What is carbon accounting: everything you need to know

1. Carbon accounting definition

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Carbon accounting refers to the set of methods used to identify, quantify, and classify all greenhouse gas (GHG) emissions (with CO2 being the main component) generated by a human activity within a defined scope (company, administration, organization, community, territory, individual, etc.).

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It is called "carbon accounting" because the measurement units of this accounting are CO2 equivalents (carbon dioxide) or the tonne of carbon. Carbon accounting is an emerging field that has been progressively developed in recent years to meet the need to better measure our greenhouse gas emissions in the face of climate change.

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Carbon accounting encompasses various tools that vary depending on the scope for which greenhouse gas (GHG) emissions are to be measured: the Corporate Carbon Footprint, the national inventory of emissions, and the carbon footprint of a territory are a few examples.

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Ideally, relevant carbon accounting should be based on verifiable and universally recognized data collection and calculation methods, just like those of financial accounting. To this end, international standards and various methodological tools have been developed and regularly improved, allowing all stakeholders to speak the same language.

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To be complete, carbon accounting must generally integrate the GHG emissions generated upstream and downstream of the activity concerned, directly or indirectly related to this activity.

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2. Carbon accounting: why and for what

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2.1 What major issues does carbon accounting address?

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To combat the ongoing climate change, it is essential to be able to measure our greenhouse gas emissions, i.e., to take the most accurate possible inventory of the quantities of GHGs emitted and to classify these emissions by categories and sources. Only this comprehensive knowledge can enable the development of the necessary measures and programs to reduce these emissions and thus meet the local, regional, and global reduction targets set by national and international authorities. Carbon accounting therefore allows each concerned entity to take stock (constantly renewed) of the problem, in order to be able to take the best measures to try to solve it.

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Good carbon accounting also helps to legitimize and credibilize the actions implemented by organizations to reduce their emissions: to know if a GHG reduction action is effective, it must indeed be measurable! This is particularly the case within the framework of legal obligations such as the Regulatory GHG Inventory imposed in France since 2010 by the Grenelle II law.

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2.2 Carbon accounting as an instrument of a CSR and sustainable development strategy

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Within the framework of companies' CSR approaches (and in particular their climate strategies), carbon accounting is now indispensable. It indeed makes it possible, based on the data collected and analyzed, to precisely identify the possible areas for progress, in order to guide the actions via a series of objectives that vary according to the cases but are based on a well-identified common core:

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• Draw up a precise assessment of the organization's energy and environmental impact (GHG) situation.

• Define a quantified and dated program for reducing emissions.

• Adapt the organization's operations to current and future regulations.

• Implement energy transition actions to minimize the use of fossil fuels, and consider appropriate carbon contribution / compensation measures for the rest.

• Mobilize all stakeholders and communicate about the actions undertaken and completed.
  
  

3. Principles and tools of carbon accounting

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There are several carbon accounting methodologies, defined at the international or national level. Their common point is to be based on a set of simple principles: coherence, accuracy, completeness, relevance, transparency, verification, low-carbon strategy, long-term vision, anticipation, and pragmatism. But in detail, the precise methods can vary. Three carbon accounting frameworks are particularly widespread: the GHG Protocol, the Carbon Footprint, and the methods derived from ISO 14064 and 14069 standards.

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3.1 The GHG Protocol for carbon accounting

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An international standard for harmonizing carbon footprints, this method (the most requested worldwide) is broken down into three scopes of consideration of direct and/or indirect GHG emissions, according to their sources and categories, integrating the upstream and downstream of the activity itself. The GHG Protocol does not limit itself to defining modalities for accounting for emissions, it also details a methodology for communicating the results.

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3.2 The Carbon Footprint

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Developed by the ADEME and managed by the Bas Carbone Association, the method integrates the three scopes of the GHG Protocol. A process for accounting for all greenhouse gases considered by the IPCC, the Carbon Footprint is part of an active approach to sustainable development and codifies the modalities of an action plan aimed at reducing the emissions accounted for (inventory of measures to be taken, implementation, evaluation, correction). Adapted to all types of organizations, from territories to companies, it is an essential tool for preparing GES inventories in France under the Grenelle II law.

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3.3 ISO 14064 and 14069 standards

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The international standard ISO 14064 (supplemented by ISO 14069) was designed to integrate GES accounting modalities into all ISO standards related to the environment and energy. While it adopts the principles of the GHG Protocol in terms of differentiating indirect and direct emissions, it replaces the three scopes with six distinct categories, depending on the sources of emissions. It also highlights specific requirements in terms of report writing and verification of the figures mentioned.

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4. Carbon accounting: some additional resources

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To deepen the reflection on the ins and outs of carbon accounting, here is a selection of useful links:

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• The Bilan Carbone methodological guide - an exhaustive PDF on the objectives, principles and implementation of the methodology, developed by the Association Bilan Carbone.

• An overview and practical sheets - detailed review of international standards and carbon and GES accounting methodologies.

• What are the limits of carbon accounting? - an analytical and critical reflection.

• The construction of carbon accounting: history, use and perspectives - an analysis documented by two specialists in the field: Morgane Le Breton and Franck Aggeri.

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