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Core Concepts of Carbon Footprinting for Financial Professionals 

Carbon footprints are key metrics for assessing an organisation or portfolio’s carbon emission sources and emissions reduction performance. As the global economy decarbonises, accurate emissions measurement is fundamental for assessing climate risks, informing investment decisions, and supporting regulatory compliance. Finance professionals must therefore understand how emissions are defined, measured, categorised, and reported using globally recognised standards. 

This module provides a comprehensive introduction to carbon footprinting across organisations and financial institutions. It explores the foundational concepts behind carbon emissions, the structure and principles of the Greenhouse Gas (GHG) Protocol, emissions boundary setting, and the distinctions between Scope 1, 2, and 3 emissions. The module concludes by guiding learners through the practical application of calculating an organisational carbon footprint, identifying red flags and issues, preparing investor-grade disclosures, and understanding portfolio carbon accounting through PCAF. 

Duration: ~120 minutes 

Learning Outcomes 

By the end of this module, participants will be able to: 

• Explain what carbon footprints are and why they matter in ESG, finance, and corporate strategy. 

• Describe the purpose, structure, and principles of the GHG Protocol. 

• Distinguish between organisational and operational boundary setting for emissions accounting. 

• Define and differentiate Scope 1, 2, and 3 emissions. 

• Evaluate methods for measuring, calculating, and verifying an organisation’s carbon footprint. 

• Interpret carbon emissions data to support reporting, investment analysis, and decision-making. 

• Explain the basics of PCAF and how it supports portfolio-level emissions accounting. 

How to Complete This Learning Pathway

In each section, you will be presented with key learning objectives designed to build your understanding of the topic and their practical applications. You are encouraged to explore the Altiorem library to deepen your knowledge on each objective. 

To assist your learning, a suggested prompt for our AI Chatbot, Alma (accessible at the bottom right of this page, or on our homepage) is provided in every section. Enter this prompt into Alma to gather relevant reports, guides, and case studies from the Altiorem Library to guide your learning. You can also chat with individual reports to explore them more deeply. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

As you progress, reflect on each topic using the accompanying reflection questions to connect your learning to your professional practice. Once you have completed all sections, review your knowledge with the final quiz, where you can request your certificate of completion. 

1. Introduction to Carbon Footprinting

This section introduces carbon footprints, explaining what they measure and how they relate to climate impact, business operations, value-chain activity, and investment risk. Learners explore how carbon footprinting supports ESG integration, enables net-zero strategies, and informs climate-related financial decision-making.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term. 

“Show me Altiorem resources that explain the fundamentals of carbon footprints and their relevance to ESG and sustainable finance.”

Reflection questions:

1. How does understanding carbon emissions improve climate-risk analysis?

2. In what ways can carbon footprinting influence organisational strategy and innovation?

3. What pressures are driving organisations to measure their emissions more rigorously?

4. How can emissions data create value for investors and stakeholders?

5. What challenges might organisations face when first calculating carbon footprints?

2. Understanding the GHG Protocol

This section provides a deep dive into the Greenhouse Gas Protocol; the most widely recognised global standard for measuring and reporting emissions. 

The International Sustainability Standards Board (ISSB), established by the IFRS Foundation, sets global standards for sustainability-related financial disclosures aimed at improving consistency and comparability for investors. Its climate standard (IFRS S2) requires organisations to disclose climate-related risks, opportunities, and greenhouse gas emissions aligned with the GHG Protocol, linking carbon data to enterprise value and financial decision-making.

The Corporate Sustainability Reporting Directive (CSRD) is an EU regulation that significantly expands sustainability reporting requirements for companies operating in or connected to the EU. Reporting under the European Sustainability Reporting Standards (ESRS), companies must disclose detailed climate information, including Scope 1, 2, and 3 emissions, using a double materiality approach and with increased assurance expectations.

Learners examine the GHG Protocol’s goals, structure, five accounting principles, and how it underpins leading disclosure frameworks such as the ISSB and the CSRD.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

“Show me Altiorem resources on the Greenhouse Gas Protocol and how it guides global carbon accounting.”

Reflection questions:

1. How do the GHG Protocol principles ensure transparent and comparable emissions data?

2. Which elements of the protocol are most important for my sector?

3. What risks arise when organisations use inconsistent methodologies?

4. How does protocol-aligned reporting support investor confidence?

5. How does the GHG Protocol underpin regulatory disclosure obligations?

3. Boundary Setting for Carbon Accounting

This section explains how organisations establish the boundaries for their carbon reporting. It covers organisational boundaries (equity share, financial control, operational control) and operational boundaries (Scope 1, 2, and 3 emissions). Learners examine why boundary setting is critical for accuracy, consistency, and comparability.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

“Show me Altiorem resources that explain organisational and operational boundary setting for carbon accounting.”

