Carbon accounting & reporting for businesses in 2025

Carbon accounting is becoming crucial for businesses as we approach 2025. Here's what you need to know:

• New EU rules (CSRD) require about 50,000 companies to report on their climate impact

• Companies must track and report Scope 1, 2, and 3 emissions

• Only 9% of organizations could accurately measure their total greenhouse gas emissions in 2021

• Carbon tracking software like Emerald Power is essential for efficient data collection and reporting

• CSRD rules start taking effect from January 1, 2024, with different phases for various company sizes

Key steps for success:

1. Set clear boundaries for what to measure

2. Establish a solid data collection system

3. Use digital tools for tracking

4. Involve all relevant departments

5. Set science-based targets for emission reduction

Carbon accounting isn't just about compliance - it's about preparing your business for a sustainable future and potentially saving money in the process.

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What is Carbon Accounting in 2025

Carbon accounting in 2025 isn't just a fancy term - it's a must-have for businesses. It's all about measuring and tracking a company's greenhouse gas (GHG) emissions. But there's more to it than just crunching numbers.

Thanks to the Corporate Sustainability Reporting Directive (CSRD), carbon accounting is now a big deal in how companies operate. It's about understanding your environmental impact and doing something about it.

CSRD and ESRS Rules Explained

The CSRD and European Sustainability Reporting Standards (ESRS) have changed the game for sustainability reporting. These rules now apply to about 50,000 companies - that's a huge jump from the 11,000 under the old Non-Financial Reporting Directive.

Here's the lowdown:

• The CSRD applies to big EU companies and non-EU companies with a significant presence in the EU.

• Companies need to report on how climate change affects them AND how they impact the climate and society.

• Businesses have to disclose info on environmental, social, and governance (ESG) issues.

"High quality and reliable public reporting by companies will help create a culture of greater public accountability." – European Commission

This quote sums it up: the CSRD wants to make sustainability reporting as serious as financial reporting.

How Carbon Accounting Has Changed

Carbon accounting in 2025 is all about accuracy, automation, and integration. No more guessing or manual spreadsheets.

Here's what's new:

1. Automated Data Collection

Software now grabs data from various sources, cutting down on mistakes and saving time.

2. AI-Powered Analysis

Artificial intelligence helps spot where emissions are highest and suggests ways to cut them down.

3. Focus on Scope 3 Emissions

There's more attention on tracking indirect emissions throughout the value chain.

4. Real-Time Reporting

Companies can now keep an eye on their carbon footprint as it happens, allowing for faster decisions.

5. Integration with Financial Systems

Carbon accounting isn't separate anymore; it's part of financial reporting for a complete view of how a business is doing.

The change is huge. The BCG Carbon Emissions Survey Report 2022 showed that about 90% of companies didn't have good carbon emissions measurement just a few years ago. In 2025, that number has dropped as businesses adapt to new rules and what the market wants.

Carbon accounting software is now a must-have. Tools like ESG Flo and Persefoni are leading the pack, offering complete solutions that do more than just track emissions. They help with following rules, planning strategies, and even predicting what might happen in the future.

Alyssa Rade, Chief Sustainability Officer at Sustain.Life, puts it this way: "Carbon accounting is all about creating accountability." In 2025, this accountability is part of every aspect of how a business runs.

The future of carbon accounting is clear: it's not just about following rules, it's about getting ahead in business. Companies that get good at this will be in a better position to do well in a low-carbon economy, attract investors, and meet the growing demands of customers who care about the environment.

Main Parts of Carbon Reporting

Carbon reporting in 2025 is no walk in the park. Companies now track and report emissions in three main categories. Let's dive in:

Types of Emissions: Scope 1, 2, and 3

Scope 1: Direct Emissions

These are the emissions you create directly. Think:

• Fuel burned in company cars

• On-site manufacturing processes

• Leaky refrigeration systems

Scope 2: Indirect Energy Emissions

This covers the carbon footprint of the energy you buy and use:

• Electricity for offices and factories

• Purchased steam or heating

Scope 3: All Other Indirect Emissions

Here's where it gets tricky. Scope 3 is everything else in your value chain:

• Emissions from producing goods you've bought

• Business travel

• Employee commuting

• Waste disposal

• How customers use your products

"If a company truly intends to reduce or even eliminate its carbon footprint, it must address all three scopes and pay special attention to scope 3." - Workiva Carbon

Translation? You can't ignore Scope 3 if you're serious about going green.

