CO2 or bust: tools of the accounting trade

Carbon accounting has become an essential step for any business attempting to reduce its overall carbon footprint. But navigating through pending legislation, registries and offsets can be daunting. Most companies have yet to dedicate full-time staff that can sift through it all and come up with a plan for action.

Understanding some basic concepts can help businesses determine why carbon mitigation is becoming an increasingly important business strategy, and the necessary steps to creating a carbon reduction plan. A necessary starting place, carbon accounting, measures the climate change impact of a business’s operations. 

Often referred to as a carbon footprint, the process entails gathering data on activities such as building energy use and transportation to calculate the total greenhouse gases (GHG) produced over the course of one year. In the process, all GHG are converted into one base metric: carbon dioxide equivalent.

Once a business has determined its carbon footprint, it can identify elements of its daily operations that significantly contribute to climate change. The results of such an analysis provide a business with a plan of action to reduce its footprint.

A business may choose to determine a carbon footprint for many reasons, and their motivations should shape the kinds of tools used to calculate the footprint. These tools will vary in the time and resources required, the accuracy of results and, ultimately, the amount of real feedback they provide based on company-specific information. 

Almost all carbon accounting systems rely on the work of the World Resources Institute, which together with the World Business Council for Sustainable Development created the internationally accepted Greenhouse Gas Protocol.

The Protocol provides a standard way of calculating footprints, including standard emission factors and calculation templates for a variety of business sectors. (Emission factors convert units such as therms of natural gas into carbon dioxide equivalents.) 

These data and templates are publicly available, and using them represents one method of conducting a GHG inventory, or carbon footprint. One primary advantage of such tools is they allow the user to clearly communicate the methodology it used, because the calculations and inputs are readily available to it. Transparency around how a carbon footprint is calculated provides businesses confidence to share the information with employees, customers and other key stakeholders. Authenticity will become an increasingly important issue as more mainstream companies make GHG reduction claims.

Carbon footprint data is the backbone of voluntary carbon registries, and one of the newest venues for businesses to publicly disclose their commitment to GHG reductions. Voluntary reporting systems, such as The Climate Registry, a newly minted nationwide registry, allow organizations to voluntarily report their emissions, set baseline measurements and track progress in reducing emissions. 

The Climate Registry and its predecessor, the California Climate Action Registry, rely on the Greenhouse Gas Protocol framework mentioned previously, and provide careful instructions for calculating and reporting business footprints. In addition, third-party verification is required to ensure that each business included in the registry reported numbers that are accurate and defensible, and a standard methodology was used. 

Regional partnerships, such as the Seattle Climate Partnership, offer similar tools. The Seattle Climate Partnership includes local businesses that voluntarily commit to measure their footprints, work to reduce their footprints and share their results and experiences with other members. The Seattle Climate Partnership provides a carbon footprint calculator on its Web site that is based on regionally specific emissions factors, particularly for electricity and public transportation systems.

Templates from the Greenhouse Gas Protocol and registries provide business with an accurate and transparent account of their carbon footprint, but completing them can demand a significant time investment. For some businesses, a quicker estimate with slightly less accuracy makes more sense. A vast number of online calculators have sprung up in the past few years for businesses wanting to get quick ballpark idea of their footprint.

Most calculators are provided by organizations selling carbon offsets. Carbon offsets are a way for a business to fund climate change mitigation projects around the world such as building a wind energy farm, planting trees or capturing methane from landfills. 

Most carbon calculators available on such Web sites are very user friendly, are typically based on the Greenhouse Gas Protocol and tend to use averages and estimations for many inputs, requiring less specific inputs from the user. A general rule of thumb when using such calculators is the less information required, the more likely averages are being used, and therefore, the less accurate the results for specific users. The more data inputs, the higher likelihood of accuracy. For instance, the Northwest-based Bonneville Environmental Foundation prompts users to input a ZIP code to pull regional numbers.

Some online calculators allow businesses to not only determine their footprint over the course of a year, but estimate emissions for one event or trip. It is this feature that enables a business to calculate estimated emissions for travel to and from an event, and then purchase the equivalent number of offsets to participate in a “carbon neutral event.” Portland-based The Climate Trust, which also sells offsets, is one such provider of calculations for a number of business and individual activities.

Lastly, some carbon accounting tools are specifically designed to calculate the emissions of individual activities. For example, The Build Carbon Neutral calculator designed by Seattle- based architecture firm Mithun offers a footprint calculator for the built environment. Another example, the Brooklyn Brothers “Global Cooling Project,” developed with U.K. consultant ERM, offers tools to measure the carbon footprint of commercial productions.  And some companies, such as Amtrak and DoubleTree Portland, offer specific tools to measure the carbon impact of services such as a train trip or a stay at a hotel.

No matter which carbon accounting tools a business chooses, the goal should be to use the footprint results to inform strategies aimed at reducing the footprint.  By doing so, businesses will be better prepared to meet America’s growing interest in a changing climate.

Dominique A. Gómez works primarily on climate change solutions for Seattle-based sustainability consulting firm Cascadia Consulting. She can be reached at dominique@cascadiaconsulting.com.