carbon-accounting
September 27, 2020 EnHelix Articles and Blogs

Carbon Accounting in New Energy Transition Economy

Carbon accounting is essential in energy transition for energy companies. We are seeing companies starting to engage in carbon accounting for the following reasons.

  • Investors demanding oil and gas companies to higher ESG standards
  • The public prefers brands with better sustainability track records
  • Customers are demanding their energy providers to adhere to a higher standard on carbon footprinting (GHG Protocol Scope 3)
  • Knowing greenhouse gas emission helps move towards gradual emission reducing strategy

As the public demands greater disclosure on carbon emission and plan to sustainability, companies are now beginning to consider a path to adhere to TCFD type of disclosure framework. TCFD reporting requires much more carbon-capturing data than traditional GRI type of reporting.

Some companies are beginning to move towards a gradual path of net-zero emission. However, the majority of oil and gas companies have yet to start measuring their scope 1, 2, and 3 carbon emission throughout their value chain.

What is Carbon Accounting?

Carbon accounting is the way to measure the amount of GHG (Greenhouse Gas) emission to the atmosphere that absorbs and re-emit heat. The main GHG are carbon dioxide, methane, and nitrous oxide.

Oil and gas companies that produce hydrocarbons like crude oil, natural gas, coal, and petroleum products. In carbon accounting, the GHG emission is taking the process of producing these products and also the product itself.

6 Ways to Start Carbon Accounting for Oil and Gas Companies

Consider using a professional carbon accounting software for carbon accounting. The software helps automate the process and keeps carbon history for disclosure reporting.

carbon-accounting

1. Start from the Top

Carbon accounting is becoming an important tool for companies to quantify their carbon reduction effort. Investing communities are demanding companies to have a sustainability plan.

The carbon initiative needs to be sponsored by the board of directors and executive management to get the attention and investments it needs to succeed.

2. Define a Carbon Accounting Strategy

For companies that have not started carbon accounting practices, the best approach is to consult with ESG consultants to help define a practical carbon footprinting plan that works for your assets.

Consultants and software are essential to create and retain the data for audit and disclosure purposes.

Focus on only what’s important to the company.

3. Assign Resources

Carbon accounting requires dedicated resources to capture and records GHG data from various departments. The level of effort requires a team of personnel from carbon capturing, recording, verification to reporting.

Carbon capture software should help automate some of the processes and reduce the amount of manual effort.

4. Start Capturing Carbon Data

With the carbon strategy plan, companies can start by identifying the starting point in their energy value chain to capture the data. The data needs to be verifiable and accurate.

Most carbon accounting software comes with a GHG conversion calculator that helps convert activities to GHG equivalent results.

5. Benchmark and Improve

After accurate carbon GHG is captured and converted to standard emission metrics. The accounting team should benchmark the data and compare periodically to identify hot spots for improvements.

Often, for oil and gas companies, there are no practical ways to reduce GHG emissions. There are many mitigating measures to take to offset emissions.

ESG software and consultants can advise which offsets to use to achieve a practical and gradual path to net zero-emission.

6. ESG Carbon Accounting Disclosure

Filing an ESG or sustainability disclosure is an important approach to let investors and the public know about carbon metrics, efforts, and results. There are many ESG disclosure frameworks and we recommend TCFD and SBSA for more demanding investing managers.

What are the Benefits of Using Carbon Accounting Software?

To measure the company’s carbon footprint requires a lot of resources, time, and investments. The software helps to lower the cost

1. Fast onboarding to carbon accounting

2. Integrate with existing accounting software

3. Automate and constant GHG library data updates

4. Retains and benchmark GHG data and histories for auditors and disclosure

Energy companies are facing more pressure from investment and the public in the form of higher ESG disclosure and public policies. This is the time to consider starting a carbon project for disclosure.

EnHelix ESG software is constantly ranked the best in the ESG community. The software provides many tools and helps companies start carbon accounting and ESG projects easily and quickly.

For a software demo, please reach out to our team to schedule.

What is Carbon Accounting?

Carbon accounting is the way to measure the amount of GHG (Greenhouse Gas) emission to the atmosphere that absorbs and re-emit heat. The main GHG are carbon dioxide, methane, and nitrous oxide.
When oil and gas companies produce hydrocarbons like crude oil, natural gas, coal, and petroleum products, carbon accounting takes account of the GHG emitted during the production and also the product itself.carbon-accounting

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