More reflection questions:

1. Which boundary-setting approach best reflects my organisation’s governance and reporting structure?

2. How do boundary decisions influence reported emissions totals?

3. Why is transparency in boundary decisions important for stakeholders?

4. How do boundaries shape investor assessments of climate risk?

5. What problems might inconsistent boundary-setting create over time?

4. Scope 1 Emissions: Direct Operational Impacts

This section focuses on Scope 1 emissions, which are direct emissions from sources owned or controlled by an organisation. Examples include stationary combustion, company-owned vehicles, fugitive emissions, and on-site industrial processes. Learners examine common measurement methods, materiality considerations, and data-collection challenges.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

“Show me Altiorem resources that explain Scope 1 emissions and their role in organisational carbon footprints.”

More reflection questions:

1. How do operational processes influence the scale of Scope 1 emissions?

2. Which data sources are required for accurate Scope 1 reporting?

3. How can emissions reduction initiatives improve operational performance?

4. Why is verifying direct emissions important for credibility?

5. What risks arise from underreporting Scope 1 emissions?

5. Scope 2 Emissions: Purchased Energy

This section explores indirect emissions from purchased energy. Learners examine the differences between location-based and market-based methods, how energy procurement affects emissions totals, and the role of RECs, PPAs, and renewable energy commitments.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

“Show me Altiorem resources on Scope 2 emissions and the difference between location-based and market-based reporting.”

More reflection questions:

1. How do my organisation’s energy procurement choices influence its Scope 2 emissions?

2. How do renewable energy purchases reduce Scope 2 emissions?

3. What challenges exist when comparing Scope 2 disclosures across companies?

4. How does electricity-grid intensity affect emissions calculations?

5. How do energy-efficiency policies support Scope 2 reductions?

6. Scope 3 Emissions: Value-Chain Impacts

This section examines Scope 3 emissions across the entire value chain, using the GHG Protocol’s 15 categories. Learners explore common hotspots, calculation methods, data-quality issues, and why Scope 3 often accounts for the majority of an organisation’s footprint.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

“Show me Altiorem resources that explain Scope 3 emissions, value-chain impacts, and the 15 emissions categories.”

More reflection questions:

1. Which Scope 3 categories are likely to be most material for my organisation?

2. What role do suppliers play in data accuracy?

3. How might Scope 3 emissions alter investment or procurement decisions?

4. Which categories are most relevant in your sector (e.g., financed emissions, purchased goods, use of sold products)?

5. How can value-chain engagement support material emissions reductions?

7. Carbon Footprinting for Organisations

This section brings together all emissions categories to show how organisations calculate and report their full carbon footprint. Topics include data collection, emissions factors, calculation tools, quality assurance, verification, and disclosure requirements. Learners explore how organisations use carbon data to create reduction strategies, set science-based targets, and inform investor communications.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

“Show me Altiorem resources on organisational carbon footprinting, reporting best practices, and emissions verification.”

More reflection questions:

1. What systems, processes, or tools could my organisation strengthen to improve carbon data quality?

2. Why is independent verification essential for investor-grade reporting?

3. Which reduction strategies can be informed by strong emissions data?

4. How can organisations integrate carbon footprinting into annual reporting cycles?

5. How can emissions reporting help build trust with investors and stakeholders?

8. PCAF: Portfolio Carbon Accounting

This final section introduces the Partnership for Carbon Accounting Financials (PCAF); the global standard for measuring and disclosing emissions financed by financial institutions. Learners explore the purpose of PCAF, asset-class-specific methodologies, the concept of data quality scores, and how financed emissions support portfolio decarbonisation, ESG integration, and climate-risk assessment.

Participants will understand why PCAF is crucial for banks, asset managers, asset owners, and other capital allocators seeking to measure the emissions associated with loans and investments.

Alma prompt:

Enter the following prompt into our virtual assistant, Alma (found at the bottom right corner of the screen) to gather relevant reports, guides, and case studies from the Altiorem Library. Explore the various resources provided. You can chat with individual reports to explore them more deeply, including by using the reflection questions below. Be sure to cross check and ask clarifying questions if you don’t understand a concept or term.

“Show me Altiorem resources that explain PCAF, financed emissions, and portfolio carbon accounting methods.”

More reflection questions:

1. Why is it important to use PCAF metrics in combination with other climate and ESG indicators rather than in isolation?

2. Which PCAF asset classes (e.g., listed equity, corporate bonds, mortgages, project finance) are relevant to your organisation?

3. How do PCAF data-quality scores influence portfolio carbon assessments?

4. What challenges might financial institutions face when collecting data from investee companies?

5. How can PCAF disclosures support climate-aligned lending, investment strategies, and engagement activities?

Review Quiz