Carbon Commons
If you asked 5 different financial accountants to calculate your yearly tax bill, they should all follow the same rules on taxable income and come up with the same amount. But if you ask 5 different carbon accountants to calculate your emissions, you'll get 5 different answers using 5 different methods. Carbon Commons will solve this fundamental problem by setting a common standard for carbon accounting. Emissions from different products and organisations can finally be compared and used by different companies as products travel across a supply chain.
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What is Carbon Commons?
Carbon Commons is a dataset of emissions factors for any organisation to use to produce a reliable carbon footprint or emissions factor for a product or organisation. For the first time, these emissions factors will be compatible with other products, services and organisations, and with a transparent methodology that combines the best of the two main carbon accounting approaches – the specificity of product life cycle assessments, and the full, system-complete supply chain emissions from input-output models.
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Carbon Commons will be a step-change in supply chain carbon accounting, using the financial records that all companies already have available, it will make carbon accounting accessible, transparent, and for the first time comparable. It will drive a ripple effect of decarbonisation across supply chains worldwide, creating a transparent, unified system where reductions in one part of a supply chain can be meaningfully reflected throughout.
The project will be announced at London Climate Action Week in June 2025. The initial dataset of emissions factors will be available to small and medium businesses worldwide later in 2026.
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The benefits to SMBs of supply chain carbon accounting
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A company’s emissions are broken into 3 different types, called Scopes. Scope 1 is direct emissions from fuels that they burn. Scope 2 are indirect emissions from fuels burnt to generate the electricity they use. And upstream Scope 3 are the indirect emissions from everything that the company buys in its supply chain.
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The CDP estimates that on average, Scope 3 accounts for 75% of a company’s overall emissions, but this varies greatly between different industries.
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Measuring the emissions across its supply chain, enables an organisation to see any hotspots, so they can prioritise areas for emission reductions. It also allows them to set meaningful reduction targets and can often result in efficiencies and reduced resource use. Examining the emissions from a supply chain is also a crucial part of identifying and managing the risks associated with suppliers.
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Supply chain or Scope 3 carbon accounting is also important to comply with reporting regulations, and increasingly for stakeholder engagement where key clients further up the supply chain are asking for the emissions from their suppliers.
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Each product in a supply chain has Scope 1 and 2 emissions from the energy used in its production, and Scope 3 from the emissions associated with its supply chain. When a company buys this product, eg a battery, to use as part of its product, eg a mobile phone, all of the battery's Scope 1, 2 and 3 emissions are included in the Scope 3 emissions of the mobile phone's supply chain.
The problem with carbon accounting
Clearly accounting for emissions across the full supply chain is increasingly important and beneficial to SMEs as well as larger corporates. But reporting on Scope 3 is still voluntary for SMEs, partly because of the perceived difficulties for small businesses in gathering the right data, and the inconsistent nature of Scope 3 emissions calculations.
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How we use your spend data to calculate your carbon footprint, how we combine this with LCAs and what Scopes 1, 2 and 3 mean.
There are problems with both of the main types of supply chain carbon accounting:
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Problems with Product Life Cycle Assessment (P-LCA)
Product Life Cycle Analysis (P-LCA) works from the bottom up, assessing the emissions with each tier of production. Because it is a resource intensive process, with a lot of manual data gathering, there is an inherent limit to the emissions accounted for, called a truncation error. The system boundary, or the number of tiers of the supply chain, is incomplete. Different P-LCAs are likely to have different system boundaries, all incomplete in differing ways.
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Added to the incomplete nature of P-LCAs, are the problems of limited access to supplier-specific data, and even difficulties in tracking down the exact suppliers used in complex, global supply chains. Where adequate P-LCAs do exist, there is then an additional resource pressure in maintaining them and collating them together in one accessible dataset.
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Problems with Input-output models
Input-output models solve the problem of incomplete system-boundaries that are inherent with P-LCAs. But they introduce other problems, predominantly that they lack the specificity of P-LCAs and will give an emissions factor not at a product or organisation level, but an average for one industry sector in one country. This means that changing supplier to one with lower emissions, is not reflected in the standard emissions factor for that purchase from an input-output model.
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How hybridisation solves the problems of P-LCAs and input-output models
Hybridisation means combining data from both P-LCAs and input-output models, to solve the problem of incomplete system-boundaries, whilst keeping the specificity benefits from P-LCAs.
