Carbon accounting software: what to consider

Carbon accounting software helps organizations quantify and manage their carbon emissions across various aspects of their operations. From energy consumption and transportation to supply chain activities through to waste management, these software solutions offer comprehensive data management capabilities to track and reduce emissions. 

Carbon accounting platforms are increasingly becoming a must for organizations of all sizes. Here, Minimum explores the different considerations when searching for the best carbon accounting software for your business. 

What to look out for when choosing the best carbon accounting software

When looking for the right carbon accounting software for your organization, there are several factors that may need to be taken into consideration. For example, different businesses will have varying levels of regulation that they are subject to. Others may be inclined towards reporting their carbon emissions purely due the financial benefits of doing so. Some considerations for finding the best carbon accounting software for your organization can include: 

• Centralized data management
• Emissions calculation coverage
• Adaptability and update ease
• Auditability
• Data sharing
• Reporting and compliance
• Detailed breakdowns
• Rebaselining capability
• Data quality and uncertainty assessment

Centralized Data Management

A good carbon accounting software utilizes centralized data management to effectively track, analyze, and report greenhouse gas (GHG) emissions data across various operational facets. It should also integrate with different data sources within an organization, such as:

• Energy consumption records
• Transportation data
• Waste management data

To be able to properly streamline your carbon accounting, carbon accounting platforms such as Minimum’s should enable you to submit data from multiple sources - for example from APIs, excel downloads or pdfs - but manage and store them easily in one place.

Emissions Calculation Coverage

Carbon accounting software provides coverage for various types of emissions across an organization's operations. The specific emissions coverage may vary depending on the software and its functionalities, but generally, carbon accounting software can track and manage the following emissions:

Scope 1

Carbon accounting software captures direct emissions originating from sources owned or controlled by the organization. This includes emissions from combustion of fossil fuels in stationary sources and mobile sources.

Find out more about scope 1 emissions

Scope 2

Software solutions often include the ability to account for indirect emissions associated with purchased electricity, heat, or steam. These emissions result from the generation of energy by external suppliers.

Find out more about scope 2 emissions

Scope 3

Carbon accounting software can also extend its coverage to Scope 3 emissions, which encompass a wide range of indirect emissions that occur throughout an organization's value chain. Scope 3 emissions may include those associated with purchased goods and services, business travel, employee commuting, waste management, transportation and distribution, and upstream and downstream activities.

It’s important to note that Scopes 1 & 2 tend to be well covered by many softwares but it’s important to look for good Scope 3 coverage - not all carbon accounting software covers this, and if your business is particularly concerned with these emissions then care should be taken not to miss them out of your carbon accounting. 

Find out more about scope 3 emissions

Adaptability and Update Ease

It’s important to find a carbon accounting software that is designed to accommodate the changing needs and growth of businesses. As organizations expand or modify their operations, the software you’re using should scale alongside you, handling increased data volume and additional emission sources. This scalability enables businesses to:

• Adapt to new emission reporting requirements
• Incorporate new sources of emissions
• Extend coverage to different operational aspects without significant disruptions or reconfiguration

It’s also key to ensure that the software is easy to use. Carbon accounting can be a complex process, so having a platform with increased usability functions will help to make the job a little easier for those responsible for making updates. As an example, carbon accounting software that includes real-time monitoring capabilities, allowing businesses to track emissions continuously.

Auditability

Carbon accounting software plays a crucial role in enhancing auditability, making the process of auditing emissions data more efficient and transparent. As part of the accounting process, having your footprint reviewed by an independent third party helps to ensure accuracy in your reporting. Here's how a good carbon accounting software helps with auditability:

• Data integrity and traceability - Carbon accounting software tracks the origin, changes, and accuracy of emissions data, creating an audit trail that can be easily accessed and reviewed.
• Data validation and quality controls - Carbon accounting software employs robust validation mechanisms and data quality controls to ensure the reliability of emissions data. 
• Standardization and Compliance - Carbon accounting software typically adheres to established reporting standards and methodologies, such as the Greenhouse Gas Protocol or ISO 14064. 

