Carbon accounting solutions are becoming increasingly important for companies to understand, manage and reduce their CO2 impact on the environment. By extracting data across the organisation and its supply chain, carbon management platforms enable companies to track and report their carbon emissions as they face increasing pressure from customers, investors, and governments to document their commitment to reducing their impact on the planet.
In this blog post, we’ll explore the business case for carbon accounting and the benefits it can bring to companies.
Using tech to save time
Making sense of carbon accounting information can be a massive undertaking, especially if the data is calculated manually in spreadsheets. Choosing a carbon accounting solution that incorporates features such as AI and machine learning can vastly improve the time and resources spent on crunching numbers. The saying “work smart, not hard” certainly applies to this field of work – with tech-driven solutions able to do a lot of the heavy lifting, in turn saving time and money that can be used in a more value-adding ways, for instance by spending time on reducing emissions rather than calculating them. Nonetheless, a report from BCG x BCG GAMMA showed that 86% of companies still record and report their emissions manually using spreadsheets. This means that shifting to tech-based carbon accounting provider can be a remarkable time saver and much better way of utilising valuable resources. At EIVEE, we blend technology and human expertise to ensure the highest quality of data accuracy. Our tech/software engine does the heavy calculations, while our team of in-house experts continuously track and validate the data, ensuring market-leading precision and data integrity.
Cost savings through energy efficiency
One of the primary value-adds of carbon accounting is the ability to identify cost savings through energy efficiency and other domains. By measuring and managing the carbon footprint, companies can identify hotspot areas where they can reduce energy consumption, such as upgrading equipment or implementing energy-efficient processes. This can lead to significant cost savings for companies, as energy is often one of their largest expenses. For example, a company may discover that a significant portion of its emissions are coming from its transportation fleet. By switching to more fuel-efficient vehicles, the company can reduce its emissions and fuel costs at the same time. Additionally, implementing energy-efficient technologies and processes can also help companies to save on electricity, heating, and cooling costs, which can further add to the cost savings.
New revenue streams
Another benefit of carbon accounting is the ability to identify new revenue streams. A notable example of this is by introducing low-carbon products and services, for instance a retailer introducing a “greenbasket” or low-emissions products. This can lead to new opportunities for growth and revenue for companies. A company may realise that a significant portion of its emissions are coming from its products, and by developing more eco-friendly products, the company can differentiate itself from competitors and appeal to environmentally conscious consumers. This can lead to increased sales and revenue for the company.
Meeting expectations of customers, investors, and governments
Carbon accounting can also help companies better meet the expectations of customers, investors, and regulators. Many customers are becoming more concerned about the environmental impact of the products they buy and use, and hence are looking for companies that are taking steps to reduce their carbon footprint proactively and transparently. Similarly, banks and investors are becoming more interested in the environmental performance of companies and are increasingly demanding information about emissions in financial reports. We already see thatbanks are offering better interest rates to companies that have their carbon footprint documented and under control. In addition, governments around the world are introducing regulations to limit greenhouse gas emissions, for instance the Corporate Sustainability Reporting Directive (CSRD) in the EU, and companies that measure and manage their emissions will be better prepared to comply with these regulations – thus avoiding fines and regulative scrutiny.
Setting science-based targets
Carbon accounting also allows companies to set and track progress towards science-based targets – for instance to join the Science Based Targets Initiative (SBTi). These targets are in line with the Paris Agreement's goal of limiting global warming to well below 2 degrees Celsius. Setting science-based targets can help companies to align their emissions reduction efforts with the latest climate science and ensure that they are making a meaningful contribution to the global effort of combatting climate change. At EIVEE, we’ve built our platform in accordance with the GHG protocol, and we use leading environmental databases such as EXIOBASE to calculate the carbon emissions. Our methodology, platform and expertise has helped companies apply for initiatives such as the SBTi.
Finally, carbon accounting can help companies maintain a positive reputation and build a sustainable brand. By implementing carbon accounting and taking action to reduce their emissions, companies can demonstrate their commitment to sustainability and protect their reputation above and beyond the SDGs. Carbon accounting is a powerful tool that companies can use to demonstrate their commitment to sustainability, reduce their environmental impact, and maintain a positive reputation.
In conclusion, carbon accounting is a valuable tool for companies to understand and reduce their impact on the environment. It can also make good business sense by identifying cost savings, revenue streams, and helping companies to meet the expectations of customers, investors, and governments. With the right solution provider, carbon accounting also allows companies to set and track progress towards science-based targets in alignment with the ParisAgreement. Companies that implement carbon accounting and take action to reduce their emissions can not only help to protect the environment but also secure their reputation and future growth.