Carbon Accounting Tech Evolves as ESG Demands Increase

Carbon accounting isn’t a new concept. For more than two decades, the Greenhouse Gas Protocol has guided companies toward net zero. Yet the path to progress has been choked with obstacles. For many organizations, carbon accounting methods have remained somewhat vague and confusing, while inconsistent regulation has spawned laissez-faire behavior and actions.

That’s changing. A growing array of carbon accounting standards and methodologies are emerging. Moreover, technology -- including tools such as blockchain and Ambient IoT -- are making it easier to track carbon, including pesky Scope 3 emissions. As organizations attempt to trim their carbon footprint and avoid accusations of greenwashing, the need to adopt a sound accounting framework is vital.

“We’re seeing a massive shift in thinking -- along with increased adoption of carbon accounting tools and methods,” observes Kristina Wyatt, a senior vice president for Global Regulatory Climate Disclosure at Persefoni, a sustainability consulting and software services firm. “There’s an acknowledgment that it’s now important and necessary to report greenhouse gas emissions accurately.”

For businesses, this shift toward accuracy and transparency can prove daunting. “The accounting part is really hard,” says Tim Mohin, a partner and director at Boston Consulting Group (BCG), which also offers carbon accounting software. “People have focused mostly on disclosure but getting a handle on greenhouse gas emissions is critical for success -- and for avoiding accusations of greenwashing.”

By the Numbers

In many respects, carbon accounting is a fairly straightforward task. Once an enterprise determines the cost of fuel or electricity and applies them to the entire process of assembling, transporting, selling, and disposing of an object -- anything from a box of breakfast cereal to a smartphone -- it’s possible to determine how much carbon is produced.

For years, the World Business Council for Sustainable Development and the World Resources Institute have offered standardized ways to measure and report greenhouse gas (GHG) activity. In addition, Science-based targets guide organizations toward verifiable and accurate carbon accounting methods. “Excellent tools and methods exist for building an accounting framework,” Wyatt says.

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