In recent years, more and more businesses are recognising the importance of carbon accounting. As regulators, investors and consumers become increasingly concerned about the environmental impact of the products and services driving our economy, companies are under pressure to demonstrate their commitment to sustainability.
Carbon accounting is the measuring and managing of a company's greenhouse gas emissions, allowing businesses to disclose their emissions and make informed decisions when managing their carbon footprint.
Carbon accounting is the process of measuring, reporting, and managing a company's emissions. It allows businesses to:
For enterprise businesses, carbon accounting can be particularly challenging, as they often have a large and complex operational footprint that generates significant emissions.
Carbon accounting is also increasingly important for companies looking to demonstrate their commitment to sustainability to regulators, investors, consumers and other stakeholders. With the right tools and strategies in place, enterprise businesses can implement robust carbon accounting practices, allowing them to meet climate disclosure requirements and take action to reduce their carbon emissions.
There are several different carbon accounting standards that companies can use to measure and manage their greenhouse gas emissions. One of the most common standards is the GHG protocol, which provides guidelines for companies to follow when calculating their emissions.
The GHG protocol was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), and it has become the most widely used standard for corporate greenhouse gas accounting. While it is the most widely used, the GHG Protocol is not the only reporting framework that can be used. Other methodologies that are either alternatives or complimentary to the GHG Protocol include:
Each of these methods has its own strengths and weaknesses, and the best approach will depend on a company's specific needs and circumstances.
Organizations need to measure their greenhouse gas (GHG) emissions when conducting carbon accounting. GHGs are gasses that trap heat in the atmosphere, causing global warming and climate change.
The impact of greenhouse gasses collectively are typically quantified in terms of Carbon Dioxide equivalence (CO2e). As GHGs have different residence times in the atmosphere and vary in their efficacy of trapping radiation, their climate impact is normalized against the effect of CO2 based on a metric known as Global Warmng Potential (GWP).
1-Based on IPCC Asessment Report 5 (2013)
For any quantity and type of greenhouse gas, CO2e signifies the amount of CO2 which would have the equivalent global warming impact. For example, for 1kg of Methane that is emitted, this would be expressed as 28 kgCO2e.
Carbon accounting involves measuring and reporting the emissions of these gasses across an organization's entire value chain, including:
To conduct carbon accounting effectively, organizations need to collect and analyze data on all of their carbon emissions. This data can then be used to calculate the organization's carbon footprint and identify opportunities for reducing emissions.
Carbon accounting is becoming increasingly important from a financial perspective because it provides a way for companies to identify and manage their environmental risks and opportunities. Here are some reasons why carbon accounting is important:
Carbon accounting involves the collection, calculation, verification, and reporting of greenhouse gas emissions from an organization or activity. It provides a framework for organizations to measure and manage their carbon footprint, set reduction targets, and track progress over time. When you work with carbon accounting specialists such as Minimum, the steps generally taken are:
If your business is new to carbon accounting or has complex operations that need to account for scope 1, 2 and 3 emissions, then you’ll get a more accurate depiction of your carbon output and plans for reduction by working with specialists in this field.
Yes, there is a difference between carbon accounting and the GHG protocol. Carbon accounting is a process of measuring, quantifying, and managing a company's greenhouse gas emissions, while the GHG protocol is a widely accepted standardfor developing and implementing corporate greenhouse gas accounts adopted by many reporting frameworks, both voluntary and regulatory..
In other words, carbon accounting is the actual practice of measuring a company's emissions, whereas the GHG protocol provides guidelines for how that accounting should be done.
A product carbon footprint considers the emissions associated with a product or service throughout its entire life cycle. It takes into account all of the energy and material inputs, emissions, and waste generated throughout each stage of the product's life, including:
To see how Minimum's Emissions Data Platform can streamline carbon accounting for your organization, book a demo with our Sustainability Experts today.