How to Calculate Emissions

It's not guesswork. Here's the playbook:

1. Use the GHG Protocol Corporate Standard. It's the gold standard for measuring and reporting greenhouse gas emissions.

2. Collect data on fuel use, electricity consumption, and activities across your value chain.

3. Apply emission factors. These convert your activity data into GHG emissions.

4. Crunch the numbers. Use your data and emission factors to calculate total emissions for each scope.

Here's a quick example of Scope 2 emissions:

The European Commission says: "High quality and reliable public reporting by companies will help create a culture of greater public accountability." In other words, get your numbers right.

Scope 3 is the toughest nut to crack. You'll need to work with your entire value chain - suppliers, distributors, and even customers - to get the data you need.

In 2025, tech is your friend. Carbon accounting software like Emerald Power uses AI to crunch numbers faster and more accurately across all scopes. It's not just a time-saver - it's a game-changer for precision in emissions calculations.

Software Tools for Carbon Tracking

In 2025, carbon tracking software is a must-have for businesses serious about managing their emissions. These tools make carbon accounting a breeze by automating data collection, analysis, and reporting.

Emerald Power: Carbon Tracking Software

Emerald Power is the go-to solution for mid-market businesses looking to get a handle on their carbon emissions and stay CSRD compliant. Here's why it's a standout:

• It grabs emissions data automatically from your existing systems. No more manual data entry headaches!

• You get real-time updates on your emissions across all scopes. It's like having a carbon footprint dashboard at your fingertips.

• It plays by the rules of the Greenhouse Gas Protocol, so you know you're meeting international standards.

• AI does the heavy lifting, streamlining processes and spotting trends you might miss.

• CSRD reporting? Emerald Power's got you covered with tailored features to make compliance a snap.

But here's the real kicker: Emerald Power tackles Scope 3 emissions like a pro. It gives you the tools to work with your suppliers and analyze your entire value chain. That's the whole carbon impact picture, folks.

"Carbon accounting software is your secret weapon for measuring and managing your carbon footprint. It keeps you on the right side of regulations and helps cut out waste." - Mike, Author from Arbor

Emerald Power's not the only fish in the sea, though. Check out these other options:

• Sustain.Life: Tracks all emission scopes automatically and cooks up custom reduction plans.

• Microsoft Sustainability Cloud: Uses AI for smart insights and plays nice with other Microsoft tools.

• Persefoni: Spots errors with AI and gives you a clear Footprint Ledger for audit-ready reports.

When you're shopping for carbon tracking software, keep these things in mind:

1. How easily does it fit with your current systems?

2. Does it cover all the emission scopes you need?

3. Can it handle the reporting you need, especially for regulations?

4. Is it user-friendly?

5. What kind of support and training do they offer?

Now, let's talk money. Emerald Power starts at €249 a month for their basic plan. But if you're looking at the big guns, enterprise solutions can set you back anywhere from €35,000 to €250,000 a year. It all depends on how complex your operations are and what features you need.

As we roll into 2025, getting your carbon accounting right isn't just about following rules. It's about making your business future-proof in a world that's going low-carbon. Investing in solid carbon tracking software? That's just smart business.

Meeting Carbon Reporting Rules

The Corporate Sustainability Reporting Directive (CSRD) is coming, and it's a big deal. By 2025, this new rule will change how companies report their environmental impact.

The CSRD isn't just another regulation. It's a major shift that will affect about 50,000 companies across Europe. That's way more than the 11,000 covered by the old Non-Financial Reporting Directive (NFRD).

When CSRD Rules Take Effect

The CSRD is rolling out in stages:

1. January 1, 2024: The Big Players

Large public-interest companies with over 500 employees go first. They'll report their 2024 emissions in 2025.

2. January 1, 2025: The Next Tier

This phase includes large companies that meet at least two of these:

• Balance sheet over €25 million

• Net turnover over €50 million

• More than 250 employees

These companies will report their 2025 data in 2026.

3. 2026: SMEs Join the Party

Listed small and medium-sized enterprises (SMEs) start in 2026. But they can opt out until 2028 if they need more time.

4. 2028: Non-EU Companies

Non-EU parent companies with €150 million in annual EU revenues start in 2028. They'll collect data for their 2029 report.

