Carbon accounting has become a matter of increased value to your business as the Earth’s temperature rises by 0.06 degrees centigrade every decade due to the emission of greenhouse gases, which have kept growing since 1850.
Therefore, it has become essential for businesses to be more sustainable because businesses will survive only if the planet and its people survive.
Global warming is the gradual increase in the Earth’s temperature due to the enhancement of the concentration of greenhouse gases in the atmosphere. Because of this enhancement, the atmosphere traps relatively more rays from the Sun, increasing the Earth’s temperature.
Simply because your planet is warming up…Wherever you undertake your business, destruction anywhere will impact everyone, everywhere. Since we live in a global village, increasing global temperature affects the whole supply chain and causes losses in millions and trillions of dollars. Moreover, it causes floods, droughts, wildfires, and heat waves and increases the frequency of intense weather events. So, to make your business sustainable, you have to show concern.
Businesses are responsible for most greenhouse emissions. Therefore, it has become increasingly important for every business to monitor the quantity of carbon and the products it releases into the atmosphere. To illustrate, carbon accounting calculates the overall emissions through a complex set of formulae and derivations, heading towards inculcating more efficient solutions.
With more and more laws and legal frameworks being enacted at International and national levels, the state governments are encouraging businesses that are more sensitive to carbon emissions than those with a carbon footprint.
Many states in Canada, including Alberta, have imposed a flat carbon tax on floor fuel prices, increasing them by around 15%. Nevertheless, the money thus collected will be reimbursed to small businesses and households.
Logically, consumers who believe in ethical consumerism are likelier to buy from those businesses or associate with those organizations that care about their responsibilities towards the planet.
Naturally, modern businesses believe that they can improve their reputation by ensuring they portray their best image to the public by showing environmental sensitivity.
In this regard, carbon accounting is the first step towards eventual reduction of your carbon footprint.
Increasingly many aspects of today’s economy are becoming climate-centered, making Carbon accounting even more relevant.
Nations worldwide have been trying to find ways at all levels of business transactions to ensure that they minimize their cost of existence for the environment.
The first such bilateral contract aimed at reducing Greenhouse gas emissions was created between two private actors, an electricity producer and a forest owner, in 1989, (Accounting for Carbon, Bellassen and Laguet, 2009)
A few countries introduced carbon taxes in the early 2000s. They implemented a Cap-and-Trade System, which created a supply and demand for Greenhouse gas emission reductions in businesses.
Emissions Trading Schemes emerging later, put an explicit carbon tax on 7% of world emissions (World Bank)
Then, the big companies have made it a part of their reputation to have reporting of carbon footprint as part of carbon disclosure projects.
Unfortunately, many national governments are reluctant to impose carbon emission caps, due to its possible political costs. However, realistically, there is one thing that they agree on and start to benefit from collectively: the MRP, which stands for monitoring, reporting, and verification.
The following formula is used to calculate it:
Activity data * Emission factor= Greenhouse gas emissions
Carbon accounting can be based on focusing on one level of the phases through which the fossil fuels pass and ultimately burn:
Theoretically, Carbon accounting is simple math which uses the following formula:
Y= CO2 emission from that activity.
You can also consider hiring an accountancy firm for long-term carbon accounting purposes and advisory.
Global warming is one of the most pressing realities of modern times, threatening the survival of all biological life on the planet. Businesses and industrial units have the most tremendous responsibility; hence, they have much to gain by restraining their carbon emissions. In this regard, carbon accounting is the first step forward.
