Are we getting carbon accounting all wrong?

Rethinking carbon accounting: A call for action-oriented approaches

by Emilien Hoet, Managing Director at ClimatePartner UK

I’ve become increasingly frustrated at our collective approach to measuring carbon footprints as I see the industry (both in-house professionals and external service providers) sometimes forgetting why we do what we do.

Reporting as a checkbox exercise, striving for accuracy for accuracy’s sake, fear of making any decisions without complete, perfect information…

Don’t get me wrong: we need to make sure we calculate carbon emissions accurately to ensure we are incentivizing the right kind of action and avoiding greenwashing.

However, surely the real purpose of carbon accounting is to inform climate action?

Unlocking Climate Action

If so, then I have news for most: we already know most of the (partial) solutions and where innovation is needed.

As a carbon accountant, just a few questions about your business will already allow me to tell you where your hotspots are and what you can do about it. And with a pretty high degree of certainty.

For example, if you are a food manufacturer, any consultant (or software platform) worth their salt should be able to tell you that:

1. 80% of your emissions are likely to be in your Scope 3/category 1, in other words with your raw material and ingredient suppliers.

2. Effective supplier engagement will be your biggest lever for impact. Interventions focused on swapping to low-carbon fertilizers or feed alternatives, as well as implementing regenerative agricultural practices is the way to go.

3. If you source any commodities with high deforestation risks, a major part of this footprint will be land use change-related emissions. Improving traceability, supporting certifications, specific supply chain interventions and investing in innovative alternatives will make the most difference.

This is a simple/generic example, but the point is this can easily become more specific depending on a few key questions about your business.

Data vs. Action: Finding the Right Balance in Carbon Accounting

As much as quality data collection is important, let’s not use this as an excuse to delay action, as otherwise it’ll be years before we feel we have sufficiently robust data to make decisions.

We should be asking ourselves two key questions:

1. “Will getting more accurate data here help inform decision-making?”

2. “How right does the data need to be to take action?”

Innovative Reduction Strategies

A good example is with logistics. Often the logistics team is already very well incentivised to improve efficiency (to save cost). Calculating very precisely how many miles your trucks drove will yield very marginal insights.

We already know the solutions:

1. Reduce & avoid where you can (some eco-driving training can help too!)

2. Hydrotreated Vegetable Oil (HVO) / Kinetic Energy Recovery System (KERS) where feasible (and only HVOs with inputs that don’t compete as a source of food)

3. Transition to electric where it makes sense

With limited data, you can already inform the right decisions and even strategy. We need to spend more time and money on action, not just on data collection & calculation.

Carbon Accounting with ClimatePartner: A Strategy for Impact

Businesses that are sophisticated about their carbon accounting will know that they will need to be re-baselining every few years to have an accurate picture of how much they have reduced emissions. This is to ensure that reductions aren’t simply happening because of better-quality data collection.

Using a similar logic, we could simply get on with reductions on day 1 of a carbon accounting project and then back-cast emissions to showcase the size of the reductions. Re-baselining, post-fact.

At ClimatePartner, we are tackling this problem by:

1. We make it standard to have specific reductions recommended as soon as we have the very first carbon report

2. We give advice to clients on reductions in the sales process already and throughout a project to ensure the accounting package/approach meets their decarbonisation objectives where possible

3. We remind ourselves to challenge clients whenever we feel that we are getting into a rabbit hole of “accuracy for accuracy’s sake”

4. We refuse work that is obviously unimpactful and only used to make overblown claims

Of course, there are many instances where we don’t get it right and it’s only by constantly reminding ourselves of the “why” that we can strive for excellence. My hope is that our industry reminds itself that informing and incentivising climate action is our ultimate objective, and that we achieve greater collective impact as a result.