What Is Carbon Accounting?
Carbon accounting is the process of quantifying a company's GHG emissions. By doing this, businesses can get a better understanding of their environmental impact and set goals for reducing their emissions.
This article is intended for organisations that wish to learn more about?carbon accounting?and what solutions are available to help reduce emissions.
We will cover what you need to know about financial carbon accounting, scopes of emissions, and a brief description of how to utilize Net0's?carbon accounting platform?to guide you along your net zero journey.
What is the importance of carbon accounting?
Carbon accounting is essential for companies, governments, and other organisations. There are a few reasons why businesses should?measure?their carbon emissions.
First, by understanding how much carbon is released, businesses can develop strategies to?reduce emissions?or consider investing in?offset projects. This can help them save money and fight against climate change.
Second,?carbon accounting?can also help organisations track the impact of their decisions on the environment. This information can help inform decision-making processes and allow companies to?make more sustainable choices.
In addition,?emissions reporting?helps to create transparency and accountability around a company's carbon emissions. This is important because it helps investors and consumers make informed decisions about where to put their money.
Finally, measuring carbon footprint can also help businesses?comply with government regulations.
How can companies measure greenhouse gas emissions?
The?Scope 1, 2 and 3 system?has been developed by the Greenhouse Gas Protocol. Dividing emissions into three groups is intended to help measure progress in making the huge reductions in emissions needed to meet global targets.
- Scope 1 emissions are direct emissions from owned or controlled sources, such as boilers, furnaces, machinery, fuel combustion, and vehicles. Mandatory reporting is required in many regions worldwide.
- Scope 2 emissions are indirect emissions from purchased sources like electricity, heating, cooling, gas, steam, and electric vehicles. Industries like aluminum production, cement production, and data centers often have high scope 2 emissions, and reporting is increasingly mandatory.
- Scope 3 emissions include all other indirect emissions in a company's value chain, with 15 categories of corporate value chain emissions. Reporting requirements are evolving and becoming more complex, prompting businesses to measure and report scope 3 emissions.
10 factors to consider when choosing the right carbon accounting software for your business:
1) Ease of integration: How easily can the carbon accounting software be integrated into your existing systems?
2) Data sources: What sources of data can the software access and use?
3) Reports: What type of reports does it generate?
4) Automation: How much automation is available?
5) Cost: What are the costs associated with using the software?
6) Customisation: How can the software be customised to meet specific needs?
7) Security: What kind of security measures are in place to protect data?
8) Support: What kind of customer support is available?
9) Scalability: How easily can the software scale to meet increased needs?
10) Compliance: Does the software comply with local, state and federal regulations regarding carbon emissions reporting?
Challenges in carbon accounting and how Net0 addresses them
1. Data accuracy
One challenge with carbon accounting is that it requires accurate data on a company's carbon emissions.
This data can be difficult to come by, as it requires monitoring of all activities that result in emissions (such as fuel consumption, electricity use, waste disposal, etc.). When it comes to collecting scope 3 emissions, companies require to collaborate with their suppliers across the supply chain to have an accurate understanding of the emissions. That can be a challenge on its own as it requires cooperation from multiple entities.
Net0’s platform solves this challenge with its?integrated data collection?and analysis capabilities. Net0 provides a carbon accounting platform for collecting data from all sources and performing detailed analysis to create an accurate picture of the company’s emissions across scope 1, 2 and 3. To collect accurate data for Scope 3 emissions specifically, Net0 offers a vendor outreach programme that allows businesses to effectively communicate with vendors, add them directly to the platform and?automate data capture?from them.
2. Ineffective data collection
Many businesses find data collection expensive and time-consuming. In reality, many businesses spend too many resources on trying to manually record the data and have no time to focus on what matters the most: achieving carbon reduction targets by reducing emissions for good.
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This is why Net0 believes that?putting carbon accounting on autopilot?is essential for modern businesses. By using powerful?AI-driven tools, Net0 automates data capture, ensures data quality, connects ERP, CRM and other systems with organisations' out-of-the-box integrations and offers API access to developers. Net0 convert business data to CO2e metrics automatically, with minimal effort from the team.
3. Complex process
Calculating carbon footprint can be complex, as there are?different methodologies?for doing so. It can be difficult to understand the different methodologies, choose the right one for your business and effectively implement them.
Net0’s platform helps businesses simplify the process by offering all three methodologies and finding the right one to use depending on each case. Whether your business chooses the activity-based approach, the spend-based methodology or the hybrid one, Net0 will support you throughout the process, helping you to accurately calculate emissions and achieve your?net zero emissions targets.
4. Other challenges
Once businesses are done with the first step of measuring carbon footprint, organisations might face more challenges with carbon management on the way to?carbon neutrality?and then?net zero. Some of them might include challenges with reducing corporate carbon footprint, reporting carbon emissions in real-time and sharing the journey transparently with other stakeholders in the ecosystem. Net0 also helps to?tackle these challenges?by offering a range of solutions that make carbon management easy and transparent.
Carbon accounting in corporations
To comply with laws and regulations it is becoming the norm globally to report scope 1 and 2 emissions at the very least. Scope 3 value chain emissions are being reported now amongst value chains that want to decrease their negative environmental impacts and stay competitive where consumers are turning to greener brands. Another motivation is that investors have been shifting their resources only to sustainable brands. In fact, the demand for?ESG?investment options has been escalating for years according to a study by the Harvard Business Review.?
How do I start with carbon accounting?
If you're looking to get started with carbon accounting, Net0 is the?perfect solution. With our powerful platform, businesses can quickly and easily measure their carbon footprint and take steps towards reducing greenhouse gas emissions. Here's how to get started:
1)?Request a demo?and sign up for Net0.
2) Connect your business systems to our platform, including ERP, CRM and other systems.
3) Collect your emissions data automatically, with minimal effort from your team.
4) Use our intuitive platform to manage your carbon footprint data and track your progress towards net zero.
With Net0, getting started with carbon accounting is easy and efficient. We provide all the tools you need to get started quickly and achieve your net-zero targets.?Contact us?today to learn more!
To conclude
In summary, carbon accounting is a method of measuring an organisation's greenhouse gas emissions, which provides valuable insights into its environmental footprint. This practice is increasingly becoming mandatory for?large businesses,?public companies, and?government entities. Carbon accounting enables these organisations to establish and work towards targets for reducing their carbon emissions, ultimately contributing to the global effort to combat climate change.
Net0?is the only emissions management platform you will need for your carbon accounting solution. The platform calculates all corporate CO2 tonnage for you and categorises it into the 3 scopes for you. Net0 not only automates carbon accounting, but it also frees up time and resources for your sustainability team so they can focus on more important things such as creating strategies to reduce carbon emissions.
Schedule a demo?today to experience the platform for yourself and learn how it can make carbon accounting more efficient in your organisation.
This article has been adapted from the original piece published on net0.com
Recommended reading:
For further information and a deeper understanding of carbon accounting, we highly recommend reading?our comprehensive blog?and?downloadable resources?on the subject.
? Article:?How Are Carbon Emissions Measured?
? Article:?Carbon Emissions and Mitigation Strategies