Overcoming the Top 3 Challenges of Carbon Accounting

A Practical Approach with Consultancy Expertise

What is Carbon Accounting?

Carbon accounting is the systematic process of measuring, monitoring, and managing the greenhouse gas emissions (GHGs) produced directly or indirectly by an organization. It serves as a critical tool for businesses to quantify their carbon footprint and understand their impact on the environment. At its core, carbon accounting involves assessing emissions across various scopes, including Scope 1, Scope 2, and Scope 3.

There is a growing demand for Carbon Accounting support as organizations seek to measure, track, and report on their carbon footprint. In this article, we will outline the top 3 challenges that most organizations encounter in this process.

Challenge 1: Setting Organizational and Operational Boundaries

One of the initial steps in carbon accounting is defining your organizational and operational boundaries. For large organizations with complex operations, this can be particularly challenging. Consultants can assist by devising a phased approach and recommending starting points based on projected emissions and industry considerations. Once organizational boundaries are established, attention shifts to operational boundaries, determining which sources to include and categorizing them. While Scope 1 and 2 emissions are commonly included, Scope 3 presents additional complexities, especially for organizations aiming to influence their supply chain to reduce emissions.

Challenge 2: Scope 3

Scope 3 emissions present a considerable challenge due to the diverse range of sources they encompass. Analyzing and identifying key emissions sources while determining relevant metrics is essential yet daunting. At CHS, we have a client in the Fintech industry, who’s carbon inventory efforts predominantly focused on Scope 3 emissions. Our task was to help them identify relevant emissions and prepare for future regulatory requirements. Read more about the business case below:

Challenge 3: Data Collection, Calculation, and Analysis

Many organizations initially rely on Excel for carbon accounting, but as data complexity increases, Excel’s limitations become evident. Human errors can occur when handling large datasets, complex conversions, and calculations. Organizations may then consider alternative software solutions. Consultants can assist in selecting the most suitable software based on organizational needs and growth plans. Additionally, preparation work for software integration is often overlooked. At CHS, we specialize in setting up systems for data collection, calculation, and analysis, ensuring a smooth transition to carbon accounting software integration.

Book a session with us to discover how we can assist you in overcoming these challenges and streamline your carbon accounting processes.

Additional Resources for Carbon Accounting 101: 

Breeze, Introduction to Carbon Accounting 

GHG Protocol, A Corporate Accounting and Reporting Standard – Training Curriculum