Every day we hear about more businesses that are making carbon reduction and sustainability commitments. Behind each goal and commitment, there needs to be accounting that keeps track of progress. This builds accountability into company sustainability and gives consumers, investors, stakeholders, and company staff something tangible to rally around.
What is Carbon Accounting?
Carbon accounting keeps track of your company’s emissions so that you can set targets and then stay within your carbon budget. Also known as a greenhouse gas (GHG) inventory, carbon accounting measures direct and indirect carbon emissions (which we’ll touch on later).
By putting carbon into numbers, your company’s sustainability efforts become tangible. This is foundational to sustainability reporting of course. But, it also makes it easier for leadership to make strategic decisions, for marketing and public relations to share information with the public, or for sustainability officers to achieve their goals.
Identifying Carbon Reduction Opportunities
Many companies strive to be carbon neutral, meaning the business emits no more carbon dioxide than it avoids, offsets, or removes. This requires knowing exactly how much carbon you release and then offsetting what you release into the atmosphere. If you’re aiming higher, carbon negative companies (AKA climate positive for the “glass-half-full” folks) remove or offset more carbon than they release.
No matter your goals, carbon accounting helps you identify where, when, and how your company emits carbon dioxide and other greenhouse gases. From there, you’ll see how achievable it is to reduce emissions. This will fall into one of three categories or scopes:
Direct emissions (Scope 1): This includes carbon from company facilities and vehicles. Some actions that reduce direct emissions include:
- Using electric or hybrid vehicles in your fleet.
- Choosing lower emission refrigerants and maintaining HVAC and refrigerant systems to avoid leakage.
- Replacing on-site vehicles, such as forklifts, with electric-powered versions.
Indirect emissions (Scope 2 & 3): Purchased electricity and emissions from supply chains are often big contributors here.
Some ways to reduce these emissions include:
- Shifting toward renewable power.
- Using energy-efficient HVAC systems, plumbing, and lighting fixtures.
- Tracking carbon released from employees’ work commutes and work trips to identify opportunities for virtual meetings and telecommuting.
The Importance of Supply Chain Emissions
Up to 70% of carbon emissions occur in the supply chain of many companies. This explains why there is new and heightened attention in this area. While it may be a challenge to work with partners and vendors, it may be the area where you can make the biggest difference.
Some quick tips to reduce your supply chain carbon footprint include:
- Working with local suppliers of raw goods and products to lessen carbon emissions during transport.
- Partnering with companies that produce and source sustainably.
- Reviewing vendor and partner sustainability plans – see if they are taking action and understand their targets and timeframe.
- Reducing waste in production and packaging.
Getting Started with Carbon Accounting
First and foremost, build GHG tracking and reporting across all departments. And if you want to take it a step further, consider implementing internal carbon pricing. Internal carbon pricing places a monetary value on GHGs to build accountability into business practices. To get started, you’ll need to document the data. This can be done manually or within a tool such as SustainaBase.
According to the Carbon Disclosure Project, almost half of all large businesses, including mega-corporations such as Microsoft, implement internal carbon pricing. Long story short, it works! For example, the OECD reported a 73% reduction in the UK’s carbon footprint for electricity consumption due to an increase in carbon pricing from 7 Euro to 36 Euro per tonne of CO2.
Wondering where to look for carbon accounting resources? Look no further:
- Over 90% of Fortune 500 companies use the GHG Protocol to define and guide the reporting of their carbon use to the CDP.
- See how you compare to industry competitors by viewing the annual data from the EPA’s Greenhouse Gas Reporting Program, made public every October.
- If you’re struggling to collect data from disparate internal sources, need help organizing the data, or could use a hand preparing carbon emission reporting, SustainaBase offers the platform to do it for you. This shifts your time from wrestling with data to implementing real change across the organization.
Carbon Accounting: Getting Hip with Numbers
It’s easier to find the opportunities within your business once carbon accounting pulls the data together to reveal your best bets. So whether your company is working towards carbon neutrality or just wants to take a small step forward, start with carbon accounting.
Accounting might not have a reputation as being the coolest thing. But, when it comes to corporate sustainability, carbon accounting should be the life of the party. After all, you’re proving company progress you can celebrate internally while giving consumer-facing teams the tools to shout your achievements from the mountaintops and be a role model for others.
Are you looking to take the next step? SustainaBase is here to help streamline carbon reporting and your entire sustainability program.