As the world moves toward decarbonization targets, companies and investors are starting to recognize the financial and business value of effective carbon accounting. But for many companies, turning this ambition into action remains a challenge: A BCG report found that only 11% of surveyed companies have achieved emissions reductions in line with their goals.
Despite the high stakes, technical emissions language and complex calculations are holding many companies back from impactful reductions planning. But the right support, strategy, and solutions can help streamline the carbon accounting process.
What Is Carbon Accounting?
Carbon accounting is the systematic process of measuring, tracking, and reporting how much greenhouse gas (GHG) and carbon dioxide emissions are produced, directly and indirectly, by an organization’s activities, operations, and supply chains.
By quantifying these emissions and building a comprehensive carbon inventory, organizations can better understand their carbon footprint and identify actionable ways to reduce their emissions and overall environmental impact. The most common approach to calculating emissions is by classifying them into three scopes, as defined by the GHG Protocol:
- Scope 1 emissions: Direct emissions from sources that are owned or controlled by an organization. Any use of fossil fuels or non-renewable energy sources falls under this category, such as vehicle use and industrialization activities.
- Scope 2 emissions: Indirect emissions that are produced from the consumption of purchased electricity, steam, heat, and cooling.
- Scope 3 emissions: All other indirect emissions (not included in Scope 2) that occur in a company’s supply chain, including both upstream and downstream activities.
Why Does Carbon Accounting Matter?
While carbon accounting supports the big-picture goal of transitioning to a net-zero global economy by 2050, for most companies, investing in decarbonization helps build long-term resilience.
Having accurate, granular carbon data not only helps with developing meaningful emission reduction initiatives, but also supports:
- Regulatory compliance: Many global regulations and sustainability frameworks , such as the EU’s CSRD and UK’s SECR, require carbon disclosures. Establishing robust carbon accounting practices and being prepared before reporting cycles begin can streamline the process and help companies stay compliant.
- Competitive positioning: Transparent carbon reporting and a commitment to decarbonization can be a competitive differentiator for businesses, as consumers are more willing to spend a premium on sustainable products or businesses.
- Operational efficiency: By identifying high-emitting processes, organizations are able to pinpoint inefficiencies throughout their operations. Impactful changes, such as switching to renewables or more sustainable suppliers, can lead to significant cost savings and increased efficiency.
- Risk management: Accurate carbon data helps organizations identify and assess climate-related risks. This enables them to implement proactive measures to reduce emissions, costs, and minimize potential supply chain disruptions.
What Tools Do You Need to Start Carbon Accounting?
Accurate carbon accounting can be an expensive, manual undertaking. But leveraging the expertise of a dedicated sustainability partner like Novata can help simplify and streamline the process. Here’s how we make it easy for companies and investors to accurately measure their carbon footprint:
Basic Estimator
For those that have never built a carbon inventory, setting a high-level baseline estimate is a good place to start. Novata’s Basic Estimator, powered by Change Climate, provides a user-friendly, three-step approach to generate estimates derived from industry and region-specific spend averages. Reporting companies simply enter operating expenses, industry, and geographic business information to receive cradle-to-customer estimates for Scope 1, 2, and 3 emissions.
Carbon Navigator
The Novata Carbon Navigator is an affordable, end-to-end digital carbon footprint calculator that enables companies to rapidly calculate, measure, and report on Scope 1, 2, and 3 emissions within the Novata sustainability platform. It requires only two types of data—energy consumption data and company expenditure—to accurately calculate an organization’s carbon footprint.
Built with an open architecture and constantly innovating to meet evolving carbon reporting and user needs, the Carbon Navigator is also able to:
- Track and report energy consumption, spend, travel, waste, and commuting data, backed with an investor-grade audit trail
- Use APIs and AI tools to import and categorize data easily and in bulk
- Help inform and set targets for climate performance management
Advisory Expertise
Led by in-house carbon experts, Novata’s advisory team works directly with organizations to evaluate their current GHG data and reporting capabilities and provide personalized strategies to help them confidently navigate the complexities of carbon accounting.
The team helps organizations act on their carbon goals, with a focus on achieving measurable impact, including providing:
- A clear roadmap to meet carbon reporting obligations and develop strategies for risk management
- Data-driven guidance to set science-based targets
- Simplified financed emissions calculation and analysis, aligned with PCAF standards and carbon-related regulations
Simplify Your Carbon Accounting with Novata
Access to accurate carbon data is the first step to meaningful climate action. Having the right platform and guidance can take the guesswork out of complex carbon accounting requirements, and help companies make a difference in reducing their carbon footprint.
From building your first carbon inventory to preparing for regulatory compliance, Novata has a suite of carbon solutions and services to help simplify the entire process.
For a limited time, experience the Novata Carbon Navigator in action with a 5-day free trial. Start your free trial today and experience how it makes emission calculations a stress-free and seamless process.
