Carbon Reporting 101: What Your Business Needs to Know

1. What is carbon reporting and why is it important?

Carbon reporting is the process of measuring, disclosing, and managing an organization's greenhouse gas (GHG) emissions, also known as carbon footprinting. Companies use carbon reporting to demonstrate commitment to reducing emissions and contribution to climate action. Many countries are implementing changing regulations that require companies to report their carbon emissions. Carbon reports act as a verifiable source to illustrate progress in reducing emissions over time, build credibility with stakeholders, and reinforce commitment to long-term sustainability goals. Stakeholders are increasingly demanding transparency regarding a company’s carbon footprint and sustainability practices as they use this data to assess commitment. Companies that actively monitor and reduce their carbon emissions are often seen as more responsible, which can positively affect their reputation and consumer loyalty. Tracking carbon emissions can also help companies identify inefficiencies in their operations, which can lead to cost savings.

2. How can I calculate my business’s carbon emissions?

The Greenhouse Gas (GHG) Protocol is a set of accounting standards that helps businesses track and report their greenhouse gas emissions. They classify three different categories of emissions involved in carbon accounting: Scope 1, Scope 2, and Scope 3.

• Scope 1: emissions directly produced from sources owned or controlled by the company
• Scope 2: emissions indirectly produced by the purchase of electricity, steam, heat, or cooling
• Scope 3:  indirect production of greenhouse gases throughout the company’s entire value chain, both upstream and downstream. This essentially encompasses anything not categorized as Scope 1 or 2. They are not produced by sources directly owned or controlled by the company, but a result of their operational activities. 

Learn more about scope emissions from our measuring carbon footprint blog post. 

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3. What are the carbon accounting standards?

To ensure comparability, credibility, and consistency in carbon reporting, organizations align their carbon reporting with globally recognized standards. Here are a few of the most used frameworks:

• Greenhouse Gas (GHG) Protocol: This is the most widely used international standard for measuring and managing emissions. It provides guidelines for accounting and reporting emissions across all three scopes.
• The Science Based Targets Initiative (SBTi): A global framework that helps companies and financial institutions set science-based emissions reduction targets aligned with the Paris Agreement's goals. This provides best practices for setting net-zero targets and defining corporate emissions reductions.
• Carbon Disclosure Project (CDP): Runs a global disclosure system for companies to manage their environmental impacts. CDP annually compiles information submitted during the annual reporting process and scores companies and cities based on their responses.
• The International Sustainability Standards Board (ISSB) has two standards that have been adopted globally as part of mandated sustainability disclosures. Both incorporate the recommendations that were developed by the Task Force on Climate-related Financial Disclosures.
  
  • IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) sets requirements for a company to disclose information about sustainability-related risks and opportunities.
  • IFRS S2 (Climate-related Disclosures) builds on IFRS S1, but sets supplementary requirements related to climate-related risks and opportunities. The standard requires an organization to disclose information about climate-related risks that could reasonably be expected to affect the company’s finances long-term.

4. Which carbon reporting platforms can my business use?

The process to report carbon emissions can be complex and resource-intensive. Fortunately, various digital platforms provide efficient solutions, simplifying carbon tracking, reporting, and reduction strategies. Here are our recommendations:

• Aclymate
• Greenly
• Green Places
• Carbon Smart
• Change Climate

For more details on platform comparability, check out our other blog post on platforms best for tracking emissions.

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5. What are good carbon reporting practices?

Good carbon reporting practices are essential for driving climate action, enabling businesses and governments to identify emissions sources, track progress towards reduction targets, and build trust with stakeholders. For this to be possible, your business needs to follow good practices:

• Adhere to Standard Frameworks: use globally renown standards that promote credibility and standardization.
• Set Clear Boundaries: Be transparent about what is included in the report and what is excluded.
• Use Reliable Data and Methodology: Report data from credible  sources, ensuring that the methodologies for measuring emissions are accurate. Ensure you’re consistent year after year to make reliable comparisons for stakeholders.

Highlight Carbon Reduction Strategies: Provide details on the steps taken to reduce carbon emissions, including investments in renewable energy, energy efficiency projects, and process improvements. Stakeholders want to know where you started and how you’re progressing. Otherwise, your actions will be viewed as greenwashing.