Carbon accounting is a way for companies to quantify and report their CO2 emissions.
Carbon accounting - also known as climate accounting or carbon accounting - is a crucial factor for successful businesses of the future that want to quantify and reduce their climate impact. But what exactly is carbon accounting and how can it help your business become more sustainable?
What is a carbon footprint?
Carbon accounting is a way to measure and report your company's greenhouse gas emissions, including CO2. By collecting data on energy consumption, production, transportation and other activities, your company can calculate your total CO2 emissions and identify areas where you can reduce your carbon footprint.
"45% of consumers are ready to stop buying from their favorite brands if they refuse to calculate their CO2 emissions."
- Study by the Carbon Trust
This trend has more than doubled from last year, with only 22% of respondents agreeing with the statement.
Carbon accounting is not only good for the environment - it can also have financial benefits for your business. By identifying inefficiencies and reducing emissions, businesses can save money on energy bills and other costs.
If your company wants to implement carbon accounting, there are several tools and services to help you get started. You may also consider hiring an expert to help you set up and manage your carbon accounting.
Uanset hvad, er CO2-regnskab en vigtig del af enhver bæredygtig forretningsstrategi i 2024 og fremover. Hvis din virksomhed ikke allerede har implementeret CO2-regnskab, er det på tide at komme i gang. Hvert år indføres der mere omfattende regulativer, der kræver, at flere virksomheder fører CO2-regnskab- og rapportering.
How to draw up a carbon footprint?
When implementing carbon accounting, there are several steps you can take to do it most effectively. First, you need to identify your carbon sources and collect data on your company's activities and energy consumption. This can include everything from transportation and production to electricity use and paper consumption.
Our approach to the CO2 calculation is usually that we start by mapping the rough overview of the company's CO2 emissions. This is most easily achieved by mapping the company's consumption-based emissions.
Climaider's carbon accounting software has automated much of this process by integrating with your accounting software.
- Try the product for free here
The consumption-based emissions save a lot of hassle and ensure that there are no gaps in the carbon accounts due to administrative hassle in collecting data. In just a few minutes, we can cover your entire carbon footprint. The calculation based on consumption-based emissions is less precise, but provides a good starting point and overview for further work on your company's carbon accounting.
The next step adds more precision to the CO2 calculation while providing more actionable data for your company to act on. Here, the goal is to calculate the activity-based emissions of the company's most CO2-intensive emission items.
Lastly, we have the top layer of complexity in the CO2 accounts: supplier-specific emissions. Here the data is upgraded once again, adding the exact emissions from your specific suppliers. This part typically requires your company to perform a Life Cycle Assessment (LCA).
When we make CO2 calculations for companies, we always use the Greenhouse Gas Protocol (GHG Protocol) and Scope 1, 2 and 3. This is the most common methodology and internationally recognized best practice. We strongly recommend that you do the same. Here you can see an overview of the GHG Protocol and which emission categories are associated with Scope 1, 2 and 3 respectively:
How to make the most of your carbon footprint
The level of precision and complexity of the carbon accounting is up to the company itself to assess the necessity. In general, we recommend that you at least include both consumption- and activity-based emissions. If you want to add the final layer of precision, you will gain complete insight into the CO2 emissions from your value chain, but the process is also associated with great difficulty and high costs. For most smaller companies, it will be sufficient for your carbon accounting to be based on consumption and activity-based data.
A carbon footprint is not worth much if you don't understand the meaning of the numbers. Therefore, you may want to compare your company with industry averages to better understand your situation. A carbon footprint also helps you identify areas where you can reduce your emissions and improve the sustainability of your business.
However, it is only a start towards the ultimate goal: reducing your company's CO2 emissions. The carbon footprint has given you insights and data that you can act on. But it is ultimately up to the company to set targets to reduce its overall climate footprint. Using an external advisor like Climaider can help you verify your carbon footprint and help you develop a reduction strategy, so you don't have to start from scratch.
Finally, it is important to report your carbon emissions and progress to stakeholders, including customers, investors and authorities. This will help show your company's commitment to reducing its climate footprint and contributing to a more sustainable future.
Are there requirements to keep carbon accounts?
There are several standards and frameworks that you can use to guide your company's carbon accounting. Some of the most common include Greenhouse Gas Protocol (GHG Protocol), ISO 14064 and the Science Based Targets initiative (SBTi). These standards can help ensure that your company reports in a consistent and reliable way and in line with internationally recognized best practices.
The requirements for carbon accounting vary depending on the country and legislation. In Denmark, there is not yet a direct legal requirement to keep CO2 accounts, but this is on the way in connection with the Corporate Sustainability Reporting Directive (CSRD).
Companies with more than 250 employees will have to report on sustainability across the entire value chain. The requirements are expected to take effect for financial years starting on or after January 1, 2024.
However, there are currently a number of initiatives and standards that companies can follow to report their CO2 emissions and work to reduce them.
For example, companies can choose to follow the UN Global Compactwhich encourages companies to report on their CO2 emissions and take steps to reduce them. In addition, companies covered by the EU Emissions Trading System may be required to report their CO2 emissions and buy emission rights corresponding to their emissions.
In addition to these initiatives and standards, companies can also follow voluntary guidelines and standards, such as the Greenhouse Gas Protocol, ISO 14064 and the Science Based Targets initiative, as mentioned earlier.
As such, it is not only specific types of companies that are obliged to keep carbon accounts. Any company, regardless of size or sector, can choose to implement carbon accounting and take responsibility for reducing its climate footprint.
However, there may be some sectors or companies that have a larger carbon footprint than others and may therefore have greater incentives to undertake carbon accounting. This may include manufacturing companies, transport companies and energy companies, but also companies in other industries that have high energy consumption or high transportation costs. It can also be relevant for knowledge companies and hotels, as their image and brand in the eyes of their customers is of high importance. Consumers are putting more emphasis on sustainability in their purchasing process than ever before.
The road to Net-Zero and carbon offsetting
Ud over at implementere et CO2-regnskab kan din virksomhed også overveje at investere i CO2-kompensation. Dette indebærer at kompensere for dine CO2-udledninger ved at finansiere projekter, der reducerer CO2-udledninger eller øger CO2-optagelse, såsom skovrejsning eller clean cookstove projekter. Klimakompensation kan være en midlertidig løsning, mens din virksomhed arbejder på at reducere sine udledninger, men det kan også være en vigtig del af din virksomheds klimastrategi. Det kan det også bidrage til at booste din virksomheds brand, at I udover at tage ansvar for beregning og reduktion af virksomhedens eget CO2-aftryk, også bidrager til additionel CO2-reduktion gennem eksterne projekter.
Finally, it is important to remember that carbon accounting and reduction is a process that requires continuous effort and improvement. Your company must be willing to evaluate and adjust its strategy over time and continue to strive to reduce its carbon footprint. With the right commitment and approach, any business can significantly reduce its CO2 emissions and take an important step towards a more sustainable future.
Does it sound relevant for your company to get started with CO2 accounting? At Climaider, we have many years of experience with CO2 calculation, reporting and reduction. You can read more about how our software can help you get started with your CO2 accounting here.
Eksempel på et klimaregnskab opdelt i scope 1, 2 og 3
Herunder kan du prøve en demo af Climaiders værktøj. I demoen kan du se hvordan et klimaregnskab, der er compliant med GHG Protokollen, udformer sig, samt hvordan det kan benyttes til at imødekomme behov for klimaregnskab og rapportering i din virksomhed.
