What is carbon accounting?
A greenhouse gas (GHG) inventory is a dated list of emissions sources and calculated emissions for a stated boundary. The boundary says which companies, sites, and activities are included. The base year is an earlier period used for comparison. The three emissions scopes separate direct sources, purchased energy, and other value-chain emissions. The GHG Protocol Corporate Standard sets the method for making and documenting these choices.
Why does carbon accounting matter to you?
A customer may ask which companies and operations you included, what changed in the boundary or method, which calculation standard you used, your separate Scope 1, Scope 2, and Scope 3 totals, and which data a third party verified or assured. CDP asks for this evidence in its 2026 questionnaire. EcoVadis checks carbon metrics under Reporting, Energy Consumption & GHGs and rates reliability using the evidence, accounting practice, and plausibility of the data (official update 32.9). For entities in scope of Australian climate reporting, AASB S2 paragraph 29 requires Scope 1, Scope 2, and Scope 3 emissions and details of the method, approach, inputs, and factors.
How does carbon accounting work?
First, list the entities and sites. Under the GHG Protocol, the equity-share approach includes emissions in proportion to your ownership share. A control approach includes 100% of emissions from operations you control; state whether you use financial control or operational control. Apply that choice consistently, then set the reporting period and a base year with reliable records. Map each source to a scope. Activity data is a measured business quantity such as kilowatt-hours, litres, kilometres, or kilograms of refrigerant. An emission factor converts one unit of that activity into emissions. Use the basic formula: activity data x emission factor = emissions. The factor must match the activity unit, geography, and period. Add the calculated lines into separate Scope 1, Scope 2, and Scope 3 totals.
Data quality is the strength of the inputs and controls behind each line. Record whether data is measured or estimated, check that all sites and months are covered, compare unusual changes with prior years, and flag every proxy, which is a substitute used when exact data is missing. Keep bills, meter exports, service reports, factor files, assumptions, calculation versions, and reviewer sign-off together.
What mistakes should you avoid?
- Reporting a total without a written boundary, so nobody can tell which entities, sites, or sources were included.
- Changing factors or calculation methods without testing whether the effect requires the base year and prior figures to be restated.
- Keeping only the final spreadsheet, with no bills, source files, factor versions, assumptions, or review record behind it.
What will an assurance provider or customer check?
An assurance provider will trace samples to source records, recalculate inventory lines, inspect factor choices and conversions, test whether the boundary and scopes were applied consistently, and review exclusions and year-on-year changes. A customer may run a lighter version of the same checks. Both need an evidence trail that leads from each reported total back to the original record.
When should you recalculate the base year?
Follow a written recalculation policy. Under the GHG Protocol, a significant acquisition, disposal, outsourcing change, method or factor improvement, or discovered error can require the base year to be recalculated. Normal growth or decline does not. Apply the same threshold to increases and decreases so the trend remains comparable.