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How carbon emissions accounting helps in achieving net zero targets

September 07 , 2023

Source: Business Standard

The process of calculating the amount of greenhouse gas emitted directly by operations or indirectly by supply chain and subsidiaries is known as carbon accounting

Corporations and nations are setting targets to achieve zero greenhouse gas (GHG) emissions produced by any operation, production, supply chain or subsidiary.

Two paths to net zero

A target can be reached by two means. An organisation can either buy carbon credit in a trading market where companies taking carbon-positive initiatives, like planting trees or investing in technologies, can sell their positive points to a company with a negative carbon rating.

The other way to reach the net zero target is to lower the carbon rating points internally. This can be done with the help of several initiatives, like optimising manufacturing processes and using renewable technology. This is a better and more efficient way to reach the net zero target, as a company won't be buying credits but actually working to reduce its carbon footprint.

Carbon accounting

The process of calculating the amount of greenhouse gas emitted directly by operations or indirectly by supply chain and subsidiaries is known as carbon accounting. How companies or nations calculate generation will be crucial in reducing or offsetting carbon

It collects metrics like fuel and energy usage every year in three categories. Scope 1 refers to direct emissions by sources owned and controlled directly by the organisation. Scope 2 is about indirect emissions generated by the producer of raw material or energy the company uses. Emissions emitted by third party suppliers or contractors come under Scope 3.