What is Carbon Accounting?

Carbon Accounting explained without the jargon

Ever wondered how much carbon your business is pumping into the atmosphere? That’s where carbon accounting comes in.

It’s a bit like keeping track of your finances, but instead of dollars and cents, you’re measuring the greenhouse gases (GHGs) your business emits. These emissions are often measured in carbon dioxide equivalents (CO2e), which makes it easier to understand the overall impact on the environment.

You can check out our Carbon Accounting FAQs and Carbon Accounting Glossary for an overview of key terms and answers to common questions.

Why does Carbon Accounting matter?

You may be asking yourself, ‘Why should a small or medium-sized enterprise (SME) owner care about carbon accounting?’

Great question.

Well, it’s not just about being environmentally conscious, though that’s a big part of it.

Carbon accounting can benefit your business in multiple ways:

1. Cost Savings
   Identifying areas where you can reduce energy consumption or waste can save you money. Imagine if your business could cut its electricity bill by simply switching to energy-efficient appliances.
   
   
2. Corporate Clients
   Large companies, such as Woolworths, Qantas and BHP Group, will be government mandated to provide carbon reporting as of January 2025. The majority of these brands’ emissions are Scope 3 emissions, which come from their suppliers including SMEs. These corporates have already started to demand carbon reporting from their suppliers, and this will increase rapidly in 2025 and beyond.
   
   
3. Regulatory Compliance
   The Australian Government is increasingly focusing on reducing national emissions. Understanding your carbon footprint can help you stay ahead of any future regulations that might require businesses to report their emissions.
   
   
4. Customer Appeal
   More Aussies are choosing to support businesses that care about the environment. Showing how your business is taking steps to reduce its carbon footprint can attract environmentally conscious customers.
   
   

Check out our blog Carbon Accounting 101: A Beginner’s Guide for Australian SMEs
to learn more about the barriers and benefits of carbon accounting. Or head over to our web page Why Carbon Accounting?

How does Carbon Accounting work?

As an Australian SME supplying a large or corporate client, you’ll be asked to provide carbon reporting so they can meet their government requirements of detailing Scope 3 emissions. Think of carbon accounting as creating a carbon budget for your business. Just like tracking expenses, you identify where your emissions are coming from. This used to be an expensive task, delivered by a climate active accredited consultant. 

For most SMEs, the cost of this approach is too high to justify. But more recently a number of tech solutions have been developed, which extract the spend data from your accounting app then convert this via emissions factors to tonnes of CO2.

There is a bit more to it, but these apps place carbon reporting well within the reach of smaller businesses. We’re here to help you find the right carbon software to do the hard work for you. 

Want to get started with carbon reporting or accounting? Here’s our 3-step process:

1. Get in touch
   Contact us for an initial, obligation-free, conversation to explain what carbon information or data you’ve been asked to provide, and why. It’s important to discuss the details as this will impact the choice of carbon accounting software.
   
   
2. Receive recommendations
   Based on your information, the industry you operate you in, and any other important details, we’ll recommend one or a couple of carbon calculators to get you started. We specialise in Ecommerce & Retail, Import & Distribution, Manufacturing, Not-for-profits, Professional Services and Software Developers. We’ve tried and tested many carbon apps, and will only recommend what we’ve used ourselves.
   
   
3. Make a decision
   Once you have our recommendations, you can make an informed decision. We’ll guide you every step of the way to make sure you’ll use fit-for-purpose carbon accounting software.
   
   

We can help you choose the right carbon accounting software for your business. Check out our Carbon Accounting Software page or contact us for more info.

Real-World Examples for Aussie SMEs

Let’s break this down with some relatable examples:

1. Manufacturing Company
   A manufacturer with multiple production lines generates emissions from machinery, transportation of raw materials and energy-intensive processes. By optimising machinery efficiency and using renewable energy sources, the company can significantly reduce its carbon footprint.
   
   We specialise in providing carbon reporting for manufacturing companies. Head over to this page for more info.
   
   
2. Hotel Chain
   A medium-sized hotel chain with several locations uses a lot of energy for heating, cooling and lighting. Implementing energy-saving practices, such as using smart thermostats and LED lighting, and installing solar panels, can lower emissions and energy costs.
   
   
3. Retail Distribution
   A retail distribution business operating a fleet of delivery trucks produces emissions from fuel consumption. Transitioning to electric vehicles and optimising delivery routes can decrease their overall carbon footprint.
   
   We work with ecommerce and retail clients, taking care of their bookkeeping and payroll as well as their carbon accounting. Check out this web page for more info.
   
   
4. Tech Company
   A tech firm with large office spaces and data centres consumes significant electricity for powering computers, servers and climate control systems. Investing in energy-efficient IT infrastructure and server virtualisation can help reduce their carbon emissions.
   
   Whether you’re a SaaS company or an engineering firm, we can provide expert advice. Head over to this page for more info.
   
   
5. Food Processing Plant
   A medium-sized food processing plant produces emissions from its production line, refrigeration units and waste disposal. By improving waste management practices, like composting organic waste and installing energy-efficient refrigeration systems, the plant can cut down on its emissions.
   
   We already work with several clients to help calculate their carbon footprint and report their greenhouse gas emissions. Contact us if you’d like to have a chat about carbon accounting.
   

Why should you start Carbon Accounting NOW?

The urgency for Australian SMEs to adopt carbon accounting practices cannot be overstated.

Here’s why:

1. Stay ahead of large client requests
   Large clients and corporates will be demanding carbon reporting from their suppliers to meet government regulations.
   
   
2. Stay ahead of regulations
   Australia is moving towards stricter environmental regulations. By starting carbon accounting now, you’re preparing your business for the future.
   
   
3. Gain competitive business advantage
   If you choose to be an early adopter of carbon accounting, large clients and corporates are more likely to keep you or onboard you as a supplier.
   
   
4. Stay ahead of large client requests
   Large clients and corporates will be demanding carbon reporting from their suppliers to meet government regulations.
   
   
5. Improve operational efficiency
   Often, the steps you take to reduce emissions also improve efficiency. Reducing waste and optimising energy use can lower your operating costs.
   

Want to know more?

We’re more than happy to have a chat about your business and what’s involved with getting started with carbon accounting. Give us a ring on (02) 8188 9019 or complete our enquiry form.

Wondering what sets us apart from other carbon accounting providers? Head on over to Why Choose Us for 10 compelling reasons to partner with us.

Check out our Carbon Accounting FAQs or head over to our Carbon Accounting Software page to get an idea of the reporting apps we work with.

We’re on the forefront of carbon accounting, helping clients find the right carbon reporting solution to stay ahead of the pack.