As the global economy undergoes a rapid transition towards net-zero emissions, manual carbon accounting is no longer a viable option for businesses who wish to remain competitive. In line with the hyper growing risks and opportunities surrounding sustainability in the business landscape, companies aiming to ensure accuracy and reliability when measuring and disclosing data relating to their sustainability performance will ultimately be required to utilise a digital carbon accounting solution.
Whilst businesses around the world are increasingly realising the urgency of collecting, measuring, tracking, and reporting on their emissions; many organisations are yet to realise the strategic potential of utilising an effective carbon accounting and decarbonisation platform. As such, this article provides a deep-dive into what carbon accounting software is, and the advantages of sourcing carbon accounting software over building internal solutions. As such, this article features a comprehensive guide to choosing the best carbon accounting software in 2023 to best suit your organisation’s sustainability needs.
What is carbon accounting?
Carbon accounting, or ‘greenhouse gas accounting’, refers to the systematic methodologies, measurement, and monitoring used to evaluate and quantify how much carbon dioxide equivalents (CO2e) an activity or entity emits. Carbon accounting measures emissions of all greenhouse gases (GHG) and includes CO2, methane, fluorinated gases, and nitrous oxide. Gases other than carbon are expressed in terms of carbon equivalents.
What is carbon accounting software?
The vital role of technology within carbon accounting is irrefutable. Carbon accounting software allows companies to streamline and automate their carbon accounting. As a result, companies can collate their carbon data in one unified platform, measure their carbon footprint, create scientific targets, and plan to reduce their emissions all in one place. Carbon accounting software also allows organisations to engage their internal stakeholders and external stakeholders, and report on their emissions. An effective carbon accounting software calculates carbon emissions in line with the GHG Protocol methodology, which are visually represented below. Meanwhile, comprehensive carbon accounting softwares - such as Plan A’s Sustainability Platform - utilise scope 1, 2 and 3 emissions calculators to streamline businesses’ carbon accounting and lay the groundwork for setting science-based targets (SBTs).
Carbon accounting softwares can also automate and streamline compliance with non-financial regulatory and reporting frameworks. Plan A’s Sustainability Platform facilitates the creation of customisable reports that allow for streamlined compliance with critical ESG reporting requirements, such as the CSRD, NFRD, CSDDD and SFRD.
Using sustainability software versus building internal sustainability solutions
A SAP Insights survey found that under one-third of mid-market executives are fully satisfied with the quality of data at their disposal to drive sustainable transformation. Meanwhile, the same survey reported that 86% of organisations still use spreadsheets to measure emissions data. It is clear that a large proportion of businesses are caught-up using endless spreadsheets to collect, track and analyse data surrounding their sustainability performance. Meanwhile, an increasing number of businesses are leveraging the power of carbon accounting software to maximise the accuracy and reliability of data, along with the overall efficiency of carbon accounting and sustainability oriented processes.
Given that becoming data-driven is a key requirement to driving a sustainable transition, prioritising reliable data collection, measurement and tracking is fundamental to adapt to the ever-changing needs of the business world. As such, it is highly recommended that organisations leverage data-driven software rather than building internal sustainability solutions. Internal solutions often are encumbered by multiple spreadsheets, data stored in a number of different departments, along with a lack of expertise on emission factors and emissions analysis. Consequently, businesses that use software rather than internal solutions will be able to efficiently bulk upload data from various departments and stakeholders, and measure their total corporate carbon footprint and value chain emissions. Companies that harness the power of carbon accounting software will ultimately be able to cut costs, become more resilient, and more transparent to their stakeholders. Simultaneously, organisations will be able to gain valuable insights across their wider supply chain to become more efficient and consistently meet their sustainability goals.
Companies that leverage the power of carbon accounting software will unlock a wide-range of opportunities, such as:
- Decreased time and costs relating to emissions calculations
- Decreased internal costs due to increased energy efficiency
- Decreased internal costs due to less waste
- Decreased internal costs due to greater supply chain efficiency
- Greater stakeholder trust
- Greater employee satisfaction, retention, and engagement
- Increase in brand value
- Enhanced competitiveness
- Reduced employee engagement due to lacking commitment to sustainability
- Decrease in sales due to damaged consumer perception
- Greater internal costs due to unnecessary waste
- Greater external costs due to carbon taxes
- Fines and administrative costs due to not complying with policies or regulations
- Increased risks and costs leading to decreased competitiveness
How to choose the best carbon accounting software for your company
There are 10 key steps that businesses must consider while browsing for the most effective carbon accounting solution for their business:
- Scopes 1, 2, 3 emissions calculation coverage: Given that greenhouse gas emissions (GHG) calculation is a key component of any organisation’s carbon accounting efforts, it is critical that a carbon accounting platform allows businesses to efficiently and accurately calculate their emissions across scopes 1,2 and 3. Meanwhile, given the vast majority of emissions are from scope 3, it is critical that carbon accounting software accurately tracks and calculates emissions across the full supply chain of a business. For instance, Plan A's suppliers module allows companies to track, report and reduce emissions beyond scopes 1 and 2 by providing a complete overview of scope 3 supplier emissions across a range of facilities and locations.
