If you've never had to report on your carbon emissions before, you might be surprised at how quickly that's changing. Not because of a new law landing on your desk, but because your customers are asking.

Why this is landing on SME desks now

Large organisations with their own sustainability obligations are increasingly pushing that requirement down their supply chain. If a big customer needs to report on its Scope 3 emissions - the indirect emissions across its value chain - your business becomes part of their reporting problem, whether or not you have any legal obligation yourself.

Creative Computing's own guidance on this sets out the compliance picture clearly: the EU's Corporate Sustainability Reporting Directive (CSRD) requires organisations operating in the EU, regardless of size, to report on emissions by 2027, and while CSRD doesn't yet apply directly to UK businesses, similar legislation is widely expected to follow. But the commercial pressure is arriving faster than the regulation. Customers and supply chain partners are increasingly expecting suppliers to demonstrate progress towards net zero as a condition of doing business — which means sustainability reporting is becoming a sales and procurement issue as much as a compliance one.

That reporting typically spans three areas: Scope 1 (direct emissions from things you own or control, like company vehicles), Scope 2 (indirect emissions from purchased energy, like office electricity and heating), and Scope 3 (everything else in your value chain - suppliers, transport, waste, and how customers use what you sell).

What Business Central's sustainability module actually captures

Microsoft has built sustainability management directly into Business Central, and it's worth being precise about what that means in practice. According to Microsoft's own documentation, the module is designed to help you monitor and manage your environmental impact by tracking greenhouse gas emissions alongside water and waste intensity, gathering data through sustainability journals, general journals, or purchase documents, and recalculating everything into a common CO2 equivalent (CO2e) figure.

Practically, that breaks down into a few core capabilities:

• Emissions data collection. You can capture emissions manually through sustainability journals, or pull data in from purchase invoices when you've enabled emissions tracking on purchase documents, via sustainability setup.
• Scope-based tracking. The module organises emissions using the standard GHG Protocol scopes - 1, 2 and 3 - plus an "out of scope" category for emissions that fall outside those definitions.
• CO2e calculation and carbon fees. Business Central calculates a CO2e figure across all posted emissions, and you can configure emission fees to work out internal carbon costs, including retrospectively if you didn't set fees up before posting.
• Reporting and analytics. Built-in sustainability reports, including a Power BI–based Sustainability Overview report, give you emissions, water and waste data broken down by category, scope and month, alongside Excel-based reporting and analysis views.
• Copilot and carbon credits. Microsoft's 2025 release wave 1 plan describes Copilot support for estimating your carbon footprint where emission factors aren't already in the system, and the ability to purchase carbon credits directly within Business Central.

What it doesn't do for you

None of this replaces having someone who owns the process. Business Central gives you the structure to collect and calculate emissions data - it doesn't go out and gather that data on its own. Purchase invoices and journals still need emission factors configured correctly, or imported from an external source, before the numbers mean anything. Copilot's estimation helps you fill gaps, but it's an aid, not a substitute for accurate underlying data. And the module gives you the reporting and analysis tools; it doesn't file anything with a regulator or produce an assured, audit-ready CSRD disclosure on your behalf. Someone in your business still needs to decide what to measure, keep the data flowing in, and interpret what the reports are telling you.

Realistic first steps if you don't have an ESG function

You don't need a sustainability team to start. A sensible starting point looks like: agree which scope 1 and 2 sources you can measure now (fuel, electricity, heating), get sustainability set up configured in Business Central so purchase documents can carry emissions data, and pick two or three KPIs that actually matter to your business and your customers, rather than trying to report on everything at once. Scope 3 can come later, once the basics are running.

If a customer questionnaire has already landed on your desk, or you'd rather get ahead of one, speak to Creative Computing about setting up sustainability reporting in Business Central. We'll help you work out what to measure first and get the module configured around it.