There are 2 ways to hybridise P-LCA and input-output model data.
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The first is to examine a P-LCA and determine its system-boundary, how many tiers of the supply chain does it cover, and which parts are missing. The missing parts are then added from the industry sector average emissions from an input-output model.
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The first method of hybridisation is to determine the system boundary of a P-LCA and how much of the complete emissions have been truncated from the complete system boundary shown by an Input-Output model. If the P-LCA boundary only covers 33% of the complete emissions shown by an Input-Output model, the truncation adjustment factor = 3.
The second method of hybridisation is to use an input-output model, but to adjust the data that is uses by substituting in specific activity-based data from a known supplier. For example, an individual supplier's Scope 1 and Scope 2 data could be used, rather than an industry average. In this way, if the supplier reduced their energy consumption by installing their own renewable energy sources and increasing energy efficiency, those reductions would show in the emission factors output by the adjusted input-output model.
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In order for these two methods of hybridisation to be comparable to each other, a consistent approach to the system boundaries must be taken, so that joining the P-LCA and input-output data in either method avoids any double-counting of emissions
The second method of hybridisation is to substitute the industry averages within an Input-Output model with known supplier data for Scope 1 and Scope 2. For Scope 3 the supplier data is substituted for an estimated portion of the emissions, and hybridised with industry sector average for the truncated emissions.
How Carbon Commons solves supply chain carbon accounting problems
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Eliminates truncation errors in P-LCAs by hybridising them with input-output models to make the boundaries cover all the emissions – system-complete.
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Hybridises in one of two ways: Adding the truncated emissions missing from a P-LCA using input-output model data. Or use input-out model data, but substitute in specific activity-based LCA data where it is known, to create more specific emissions factors.
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Adopts a consistent approach to system boundaries, so that the joining of two datasets avoids any double-counting and so that all outputs are compatible, from either hybridisation method.
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Assesses all methods and calculations against clear transparency criteria.
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Launches with a dataset of emissions factors most commonly used by SMEs.
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Creates an ever-expanding database of emissions factors, all regularly updated.
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Allows worldwide access to one central database, promoting global adoption of the same data and standards.
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Who is involved in Carbon Commons?
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Small World Consulting
World-leading climate consultancy with expertise in measuring the carbon footprint and environmental impacts of organisations, led by Prof Mike Berners-Lee.
www.sw-consulting.co.uk
Sage Group PLC
Leading British multinational enterprise software company which specialises in providing cloud-based business management solutions, including accounting, payroll, HR, and payment systems, primarily for small and medium-sized businesses.
www.sage.com
The Carbon Accounting Alliance
Represents the carbon accounting community with over 750 companies in over 60 countries. Carbon Commons has been met with enthusiasm and a high level of interest from the community: www.carbonaccountingalliance.com
We Mean Business Coalition
A global nonprofit coalition formed by seven leading nonprofits (BSR, CDP, Ceres, Corporate Leaders Group, Climate Group, The B Team, WBCSD) and working to catalyse business and policy action on climate change: www.wemeanbusinesscoalition.org
B4NZ
A supporting institution of the UN-convened Net Zero Banking Alliance (NZBA), focuses on strategic policy alignment to enable policymakers and banks to play their part in accelerating the transition to net zero:
www.unepfi.org/net-zero-banking
British Business Bank
The UK’s economic development bank, its mission is to drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy, by improving access to finance for smaller businesses.
www.british-business-bank.co.uk
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How do I get involved in Carbon Commons?
We're actively looking for partners across the private and public sectors, NGOs and academic bodies. If you support the aims of an open-source, globally compatible emissions factor database and want to get involved or show your support in any way, we’d like to hear from you.
We’re also seeking forward-thinking funders to support our ambitious vision by contributing to the ongoing validation of our hybrid methodology, the development of the open-source database, and the global promotion of its adoption. Early supporters will gain a unique opportunity to demonstrate climate leadership, elevate their brand visibility, and shape the future of sustainable business practices worldwide. If you’d like to talk to us about possible funding opportunities, please get in touch.
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Carbon Commons:
White Paper
We set out the ambition of Carbon Commons and the methodology behind the hybridised emission factors.
