Understanding which sites need to measure the environmental metrics

• Which sites are in scope of ESC1.1 - ESC1.4?
• When to begin measurement 
• When direct measurement is challenging
• Terms and definitions

Under the Environmental Stewardship & Circularity (ESC) Impact Topic, five sub-requirements ( ESC1.1 –ESC1.5) ask companies to monitor specific environmental metrics across their operations. In addition, ESC1.6 asks that the company monitors the animal welfare conditions in its operations. This requirement only applies to companies directly involved in the handling, transport, or slaughter of animals.

This article focuses on ESC1.1 –ESC1.4. These sub-requirements share the same scope. The guidance below explains:

• which sites must be included,

• when measurement must begin, and

• how to approach situations where direct measurement is not feasible.

Note: ESC1.5, which requires companies to identify facilities located in or near ecologically sensitive areas, has a narrower scope than ESC1.1– ESC1.4. It applies only to manufacturing and production sites, as proximity to ecologically sensitive areas is primarily a risk associated with locations that have a direct physical production footprint.

Which sites are in scope of ESC1.1 - ESC1.4?

These sub-requirements apply to any site where the company has operational control. This means a company (or a subsidiary) has the authority to implement environmental policies and manage related practices at that location.

A way to test whether operational control exists is to ask – does your company have the authority to change environmental practices at this site? 

Examples where operational control exists:

• Company owned office or factory, where you can install energy meters, change waste contractors, and set recycling policies without restriction.

• Leased office where your company manages its own utilities and waste collection. The lease does not remove operational control if your company can implement its own environmental policies within the space.

Example where operational control does not exist or only partially:

• Leased office in a building where the landlord controls heating, cooling, waste, and utilities. Your company cannot unilaterally change how energy is managed or waste is handled. It may still have control over some metrics — for example, its own waste streams within the office — but not others.

These sub-requirements might not apply to every site in a company’s certification scope. B Lab  has updated its definition of a "site" to focus on activity-based control. This "activity-based" approach ensures all your workers are included in the certification, even if you don't fully control the site's environmental management. For more details on how to determine your certification scope, see Certification Scope Requirements.

If your company excludes a site because you don’t have operational control, you must document the reason. The documented rationale should clearly state what your company can and cannot control, and name who else is responsible – for example, “The building owner manages all utilities and waste.”

When to begin measurement 

Medium and larger companies — Phased approach

We recognize that collecting environmental data across multiple sites can be complex. To support this, companies in the Medium to XX Large tracks may take a phased approach to expanding measurement coverage over time.

•       Year 0 (first year of certification):The company must track and record environmental metrics for all sites under its operational control that are linked to material environmental impacts, as identified in ESC1.7. This allows companies to prioritize sites where environmental impacts are most significant and where data is most likely already being tracked.

•       Year 5: The company must extend measurement to all sites under its operational control. No exemptions apply at this stage. Where direct measurement is not feasible, companies may use estimates or proxy calculations as a last resort. 

Micro and small companies — No phased approach

The phased approach described above does not apply to companies in the Micro or Small tracks, as they are outside the scope of ESC1.7.

These companies, which typically operate fewer sites, must meet the requirements of ESC1.1– ESC1.4 across all sites under their operational control from Year 0 onward. Where direct measurement is not feasible, estimates or proxy calculations may be used as a last resort.

When direct measurement is challenging

In some rare cases, direct measurement of environmental metrics may be challenging at sites under the company’s operational control. In such cases, as a last resort, companies may use reasonable estimates for these specific sites, provided the estimates are based on credible, available information and are applied consistently across reporting periods. Examples include:

•       Water (ESC1.3 / ESC1.4): Estimate consumption using utility invoices, even if they reflect aggregate building use rather than company-specific use.

•       Waste (ESC1.1): Approximate waste generation based on bin volume and collection frequency.

•       Energy (ESC1.2): Use floor area and sector-level benchmarks to estimate energy consumption where metered data is unavailable.

If estimates are used, the company should document:

• The estimation method applied

• The benchmarks or conversion factors used, drawn from publicly available sources recognised within the relevant industry or jurisdiction, such as national statistics agencies, sector bodies, or established environmental databases

• Any assumptions made

• Why direct measurement was not feasible

The assurance provider will assess whether the documentation is sufficient. 

Terms and definitions

Facility: Facility and site are used interchangeably in the standards and have the same definition (see Certification Scope Requirements).

Production site / Manufacturing site: A distinct physical site or managed agricultural area where industrial, agricultural, chemical, biological, mechanical, or manual processes transform raw materials, components, or semi-finished goods into new finished or intermediate products.

This definition excludes sites where activities are solely limited to storing, packaging, sorting, or combining already finished goods that do not materially transform the products and do not apply chemical or large-scale industrial processes. For example, a site that assembles gift baskets using only finished items would be excluded. In contrast, a site where a handbag is manually constructed from raw or semi-finished materials (e.g. cut fabric or leather pieces) would be included.