- Data-driven: Carbon accounting software should facilitate hassle-free data collection, input, and analysis in a centralised location. Data collection does not need to be tedious, and an effective carbon accounting software should allow organisations to consolidate their data in one secure platform to ensure they can gain immediate visibility on the company’s carbon footprint. Carbon accounting software that harnesses a data-driven approach ensures that users receive an accurate carbon footprint assessment, enabling them to identify emissions hotspots and gain a deep understanding of their scope 1,2 and 3 emissions.
- Decarbonisation first: Businesses that are looking to drive meaningful change to reap the long-term benefits of sustainability must make decarbonisation a key priority when purchasing carbon accounting software. Decarbonisation-oriented carbon accounting platforms will guide their clients to effectively reduce their emissions and sustainably transform business; rather than just offsetting or compensating which exposes businesses to the perils of greenwashing.
- Emissions forecasting: When choosing a carbon accounting software, organisations should look for software that empower users to not only visualise their past emissions, but also forecast future emissions to highlight opportunities for mitigation.
- ESG and sustainability reporting: When seeking out carbon accounting software, placing paramount importance to ESG and sustainability reporting is imperative. An effective carbon accounting software will align with the latest industry-leading guidelines and consistently update emissions factors, enabling businesses to seamlessly align with regulatory disclosures or evaluations by external parties. Carbon accounting platforms that place ESG and sustainability reporting as a key focal point means that companies tailor the reporting tool to their specific business needs to seamlessly report on their sustainability progress. In doing so, they will ensure they can adhere to international regulations and protocols, and easily export such reports to both internal and external stakeholders. This strategic software choice allows companies to harness the advantages of climate disclosure, safeguard and enhance their corporate reputation, proactively stay ahead of evolving regulations, and ultimately elevate their competitive edge.
- Ease of use: Regardless of how powerful a carbon accounting software is, It is critical that the software is user-friendly. An efficient, easy-to-use carbon accounting software that is free from extended training and set-up times means that users can easily understand how their business activities impact their carbon footprint, and how to reduce emissions, without wasting time. Furthermore, carbon accounting software that integrates educational features to upskill the teams who use it must be prioritised. For example, Plan A’s sustainability platform leads the way on education to ensure its users are up-to-date on key carbon accounting and sustainability concepts.
- Underpinned by science: To ensure accuracy and reliability, businesses should look for a carbon accounting platform that is underpinned by a certified methodology. In doing so, organisations will be able to make informed decisions with full confidence. Carbon accounting methodology that is backed by globally renowned certifications such as TÜV Rheinland ensures that clients have access to the most accurate data rooted in science. Meanwhile, carbon accounting softwares that are compliant with the GHG protocol ensure that businesses are able to accurately compare emissions across all scopes and facilities, obtain benchmarks for their industry, and identify emissions hotspots they can immediately take action against. Businesses that use scientifically-backed carbon accounting platforms will ensure they are able to comply with regulations, manage climate risk and reduce carbon costs.
- Tailored support: Whilst software is the basis of any effective sustainability strategy, businesses that choose a carbon accounting solution that offers tailored support based upon a range of factors influencing the company (e.g. industry, size, geographic location) will be able to reach their long-term targets and bolster their overall sustainability strategy. For instance, sourcing a carbon accounting platform that offers clients customised support with crucial activities such as complex data input and validating science-based targets should be made a top-priority for any business looking to ascertain a competitive advantage through sustainability.
- Relevant partnerships: Choosing a carbon accounting software provider that has a strong ecosystem of partnerships with reputable companies is a strong indicator of industry knowledge, expertise, and their ability to cater to current and future climate change and emissions requirements.
