Carbon accounting: the 101 guide

How to calculate your company’s carbon footprint

6 min readJan 25, 2023

What is carbon accounting and how to calculate your company’s emissions?

Carbon accounting refers to the method used to calculate, analyze, measure and report the carbon dioxide emissions of a business. Carbon accounting serves as a measurable way to hold companies or individuals accountable in their efforts to reduce their carbon footprint and to achieve net-zero carbon emissions.

At senken, we help to remove unavoidable emissions from the atmosphere by using carbon removals and avoidance credits. In order to manage these emissions and achieve goals such as carbon neutrality or net zero, the first step is to know the contribution of emissions. Thus, in this way, an emission reduction strategy can be carried out based on the points of greatest contribution. You may have heard of this referred to as measure, reduce, remove.

This article covers all the essential information you need to know about carbon accounting.

Scope 1, 2 and 3 emissions

To understand and manage a company’s carbon footprint, scope 1, 2, and 3 emissions are used in corporate sustainability reporting to describe the sources of greenhouse gas (GHG) emissions.

Scope 1 emissions are direct emissions from sources that are owned or controlled by an organization, such as fuel burned in boilers, vehicles and refrigerant releases.
Scope 2 emissions are indirect emissions from the generation of purchased electricity consumed by an organization. For example, a software company buying electricity from the grid to power their office.
Scope 3 emissions are all other indirect emissions that occur in the value chain of an organization, but are not included in scope 2. These can include emissions from employee commuting, business travel, and the production of purchased goods and services.

Scopes 1 and 2 are often easily calculated and can be mitigated by transitioning to electric vehicles or switching to renewable energies. These scopes can offer a straightforward way to begin your carbon accounting journey.

Calculating scope 3 emissions is often perceived as a bigger challenge, collecting the emissions of your suppliers and their suppliers can be a cumbersome exercise. Mitigating these emissions requires collaboration with other stakeholders, which in turn can help in reducing our collective emissions. Getting an insight of your entire value chain may seem challenging, but has a huge impact; scope 3 often makes up of over 70 percent of a companies’ total emissions in most sectors. Companies that succeed in doing so can calculate the footprint of their products, which is considered the holy grail in carbon accounting.

To calculate your company’s carbon footprint, these further steps can be followed:

Collect data: Gather data on energy consumption, transportation, waste generation, and other relevant activities.
Assign responsibility: Determine the responsibility for emissions that occur in the supply chain.
Analyze and report: Analyze your emissions data, identify areas for improvement, and create a report that summarizes your findings and emissions reduction goals.
Set reduction goals: Based on your analysis, set achievable, specific, and time-bound goals for reducing emissions.
Monitor and improve: Continuously monitor and track your emissions and progress towards your reduction goals, and make improvements as needed.

When going for calculating your emissions, you need to start by deciding if you want to do the work in-house, or rely on an external partner.

Using existing frameworks in-house

Calculating emissions requires a lot of time, work and specialist knowledge but it is possible to carry out in-house. If your company or organization has a team with the expertise needed, there are tools available for supporting you in calculating your emissions.

The GHG Protocol offers a free cross-sector Excel-based calculation tool with detailed instructions for use.

GHG Corporate Standard (Scope 1 & 2) https://ghgprotocol.org/corporate-standard
Value chain GHG Standard (Scope 3) https://ghgprotocol.org/standards/scope-3-standard
Technical guidelines for Scope 3 https://ghgprotocol.org/scope-3-technical-calculation-guidance
GHG Protocol excel Tool https://ghgprotocol.org/calculation-tools

Hiring a consultant agency

The upcoming CSRD climate reporting policy obligates nearly 50,000 EU companies to disclose their impact on the environment to help consumers and investors make sustainable choices by 2024. And more and more companies need to report on carbon emissions, to support with that there is a large number of consultants who are specialised in calculating emissions for companies.

Climate consultants tend to prefer an activity-based approach as detailed above. This creates more accurate calculations, and most consultants don’t just offer a calculation, but also give strategic consulting on how you can work to reduce your emissions. This comes at a cost, but if you need the high fidelity, it might be worth it. Companies to reach out to are EY, PwC, KPMG, Deloitte, Quantis, Bain, Mckinsey & company & Kolibri

An overview of the carbon accounting platforms

Annual subscription to a SaaS carbon accounting platform

In the past few years there has been a flurry of activity in the field of carbon accounting, with new companies creating software tools emerging in almost every country with a solid technology scene.

These platforms offer data analysis, allowing them to calculate emissions more quickly and at lower cost. Many of them can also be linked directly into the services your company uses, such as your electricity counter, fuel consumption, flight booking system and more.

👇 List of carbon footprint calculation platforms and their differences:

Carbon accounting platforms

An overview of the carbon accounting companies.

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Conclusion

In conclusion, carbon accounting is an essential tool for companies looking to reduce their carbon footprint and achieve their emissions goals. By tracking emissions, companies can identify areas for improvement and take action to reduce, avoid and remove emissions. For hard to abate emissions, carbon credits offer a solution to balance out emissions and reach net-zero.

On the senken marketplace, we are committed to providing the widest range of climate assets to our users, to help you purchase verified, high-quality carbon credits that are aligned with your company values.

Stay tuned on the Senken platform as we are looking to develop an API that will make it easier for users of different carbon accounting platforms to access our range of climate assets. the API will enable seamless integration, so you can easily track and manage your contributions and receive carbon credit certificates to demonstrate your commitment to sustainability. We are looking forward to invite you to join us on this journey towards a greener future.

About senken

Senken is an easy-to-use platform to access the largest selection of climate assets for transparent climate actions and finance. With senken, we want to make it easier for companies and investors to support regenerative climate projects by buying verified carbon credits. senken provides additional security and transparency at the data level to ensure the quality and integrity of each project.

Confidently purchase trade and retire carbon credits to reach your companies’ net-zero ambitions.