Introduction to carbon accounting

Carbon accounting has become increasingly important in recent years as companies seek to reduce their carbon footprint and comply with upcoming legislation. In this essay, we will explore what carbon accounting is, the upcoming legislation related to it, who the main players in Europe are, and when companies should start exploring different options for tooling.

What is Carbon Accounting?

Carbon accounting is the process of measuring, reporting, and managing an organization's greenhouse gas emissions (GHGs). It involves calculating emissions from sources such as electricity consumption, transportation, and production processes. By measuring their GHG emissions, companies can identify areas where they can reduce their carbon footprint and implement strategies to mitigate the impact of their operations on the environment.

Upcoming Legislation

In the United States, the Biden administration has set a goal of reaching net-zero emissions by 2050, and to achieve this, the government is expected to introduce new legislation to reduce GHG emissions. The administration has also indicated that it plans to implement a carbon pricing mechanism, which would place a price on carbon emissions, incentivizing companies to reduce their carbon footprint.

In Europe, the European Union has set a goal of reducing GHG emissions by 55% by 2030, compared to 1990 levels. The EU has also implemented the European Green Deal, which includes a number of initiatives to support the transition to a low-carbon economy, such as the Carbon Border Adjustment Mechanism, which will impose a carbon tax on imports of goods from countries with less ambitious climate policies.

Leading the way

In Europe, there are a number of companies and organizations that are leading the way in carbon accounting. One of the main players is CDP, formerly known as the Carbon Disclosure Project, which works with companies and cities to measure and disclose their environmental impact. CDP's data is used by investors, companies, and policymakers to assess environmental risk and opportunities.

Another major player in Europe is the Science-Based Targets initiative (SBTi), which provides a framework for companies to set emissions reduction targets that are aligned with the latest climate science. Over 1,000 companies have already set science-based targets through the initiative.

When to Start Exploring the Different Options for your Organization

Companies should start exploring different options for tooling as soon as possible, especially as legislation related to carbon emissions becomes more stringent. Carbon accounting can seem like a complex process, and companies will need to select the right tools and systems to accurately measure their emissions.

A smart and easy solution for companies is to use carbon accounting software such as Climax, which can automate the process of collecting and analyzing data. This can help companies to identify areas where they can reduce their carbon footprint and track progress over time.

Conclusion

Carbon accounting has become increasingly important as companies seek to reduce their carbon footprint and comply with upcoming legislation. In Europe, there are a number of organizations that are leading the way in carbon accounting, such as CDP and the SBTi. Companies should start exploring different options for tooling as soon as possible, including carbon accounting software to accurately measure their emissions and identify areas where they can reduce their carbon footprint.