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Navigating the World of Carbon Accounting
Companies are under increasing pressure from consumers, investors, employees, and regulators to address their environmental impact and take meaningful climate action. However, climate action can take many forms depending on your organization’s size, budget, and priorities, making it challenging to figure out where to begin.
This post will guide you through how to get started with measuring your emissions, depending on where you are on your sustainability journey. Once you have a better understanding of what your accounting needs are, we’ll help you navigate the crowded carbon accounting landscape and identify the right tool for you with our comprehensive carbon accounting solutions database.
Our guide offers clear, unbiased guidance on emissions accounting. CNaught is not a carbon accounting provider and receives no compensation for referrals.. As experts in carbon mitigation, we understand that measuring emissions is a crucial step in any climate strategy. Our goal is to equip companies with the knowledge to determine when and how to measure emissions and identify the right tools for success.
Where Are You on Your Climate Journey?
If you are just starting on your sustainability journey, you’ll need to consider what kind of strategy aligns best with your company’s goals. Do you want to pilot a program to prove viability and impact? Should you focus on decarbonizing a specific area of the business? Or are you ready to implement a business-wide carbon neutrality or net zero goal?
Once you’ve decided on your sustainability path, you can get started by:
- Piloting a program to validate and scale: This is a great opportunity for companies who want to start taking climate action but aren’t ready to implement a business-wide strategy. Examples could include: offsetting travel to an annual company-wide event or the shipping of corporate holiday gifts.
- Targeting an area of the business: Some companies will focus on the emissions of a specific area of the business. Examples could include: offsetting the emissions of all corporate business flights, the shipment of all goods, the utilities used in your office, or offering a carbon-neutral product.
- Corporate-wide sustainability initiative: Nearly any required reporting or company-wide climate initiative requires full accounting of corporate emissions. Regulatory frameworks such as CSRD and California’s SB253 as well as corporate climate standards like the Climate Label, Climate Pledge, and SBTi all require comprehensive emissions calculation.
- If this is where your organization finds itself, you’ll likely need to find a carbon accounting solution to handle the measurement. Below, we walk through how to think about carbon management and break down the potential options in our comprehensive carbon accounting solutions database.
Carbon Management Framework
For organizations ready to measure their full carbon footprint, you will likely want to follow a carbon management framework. Current best practices for addressing any organization’s carbon footprint follow the framework of Measure, Reduce, Mitigate, and Report. This approach is widely reflected in many industry leaders’ guidance, including The Climate Pledge’s requirements, Microsoft’s sustainability programs, and Oxford’s frameworks.
- Measure: Measure your organization’s Scope 1, 2, and 3 emissions to establish a baseline. Only with this data can organizations accurately understand their carbon footprint and develop reduction and mitigation strategies.
- Reduce: Use insights from your measurement process to inform reduction strategies, such as energy efficiency upgrades and supply chain optimization. These efforts can both lower your overall carbon footprint and deliver significant cost savings. According to McKinsey, some companies with reduction strategies are seeing “up to 40 percent reductions in emissions and up to a 15 percent improvement in financial performance.”
- Mitigate: High-integrity carbon credits are the best tool for mitigating unavoidable emissions. These credits offer an immediate and cost-effective way to bridge the gap between current operations and future reduction efforts.
- Report: The final step is consistent and transparent disclosure of progress to stakeholders. Reporting builds trust and is required for major climate certifications, regulations, and voluntary frameworks like CDP.
Navigating the Carbon Accounting Solutions Landscape
So, you’re ready to implement a carbon management program and take the first step: measuring your carbon footprint. But as soon as you search for “carbon accounting solutions,” you’re met with dozens of options. With so many tools and services available, how do you decide which one is the right fit for your organization?
To simplify the process, we’ve compiled a directory of carbon accounting solutions tailored to different industries and business sizes. To help you find the right fit, we’ve broken down carbon accounting solutions into five main categories that map to different organizational needs, industries, and expertise.
- Carbon Management Software Platforms
- What They Offer: Enterprise solutions for tracking, analyzing, and reporting emissions data.
- Best For: Enterprises with complex supply chains or significant reporting obligations who need the most sophisticated end-to-end solutions plus audit-grade accounting.
- Implementation Difficulty: High
- Estimated Price: $$$$
- Examples: Persefoni, Salesforce Net Zero Cloud, Watershed
- Consulting Services
- What They Offer: Expertise in strategy design, customized solutions, regulatory guidance, and white-glove implementation.
