Carbon Accounting

What is Carbon Accounting?

Carbon accounting is the process of measuring and documenting the emissions produced by a company, entity, or product. It forms a fundamental part of environmental management and sustainability reporting, helping businesses understand and manage their impact on the environment.

Key Components of Carbon Accounting

Data Collection: Gathering data on all emissions activities, including energy consumption, transportation, and manufacturing processes.
Emission Factors: Applying emission factors to activity data to calculate the GHG emissions in terms of tons of Carbon Dioxide equivalents (tCO2e).
Scope of Emissions: Emissions are categorised into Scope 1 (direct emissions from owned sources and activities), Scope 2 (indirect emissions from energy usage), and Scope 3 (all other indirect emissions in the value chain & supply chain).

Why is Carbon Accounting Important?

Companies looking to carry out effective decarbonisation strategies have to implement effective carbon accounting practices. It is incredibly difficult to conduct effective decarbonisation without carbon accounting, as this process helps companies to pin-point what their emissions are, where reductions can take place, as well as measuring the progress in their decarbonisation.

Carbon accounting is also essential for companies who wish to comply with environmental regulations, report to investors, and/or improve their public image by virtue of their sustainability practices.

Methodology and Standards

CSRD timeline for when companies need to comply with reporting regulations — **CSRD**

The Greenhouse Gas Protocol: This provides standards and guidance for quantifying and reporting on GHG emissions.
ISO Standards: The ISO 14000 family of standards offer a management system for quantifying, monitoring, and reporting on GHG emissions and removals.
Regulatory Compliance: Companies need to be aware of regional and national regulations on GHG emissions reporting and reduction.

Integrating Carbon Accounting into a Decarbonisation Strategy

Set Emission Reduction Targets: Carbon accounting data can help with setting science-based emission reduction targets by giving companies an idea of their emissions, which is the first step of a decarbonisation strategy.
Operational Changes: Understanding where emissions are occurring can help companies to make informed decisions on operational changes in-line with their decarbonisation plan. These changes can include things such as optimising manufacturing processes, or changing the office lights to energy saving lightbulbs.
Stakeholder Communication: Carbon accounting data can be implemented into sustainability reports to communicate progress and strategies to stakeholders.
Continuous Improvement: Regularly update carbon accounting practices to reflect changes in operations and advancements in standards.

How to Get Started with Carbon Accounting?

Initial Assessment: Identify major emission sources within your organisation and operations.
Select Tools and Software: Choose appropriate carbon accounting tools for accurate tracking and calculations.
Internal and/or External Expertise: Look into bolstering your internal carbon accounting expertise, or find a trusted carbon accounting partner.
Baseline Establishment: Establish your baseline emissions in order to track progress.
Stay Updated: Make sure you are up to date with carbon accounting standards and regulations.