Data Sharing

Finding a reliable carbon accounting platform enables businesses to easily share information across organizational boundaries. For example, with scope 3 emissions a significant proportion of this data has to be provided by third parties as they refer to indirect emissions (those not immediately under the jurisdiction of the reporting entity). As such, being able to source the information from these third parties to be able to create an accurate view of an organization’s carbon footprint is paramount to ensuring accurate reporting.

Reporting and Compliance

Increasingly, organizations are under pressure to comply with regulations set at international and localized levels. Depending on the region of the reporting entity, organizations may be required to report to one of the following;

• Carbon Disclosure Project (CDP)
• Streamlined Energy and Carbon Reporting (SECR)
• Corporate Sustainability Reporting Directive (CSRD)
• Task Force for Climate-related Financial Disclosures (TCFD)
• Global Reporting Initiative (GRI)
• Sustainability Accounting Standards Board (SASB)

By utilizing carbon accounting software, businesses can efficiently track, manage, and report their carbon emissions in accordance with regulatory requirements. The software's adherence to standardized reporting frameworks, automated data collection and validation, real-time monitoring, regulatory updates, reporting capabilities, auditability, and regulatory reporting support all contribute to ensuring compliance with relevant regulations.

Detailed breakdowns

Carbon accounting software incorporates emissions factors and conversion factors that enable the calculation and conversion of emissions data into equivalent greenhouse gas units. These factors take into account the different global warming potentials (GWPs) of greenhouse gasses, such as:

• Carbon Dioxide (CO2)
• Methane (CH4)
• Nitrous Oxide (N2O)
• Hydrofluorocarbons (HFCs)
• Perfluorocarbons (PFCs)
• Sulfur Hexafluoride (SF6)

Depending on the requirements of your business and sector,  the ability to report biogenic carbon emissions separately from fossil carbon emissions can be vital in pinpointing the approach that the business needs to take to have a meaningful impact in terms of carbon reduction strategies. If this is the case for your business, ensuring that your choice of carbon accounting platform includes this capability is very important. 

Rebaselining Capability

Over time, organizations may experience changes in their operations, industry standards, or regulatory requirements. Rebasing allows organizations to update their emissions baseline to reflect these changes accurately. It provides a more current and relevant starting point for measuring progress and evaluating the effectiveness of emission reduction efforts - and is a key consideration when looking for a carbon accounting software for your organization.

Rebasing- also  encourages organizations to pursue continuous improvement in their emission reduction efforts. By resetting the baseline, organizations can set more ambitious targets and measure progress against the new reference point. It provides an opportunity to reevaluate sustainability goals, adjust strategies, and implement more effective measures to achieve greater emissions reductions.

Data Quality and Uncertainty Assessment

Carbon accounting software includes robust data validation mechanisms that help identify and flag data anomalies, errors, or inconsistencies. The software applies predefined rules and checks to verify the accuracy, completeness, and integrity of the emissions data. 

It also maintains an audit trail that documents the origin, changes, and accuracy of the emissions data. This audit trail enables users within the organization to effectively trace and verify the data sources, adjustments, and calculations made throughout the emissions accounting process which in turn helps to reduce errors or inaccurate reporting. 

In terms of uncertainty assessment, the carbon accounting software should be able to highlight anything in the emissions data that may suggest issues with the different sources or the calculation methods. This helps organizations understand the potential range of emissions values and improves the accuracy of emissions reporting by considering uncertainties in the data.

How the Minimum carbon accounting platform can help

Minimum can help organizations to understand their existing carbon output, and create plans to mitigate climate related risks in the future.  Our Emissions Data Platform seamlessly collects and processes emissions data from every corner of your organization and supply chain - no matter the format. Making it the ideal platform for emissions audits and all-round business intelligence. 

Learn more about how Minimum's Emission Data Platform can help to power you all the way to Net Zero today.