Chapter 01 · Climate & transitionClimate & Greenhouse Gas Emissions
Carbon accounting
Definition
The process of calculating an organisation's greenhouse-gas emissions, expressed in carbon dioxide equivalent (CO₂e) using global-warming-potential conversions, and categorised under the GHG Protocol's scopes: Scope 1 (direct), Scope 2 (purchased energy) and Scope 3 (value chain). Together the three scopes constitute the corporate carbon footprint; Scope 3 is typically the largest share.
References
Organisational GHG calculation; spend-based vs activity-based vs hybrid methods; EEIO factors; GHG Protocol as most-used standard.
CO₂e and GWP conversions; scopes 1+2+3 as corporate footprint; Scope 3 typically largest.
Overview
What it means
Methodology defines credibility. Spend-based methods apply emission factors to expenditure (environmentally extended input-output factors) — fast but coarse; activity-based methods use physical data (kWh, kilometres, tonnes) — accurate but data-hungry; hybrid approaches mix both, improving as data mature.
The GHG Protocol Corporate Standard is the most widely used framework; regulatory regimes (CSRD/ESRS, California SB 253, ISSB-based rules) all build on it, increasingly with assurance requirements. Carbon accounting differs from, but feeds, product-level footprinting (life-cycle assessment) and project-level accounting in carbon markets.
How it is used
Companies produce annual inventories for disclosure and target-setting (SBTi baselines); auditors provide limited or reasonable assurance; the inventory drives reduction levers, supplier engagement and, where applicable, offsetting decisions.
Why it matters
"You can't manage what you don't measure" is literal here: carbon accounting is the evidentiary foundation of every net-zero claim, disclosure filing and carbon-market transaction — and its quality determines whether any of them can be trusted.