Carbon accounting is the process of measuring, quantifying, and tracking the greenhouse gas emissions generated by an organisation or entity. It involves collecting data on various activities and operations that contribute to emissions, such as energy consumption, transportation, waste management, and production processes. Essentially, carbon accounting involves mathematically translating your business activities into measurable carbon emissions.
There are various terms used interchangeably with carbon accounting, including, but not limited to:
These terms all refer to the same concept: measuring your organisation’s CO2e (carbon dioxide equivalent). CO2e is a standardized unit that accounts for the warming effect of different greenhouse gases based on their global warming potential (GWP). For instance, one metric ton (MT) of methane has a warming effect 29.8 times greater than that of CO2 over the same period, making it equivalent to 29.8 metric tons of CO2e.
Given the urgent need to address climate change, managing our carbon footprint is crucial. But did you know that carbon accounting also offers several benefits to organisations? Here are some reasons why carbon accounting is good for business:
Overall, carbon accounting aligns business operations with environmental goals, drives cost savings, enhances reputation, and ensures compliance. It positions businesses strategically in a changing business landscape, enabling them to thrive in a low-carbon and sustainable future.
In simple terms, carbon accounting involves assessing your business's carbon footprint and converting the results into CO2 equivalent (MT CO2e). These mathematical calculations are complex and have traditionally required expert guidance. However, carbon accounting platforms like Avarni simplify the process by translating business activities (spend and activity data) into emissions outputs.
Here’s how to get started with carbon accounting:
These are broken-up into three types of emissions, or Scope 1-3 emissions:
Once you have identified the sources of your organisation’s emissions, you can begin calculating your carbon footprint. While organisations traditionally performed manual emissions calculations using a carbon accounting spreadsheet, they can now leverage purpose-built carbon management software such as Avarni to greatly automate this process. A robust solution will allow you to simply upload your spend data (procurement spend, utility bills, fuel receipts), or connect to your existing finance applications. It will then take the financial value of your purchased good or service and multiply it by an emission factor – the amount of emissions produced per financial unit – resulting in an estimate of the emissions produced. This will automatically calculate your company’s total emissions, and allow you to visualise its carbon footprint.
Because the vast majority of your company’s emissions likely come from its value chain, you should seek out a solution like Avarni that allows your suppliers to upload their own Scope 1-3 emissions into the platform. This will save time and effort on your part, while providing a comprehensive view of your value chain emissions and ensuring that all emissions associated with your organisation are accounted for. From there, you’ll be able to identify hotspots in your supply chain and start working on emissions reduction strategies.
Once you have measured your company's carbon emissions, you can begin to develop strategies for reducing them. Using a tool like Avarni allows you to forecast what your future emissions will look like under a number of different scenarios, such as switching to renewable energy sources, or working more closely with suppliers that have committed to net zero targets. These data-driven insights allow your procurement team to make more sustainable decisions and work collaboratively with suppliers to reduce shared emissions over time.
Finally, once you have a carbon accounting system in place, you can consider implementing a carbon offset program. This involves investing in projects that reduce emissions elsewhere, such as planting trees that absorb carbon dioxide or investing in renewable energy projects. Offsetting your company's carbon emissions can help make up for any emissions that your company is unable to reduce currently.
Carbon accounting can be perceived as a complex and daunting task, but with the right carbon management platform, like Avarni, it becomes significantly easier and more accessible.
Avarni simplifies the carbon accounting process by streamlining data collection, calculations, and reporting, eliminating the need for manual and time-consuming calculations. We automate the complex mathematical calculations involved in converting business activities into emissions outputs, ensuring accuracy and efficiency. This empowers you to streamline your carbon accounting processes, enabling you to focus on implementing effective emission reduction strategies and driving sustainability initiatives within your organisation.
Avarni makes carbon accounting a more accessible and manageable task for your organisations, supporting you in your journey towards a low-carbon future. Get in touch to get started today.