- Lead by example: When searching for a reliable carbon accounting software provider, it is critical that companies that must walk-the-talk via engaging in their own sustainability initiatives are prioritised. B-corp certified carbon accounting providers, such as Plan A, are those that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
The 5 best carbon accounting softwares of 2023
Looking for the best carbon accounting software to meet the specific sustainability needs of your business? We have ranked the 5 best options on the market in 2023:
1. Plan A
Plan A is the industry leading provider of corporate carbon accounting, decarbonisation, and ESG reporting software.
The green-tech pioneer hosts a data-driven SaaS platform that combines cutting-edge technologies and the latest scientific standards and methodologies (certified by TÜV Rheinland and GHG Protocol compliant). The end-to-end software solution automates CO2 emissions calculation, carbon reduction planning, as well as regulation and audit-proof ESG reporting, empowering businesses to manage their entire net-zero journey in one platform.
Businesses that choose to use Plan A’s platform only have to use one software for their entire decarbonisation journey. Subsequently, Plan A provides end-to-end carbon analysis that allows businesses to efficiently measure, and reduce scope 1, 2, and 3 emissions, decarbonise operations and value chains, comply with ESG regulations, and communicate performance to internal and external stakeholders. Additionally, Plan A boasts an in-house team of experts in sustainability, carbon accounting, decarbonisation, policy, and customer success, ensuring the sustainability journey of their clients is seamless.
Plan A’s prominent reputation in the world of sustainability software is reflected in their expansive customer base that includes leaders such as N26, BNP Paribas, Chloé , Flix, Sorare, BMW, Trivago, Deutsche Bank, Payhawk, and the European Union. Plan A is also a global exclusive partner to VISA. Founded in 2017, Plan A has already received several awards such as the Generali’s SME EnterPRIZE Award 2021 and the prestigious The Europas Award 2021.
2. IBM's Environmental Intelligence Suite
The IBM Environmental Intelligence Suite is a legacy software with a focus on data management. Functioning as an emissions management tool, it offers rudimentary climate risk analytics with the assistance of IBM's AI capabilities. A significant component of IBM's offering revolves around risk assessment and response strategies. Its attributes empower organisations to monitor disruptive climate patterns, aiming to integrate carbon accounting into operational processes. Businesses that are in search of carbon accounting software tailored for sizeable corporations and equipped for projecting future carbon emissions, the IBM Environmental Intelligence Suite may be a suitable choice; however, it may not provide the personalised experience that many organisations require.
3. Salesforce's Net Zero Cloud
Net Zero Cloud by Salesforce is a reflection of Marc Benioff's (Salesforce CEO) dedication to addressing climate change. This carbon accounting platform leverages Salesforce's prowess in automation, language support, and integration features. While such features equip it with valuable emissions reporting capabilities, the platform is ultimately constrained by its reliance on an existing data schema that wasn't inherently designed for accounting purposes. Meanwhile, assessments of its overall scalability have produced mixed results. However, the platform's dashboard functionality remains robust ,and Net Zero Cloud has established formidable partnerships including key players such as Accenture.
4. Microsoft Sustainability Cloud
The Microsoft Sustainability Cloud is an extension of Microsoft's commitment to sustainable initiatives. This offering is designed to allow companies to document, disclose, and curtail their environmental impact via Microsoft's Sustainability Manager. Microsoft envisions customers leveraging this platform to magnify progress and reshape their business strategies through robust environmental, social, and governance (ESG) capabilities. However, the carbon accounting solution may be best suited for mid-market and small-to-medium business (SMB) clients, yet definitive conclusions can not yet be made.
Operating under The Blackstone Group's umbrella, Sphera position themselves as a comprehensive ESG performance and risk management software. Sphera approaches emissions management through a lens of integration, with a key emphasis on organisational safety enhancement and liability reduction to foster trust and cultivate a positive environmental image. Sphera's carbon accounting software centres on dissolving information silos by centralising reporting, data, and management tools. In addition, Sphera’s platform cultivates collaborative efforts within teams dedicated to safety and sustainability pursuits.
Still not sure which carbon accounting software is best suited to the needs of your business? Click here to learn more about Plan A’s leading carbon accounting platform.
As the global economy is undergoing a rapid transition towards net-zero, businesses that do not take the lead on sustainability will be unable to remain competitive. As such, the integration of carbon accounting software, rather than using internal sustainability solutions, is vital. While there are a wide array of carbon accounting software vendors, it is crucial that businesses remember to look for a comprehensive platform that is user-friendly, underpinned by data, decarbonisation-oriented, scalable, and able to be tested prior to purchasing.
Book a demo with Plan A today to kickstart your net-zero journey