Carbon Accounting for Your Business
What is it & why you should do it
No matter what business you own, there is one constant that needs to be considered and tracked: profits. Anyone with a basic understanding of math can open and run a business. They need to know how to add and subtract, and if the number they end a month with is higher than where they started, they made a profit and are succeeding. Accounting and finance are the cornerstones of any business because without money there are no workers, and there is no product.
We keep track of money because we have to, but all businesses have something else in common. Something that goes uncounted and summarily ignored. As long as there is life on the planet there will be waste. And as long as humans continue to operate our industries there will be waste the planet cannot deal with. Everyone pollutes, at least a little. The same way that everyone spends or makes money. But no one is counting their pollution.
Carbon Accounting is quantifying the Greenhouse Gas emissions generated by an organization in a common unit of measurement. This gives businesses a statistic they can quote to show how much of a carbon footprint they are generating. Providing a baseline for establishing more carbon-neutral and eco-friendly sustainable objectives that the business can implement. It’s a litmus test for how ecological a company is and can set helpful benchmarks within different industries.
How Is It Counted?
Several primary organizations provide their metrics and methods for measuring carbon emissions. Mostly, it’s agreed that the World Resources Institute and the World Business Council for Sustainable Development are the benchmarks you need to follow. National organizations such as the US Environmental Protection Agency set limits and guidelines that companies and corporations have to meet to apply for benefits or avoid penalties.
Enterprise Carbon Accounting uses multiple criteria that gauge the carbon footprint of a business based on various statistical values. The actual accounting part is done as a collection of multiple outputs from different projects and operations within the line of a business.
This includes emissions of gases directly as a result of a business’ functions. And includes things such as agriculture, industrial processes and consumer manufacturing waste. These are measured on the standards set by the Greenhouse Gas Protocol.
Why Do It?
Before 2010, carbon accounting was an at-will procedure, used by power companies or expected polluters to keep track of the damage that was being caused by their activities. There were still regulations that had to be followed, but legislative efforts for incorporating Greenhouse Gas Protocols weren’t firmly in place. Then the Deepwater Horizon oil spill happened, and the massive sunken costs and cleanup required pressured the US to institute mandatory carbon reporting for the top emitters in the country.
It is rapidly becoming an unavoidable concern to know how much pollution every business generates or contributes to. A restaurant isn’t causing deforestation of the farms they buy meat from, but that is happening. Meeting the mandated regulations allows businesses to stay active. And not incur the fines associated with failure. It’s a stopgap to ensure no one is ignorantly spreading pollution and getting away with it.
As environmental concerns take the forefront of policies and business-related regulations increase in severity, it will become more important to receive regular updates on how efficient and sustainable your business is. It’s like driving on a highway with a broken odometer. You may know how fast you’re going, but you won’t know you’re wrong until you get pulled over. Regular checks can also help set a path for future improvements to the business. The safe range of being away from fines is a good range to fall into, but there are benefits to being even lower.
It’s a marketable trait to have a business that is carbon neutral, or even carbon negative. Contributing to green and clean energy solutions counts as an offset to a business’ regular carbon emissions. A business that requires some carbon emissions for manufacturing or processing can still count as green if they engage in conservation efforts. Or work to apply green conditions to the rest of their business.
Is It Reliable?
There is some contention whether carbon emissions reports are fairly measured. Measuring the actual physical presence of carbon monoxide and other harmful greenhouse gases isn’t what’s difficult. It’s measuring the overall impact through estimates, statistics and model distribution. Because scientists and carbon accountants can’t measure every second of a company’s emission, they must make educated estimates based on data they can gather over time.
Certain scientific communities have rejected the validity of major carbon reporting because of a massive range of environmental factors which can alter the intended results. This hasn’t stopped the regulations that require the reporting to be done. But has brought attention to the necessity for more trusted, scientifically-backed methods for measuring it.
Getting a carbon accountant for a business that is expected to generate pollution is a great idea because the provided data can understand the day-to-day operations and make plans to improve them. Then, subsequent reports will show a slow and steady improvement toward carbon neutrality or even a net positive for sustainability.
Who Should Do It?
Any major business will have to. Power companies, fuel manufacturers, anyone who works in the industrial sector; any building with a chimney and a smoke cloud overhead will need the reports done, eventually.
Small businesses may be interested to know what steps they can take in their supply chain to improve their standing. And can use that to their advantage as promotional material.
Anyone who cares about the environment should care about how they are impacting it with their day-to-day operations. The idea it gives and the conversation it can start are worth it to start making improvements towards a balanced, sustainable business that will last into the future.
Thank you for reading. I decided to combine the nature of “sharing is caring” with the importance of this subject affecting us all into creating a 5-day free email course titled “How to Build Your Sustainable Brand”.
The course is currently in beta and will cover 5 different lessons that will help you better understand, grow, and attract clients to your sustainable brand.
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