"Regardless of reporting timelines, all companies should begin preparing for the CSRD now!" - Ecochain

Ecochain's right. Don't wait until the last minute. Here's what you should do:

1. Start Your Dry Runs: Do mock carbon accounting now. It'll help you find and fix problems early.

2. Tackle Scope 3: This is the hard part. Start a mock Scope 3 calculation to find weak spots in your supply chain.

3. Get the Right Tools: Carbon accounting software like Emerald Power can make things easier. It automates data collection and helps with CSRD compliance.

4. Train Your Team: Make sure your staff knows what CSRD requires. The more they know, the smoother things will go.

5. Plan for the Long Haul: CSRD isn't a one-time thing. From 2025, you'll need a plan to reach net zero by 2050. Start thinking about that now.

Time's running out, and there's a lot at stake. If you don't comply, you could face legal trouble, hurt your reputation, lose business, or even get shut out of markets.

But here's the good news: getting ahead on CSRD compliance isn't just about avoiding trouble. It's a chance to show you care about sustainability, make your business run better, and maybe even save some money.

As we get closer to 2025, carbon reporting is becoming a big part of doing business. By getting ready now, you're not just preparing for new rules - you're setting up your business for success in a world that cares more and more about sustainability.

Planning to Cut Carbon Emissions

Businesses are under the gun to slash their carbon footprint as we near 2025. With global greenhouse gas emissions hitting 36.3 gigatonnes in 2021, it's crunch time for companies to act. Here's the lowdown on setting and nailing carbon reduction goals:

Setting Carbon Reduction Goals

Want to set realistic emission targets? Here's how:

1. Know Your Starting Point

First things first: figure out where you stand. Do a deep dive into your Scope 1, 2, and 3 emissions. This is your jumping-off point for cutting back.

2. Get on Board with Science-Based Targets

Science-based targets (SBTs) keep your goals in sync with what's needed to cap global warming at 1.5°C. As of March 2022, 2,643 companies worldwide have jumped on the SBT bandwagon.

"Science-based targets provide strategic and operational clarity on top-level sustainability and ESG targets." - Unilever

3. Think Short and Long-Term

Break it down:

• Short-term: Shoot for a 4.2% yearly cut in total emissions over the next 5-10 years.

• Long-term: Aim to slash total emissions by 90% by 2050 or earlier.

4. Make It Official

Sign up with the Science Based Targets initiative (SBTi). It adds street cred to your goals and hooks you up with useful resources.

Measuring Progress

Keeping tabs on your emission cuts is key to staying on track. Here's how:

1. Get Smart with Carbon Accounting Software

Invest in top-notch carbon tracking software like Emerald Power. It does the heavy lifting on data collection, gives you real-time updates, and keeps you in line with GHG Protocol standards.

2. Report Regularly

Set up a system for quarterly or yearly emission reports. It keeps your team on their toes and helps spot areas that need work.

3. Size Up the Competition

See how you stack up against industry standards and rivals. It'll tell you if you're killing it or need to step up your game.

4. Zero In on Key Performance Indicators (KPIs)

Keep an eye on specific KPIs tied to your carbon goals. For instance:

5. Harness AI and Data Analytics

Use cutting-edge analytics to spot trends and find new ways to cut back. AI can predict future emissions based on current patterns and suggest ways to optimize.

Cutting carbon isn't just about playing by the rules - it's about making your business future-proof. Take Microsoft, for example. They're aiming to be carbon negative by 2030 and wipe out their historical emissions by 2050.

"What we're trying to do is both set an incentive for our different business groups... So we'll charge a fee based on the cost of abatement, and then, on the other side, we'll go deploy those funds." - Phillip Goodman, Director of Carbon Removal Portfolio at Microsoft

Tips for Success

To nail carbon accounting and reporting in 2025, follow these key steps:

Getting Good Data

Good data is the backbone of accurate carbon accounting. Here's how to get it right:

1. Define Clear Boundaries

Know what you're measuring. Outline which parts of your operations you'll include in your carbon footprint calculation. This ensures you cover all direct operations and greenhouse gases.

