Unaccounted Carbon: A risk to business  

by | Nov 1, 2022 | News

Being unaware of your exposure to carbon emissions is putting your business at risk. Since Carbon pricing is here to stay many countries have started implementing pricing regulations around carbon emissions and companies across the globe have made a wide assortment of climate pledges. Carbon pricing isn’t just about healing the climate, it’s now a part of what makes a company profitable, so failing to manage your risk exposure to the rising price of carbon is simply poor business management.   

Many companies have issued Carbon footprint reports, which are a great first step in helping them understand and communicate their environmental impact. Carbon footprint reports are often criticized for their lack of transparency, data, and accuracy. The main reason is a lack of information on GHG emissions originating in their supply chain, known as Scope 3 emissions.  For years Scope 3 has been left out of carbon footprint reports even though they can make up 80% of a company’s overall carbon footprint. The main excuse being that they’re too difficult to calculate and record. Many reports only estimate these Scope 3 emissions leaving a company at risk for claims of greenwashing and misspent investments. Shareholders are demanding better accounting of carbon information, the price of carbon is rising and estimating your carbon footprint is leading to even more unidentified risk exposure. So how can we control this risk?  

Climate accounting. Climate accounting is a tool that that can help expose your carbon data and better understand it’s financial risk to your company. By tracking and recording Scope 3, climate accounting provides carbon emissions data in the same vein as financial documents, so there is no more guessing, just full control over your carbon debt throughout your operations and supply chain.  

As we mentioned earlier, many countries have implemented a carbon tax and a rule for mandatory climate disclosures.  If your company is waiting for mandatory climate rules to be passed by governments or other authorities, this will cost you more money in the future. The price of environmental consultants and services as well as the price of carbon will go up once these laws and regulations are passed. Being a leader in the carbon markets will give you an advantage in price, branding, and employee retention.  

Taking actions to account for your carbon using the tools that climate accounting provides is the only way to control your companies environmental impact is for the utmost good of the company. To get started download SCOP3 software at www.climateaccounting.com or contact us at info@standardcarbon.ai