Carbon Accounting 101

Carbon accounting refers to the method used to calculate how much carbon dioxide emissions a business is responsible for or its carbon footprint. Carbon accounting allows a company to accurately measure the amount of carbon credits that should be purchased in order to offset their previous carbon emissions. This is done so that a company or organization can accurately decide a fair amount of carbon credits to exchange between other businesses, individuals, or third parties.

The main goal of carbon accounting is to assign a set value to the carbon dioxide and greenhouse gas emissions produced so that they can be accurately, numerically depicted as a financial value in the carbon market.

Scope 1,2 &3

In terms of reporting, greenhouse gas emissions fall into three “scopes.” Scope 1 is emissions that result from the organization’s operations (such as manufacturing), while scope 2 covers indirect emissions created by consumption of purchased electricity, steam, heating, or cooling. Scope 3 includes all indirect emissions, spanning everything from employee commutes to logistics.