As companies begin the carbon accounting process, they often encounter similar challenges, regardless of their industry. Common pitfalls include fragmented and inconsistent data, unclear goals, resource limitations, and difficulty aligning with relevant regulations and standards. By taking a few key steps early on, teams can streamline their carbon accounting and more effectively manage the risks and opportunities arising from climate change.
Carbon accounting has become an essential tool for responding to the financial risks and opportunities arising from climate change. Organizations today need reliable emissions data — not just to meet stakeholder expectations and regulatory requirements, but to make informed decisions that will help protect and build business value in an uncertain market.?
Gathering this information isn’t easy. It requires teams to handle highly complex data, collaborate across functions, and navigate an alphabet soup of climate regulations and standards — often while working with limited resources.?
In this article, we discuss common pitfalls you may encounter as you begin the carbon accounting process — and the steps you can take to overcome them.?
Overcoming Key Pitfalls in Carbon Accounting
In working with more than 6,000 companies across different industries and regions, our experts have identified a set of hurdles that frequently slow down the carbon accounting process. Here are four common pitfalls — and lessons learned to help you avoid them:
1. Pitfall: Data Fragmentation and Inconsistency
Data collection is the most difficult and time-consuming part of carbon accounting. One of the factors we see slowing teams down the most is a lack of centralized access to key data sources. Emissions and energy information is typically scattered across different departments and tracking systems, and the quality of data and calculation methodologies can vary widely. The larger and more matrixed an organization is, the more acute the problem becomes. It can be especially difficult to engage supply chain partners and acquire consistent, granular scope 3 data, which is often needed to meet regulatory and stakeholder demands.
Lesson: Establish a Centralized System for Managing Data
Given the complexity of carbon data — and the level of scrutiny it receives — an automated, central collection system is crucial. Using spreadsheets and manual tracking can lead to miscalculations and errors, potentially exposing a company to reputational and legal risk.?
Carbon accounting software is the best way to create a single source of data truth within your organization, ensure consistency, and prepare for auditing and disclosure. It can also support communication with stakeholders and partners. For example, organizations can share the free 麻豆原创 Pro platform with their suppliers to facilitate data exchange and streamline scope 3 calculations. You can also tap into to help with data collection and management.?
It’s important to find a carbon accounting platform that allows transparency and full control over your data. If you can track changes to data and understand which methodologies were used and how calculations were made, you’re more likely to feel confident in your disclosures and decision-making.?
2. Pitfall: Unclear Purpose
If you aren’t clear from the outset about why you’re collecting emissions data, you can end up wasting considerable time and resources. Different business goals demand different types of data. It’s worth spending the time early on to map out your objectives: Are they limited to regulatory compliance, or are you actively working to decarbonize? What expectations do stakeholders have for transparency and action? Answering these questions will set you up for success.?
Lesson: Understand Your Business Goals From the Start
The carbon accounting process should start with a solid understanding of your climate-related business goals. This will allow you to get clear on which data to collect and the level of detail needed. For example, if you’re hoping to achieve ambitious decarbonization targets, you’ll want much more granular data than if your priority is to meet baseline reporting requirements. A clear picture of your goals will also help you communicate with stakeholders and cultivate internal buy-in, which is an essential part of the carbon accounting process.?
3. Pitfall: Resource Limitations?
The teams in charge of sustainability are often quite lean, and the work is difficult. It can be challenging to persuade leaders to designate resources for carbon accounting and climate initiatives — especially if the business case is not clear.?
As mentioned above, data collection can quickly drain resources. We often see sustainability teams spend a large chunk of their time hunting for data, which prevents them from focusing on long-term strategies that will enable the business to respond to climate risks and opportunities. One key problem is that key information often lives with other departments in the organization, who may not have an incentive to spend time managing carbon data.?
Lesson: Cultivate Buy-In and Articulate Business Value
Building buy-in early on will save time in the long run. One of the best ways to streamline carbon accounting is to focus on strengthening relationships and engagement throughout your organization. It will be easier to persuade colleagues to spend time gathering emissions data for you if they understand how that data will be used to protect and build business value. This information will also help you make the case for allocating (or protecting) resources for your climate program.?
4. Pitfall: Failure to Understand Regulations and Standards
Today, companies have to navigate a confusing maze of ever-evolving disclosure demands, from voluntary frameworks like CDP and EcoVadis to mandatory regulations like California’s SB 253 and Europe’s CSRD to standards like the GHG Protocol, SBTi, TCFD, and ISSB. Each of these frameworks requires data presented in a slightly different manner. This slows teams down — it’s not uncommon for staff to spend seven to eight months preparing for different disclosures. That’s time that could be used to develop and implement a climate program that protects business value.?
Lesson: Know the Landscape and Leverage Technology
The disclosure landscape is evolving rapidly, and it’s important to stay on top of the latest updates to different policies. Before you begin calculating emissions, make sure you understand which frameworks are relevant for your organization.?
A carbon accounting platform that incorporates the necessary regulations and standards into calculations (along with the latest updates) will save you time and help ensure alignment and compliance. For example, 麻豆原创 Sustainability Reporting enables teams to generate their own GHG metrics reports for different frameworks, including CDP, CSRD, SECR, and ISSB — setting the stage for efficient, confident reporting.?
Carbon Accounting to Build Business Value
The physical and transition risks from climate change are only growing. Having clear visibility into your emissions will allow you to make informed decisions, decarbonize efficiently, and communicate with investors, customers, and other stakeholders. Carbon accounting software can greatly streamline the process and create confidence in your data — ultimately helping protect and build business value in a turbulent environment.?
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