope of SECR or CSRD, non-compliance can mean regulatory penalties and reputational damage with investors and auditors. For SMEs not yet legally required to report, the practical risk is commercial: losing out on contracts with larger customers who require supplier emissions data, missing eligibility for green financing or grants, and falling behind competitors who can demonstrate credible climate credentials. Starting now, even with a simple baseline, puts you ahead of the curve when requirements catch up.

Frequently asked questions, answered with confidence

Carbon reporting doesn't have to be overwhelming. Whether you're responding to your first customer questionnaire or preparing for CSRD, the key is starting with a clear methodology, using credible emission factors, and building a process you can repeat every year.

This article is for general guidance and reflects the regulatory landscape as of mid-2026. Frameworks such as CSRD continue to evolve, so always check current requirements for your specific size and sector.