2. Set Up a Solid Data Collection System

In 2022, only 32% of companies fully reported their Scope 1 emissions. Don't be in the 68% that missed out. Here's what your data collection plan needs:

• Clear goals

• Who's doing what

• Money set aside

• The right tools

• A realistic timeline

3. Go Digital

Use carbon tracking software like Emerald Power. These tools make data collection a breeze, give you real-time updates, and keep you in line with GHG Protocol standards. They're especially handy for tackling tricky Scope 3 emissions.

4. Check Your Data

Don't skip quality checks. In 2022, about 1 in 4 companies were off by at least 50% in their emissions reports. To avoid this:

• Use the same data collection methods across your company

• Check your data regularly

• Use one central platform for all your info

5. Physical Data Beats Money Data

When you can, use physical data (like kilowatt-hours or liters of fuel) instead of monetary data. It gives you more accurate carbon emissions calculations.

6. Get Everyone Involved

Good data collection needs teamwork. Bring in key people from operations, accounting, EHS, legal, procurement, and even your suppliers.

7. Add Detail to Your Data

The more detailed your data, the better your carbon footprint calculations. For example, break down energy use by department instead of just having one big number for the whole company.

8. Have a Carbon Data Game Plan

You need a solid strategy for your carbon data. As Marian Van Pelt from ICF puts it:

"To set and hit decarbonization goals, a company needs to measure its GHGs."

Your strategy should include:

• A digital dictionary so everyone uses the same terms

• Easy-to-find data that works with your software

• Rules for metadata to keep things clear and traceable

Wrap-up: Getting Started with Carbon Accounting

As 2025 approaches, carbon accounting is becoming a big deal for businesses. It's not just about following rules - it's about making sure your company is ready for a world that cares more and more about sustainability.

Why does carbon accounting matter? It helps you figure out how much your company impacts the environment. It's the first step to cutting down on emissions and running your business in a more eco-friendly way. Plus, with new rules like the Corporate Sustainability Reporting Directive (CSRD) coming soon, many businesses will have to do it by law.

Here's how to get started:

1. Set clear boundaries

Figure out which parts of your business you'll include when calculating your carbon footprint. This makes sure you cover all your direct operations and greenhouse gases.

2. Collect accurate data

Work with your team to gather all the information you need. Remember, good data is key to accurate carbon accounting.

3. Use the right tools

Invest in carbon tracking software like Emerald Power. These tools make it easier to collect data, give you real-time updates, and make sure you're following GHG Protocol standards.

4. Understand different emission types

Learn about Scope 1, 2, and 3 emissions. Scope 3 usually makes up over 80% of a company's greenhouse gas emissions, so don't ignore it.

5. Set science-based targets

Make sure your emission reduction goals match what's needed to keep global warming under 1.5°C. As of March 2022, 2,643 companies worldwide have set these kinds of targets.

Carbon accounting software is a big help. It automates data collection, makes things more accurate, and makes reporting much easier. For example, Emerald Power offers:

• Automated data collection from your existing systems

• Real-time updates on emissions across all scopes

• AI-powered analysis to spot trends and find ways to improve

• Features to help you comply with CSRD

"I encourage other sustainability teams to embrace climate software early on. If you're setting science-based targets, Watershed makes it really easy to understand the steps you need to take to meet them." - Sophia Beavis, Workplace Sustainability Manager, Okta.

Looking ahead to 2025, carbon accounting will likely become more connected to financial reporting. It's not just about following rules - it's about making your business more efficient and more attractive to customers and investors who care about the environment.

FAQs

What is the GHG Protocol policy?

The GHG Protocol is the go-to standard for greenhouse gas accounting worldwide. It's the brainchild of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

Here's the lowdown:

The protocol splits emissions into three buckets:

1. Scope 1: Stuff you directly own or control

2. Scope 2: Indirect emissions from energy you buy

3. Scope 3: Everything else in your value chain

It's a big deal. Back in 2016, 92% of Fortune 500 companies that responded to the CDP were using the GHG Protocol, either directly or indirectly.

The protocol doesn't just focus on carbon dioxide. It covers all the major greenhouse gases, including methane and nitrous oxide.

"The GHG Protocol supplies the world's most widely used greenhouse gas accounting standards and guidance." - World Resources Institute

If you're a business gearing up for carbon accounting in 2025, you'll want to get cozy with the GHG Protocol. It's not just about ticking boxes - it helps you pinpoint where your emissions are coming from, so you can tackle them head-on.