- Best For: Businesses that need tailored guidance, are new to carbon accounting, and want significant help implementing.
- Implementation Difficulty: Complexity will depend on industry, scope of accounting service, and provider.
- Estimated Price: $$-$$$
- Examples: This category can range from traditional accounting and consulting firms (PwC, KPMG, BCG) to specialized sustainability consultants (Verdical Group) and small, local consultants. This is a wide-ranging category and you should consider a consultancy’s expertise in both sustainability and your industry
- Services Specializing in Mid-market Solutions
- What They Offer: Easy-to-use solutions for SMEs with simpler carbon footprints.
- Best For: SMEs that have relatively simple supply chains and straightforward emissions sources, such as tech companies and financial firms; smaller sustainability teams; companies with budget limitations.
- Implementation Difficulty: Medium
- Estimated Price: $-$$
- Examples: Greenplaces, Greenfeet, Pathzero
- Industry-Specific Tools
- What They Offer: Tools tailored to sector-specific challenges, such as agriculture, logistics, or manufacturing.
- Best For: Organizations in complex industries with unique emissions profiles.
- Implementation Difficulty: Medium-high. Complexity will depend on industry, scope of accounting service, and provider.
- Estimated Price: $-$$$$
- Examples: One Click LCA (construction), Sphera (chemicals and life sciences), Gravity (complex operations and supply chains)
- SME Solutions
- What They Offer: Affordable or free tools with basic functionality.
- Best For: Small and medium-sized enterprises (SMEs) just starting their carbon management journey.
- Implementation Difficulty: Low
- Estimated Price: $
- Examples: Aclymate, CoolClimate Calculator, SME Climate Hub tools
Things to Keep In Mind
Here’s what you should understand before you start looking for solutions:
- Assess Your Needs:
- Evaluate your business size, industry, and current carbon management capabilities.
- Determine the level of detail and compliance required for your emissions reporting.
- Research Available Solutions:
- Match your needs to the appropriate category of carbon accounting solutions.
- Consider features like automation, scalability, cost, implementation effort, and Scope 3 tracking capabilities.
- Engage Stakeholders:
- Involve cross-functional teams early to ensure buy-in and smooth implementation.
- Communicate the importance of accurate carbon accounting to your organization’s goals.
- Commit to Continuous Improvement:
- Regularly review and refine your carbon accounting processes.
- Stay informed about evolving regulations and technologies.
Key Pitfalls to Avoid
When selecting a carbon accounting solution, avoid these common pitfalls:
- Underestimating Time Needed for Data Accuracy: Incomplete or inaccurate data undermines emissions reporting and decision-making so it’s important to allocate enough time to gather and review required data.
- Overlooking Scope 3 Complexity: Supply chain emissions are often the largest and hardest to measure. Make sure to consider whether your supply chain is complex (think multi-national manufacturer) or relatively simple (think software company or law firm) and choose a tool that can handle the supply chain complexity of your business.
- Lacking Scalability: Selecting a solution that cannot grow with your business leads to inefficiencies and future costs.
- Losing the forest for the trees: Estimating emissions is messy. Focusing on detailed calculations could consume valuable time with minimal impact on the result.
- Failing to Secure Internal Buy-In: Successful carbon accounting requires company-wide collaboration. Failing to engage stakeholders may hinder implementation.
Find Your Fit
Explore our database of carbon accounting solutions, where you can filter on criteria like target market or industry or company size. This database is updated regularly as new companies emerge and existing solutions evolve. You can access the database here.
To make it even easier to deliver climate impact for SME organizations across a variety of industries and use cases, CNaught has partnered with a select group of carbon accounting solutions that we believe drive real value. Greenplaces, Greenfeet, Pathzero, and Aclymate all uniquely enable companies of various sizes to measure and reduce your organization's climate impact.
Note: We do not receive a referral fee for introductions to any of these partners.
Take the Next Step
Once you’ve calculated your emissions, we can help you mitigate unavoidable emissions with our portfolios of high-integrity carbon credits. Wherever you are on your sustainability journey, carbon credits can support your strategy. They’re an effective tool for immediate climate action while you decarbonize your operations and supply chain.
Connect with our team here to explore how our portfolio of high-integrity carbon credits can support your climate goals and complement your overall strategy.
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Access our full database of carbon accounting solutions here.
If you are a carbon accounting solution and wish to provide updated information or be added to our list, email us at info@cnaught.com.
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