January 30, 2021 EnHelix Articles and Blogs

What Is Carbon Accounting and why it Matters to Climate Change?

In a world where the need to tackle climate change with carbon accounting is increasingly on the agenda, regulators, consumers and investors expect businesses to act responsibly so we all can make a real impact on the climate change situation. It all begins with knowing the environment in which you are operating now and understanding how it might change and affect your future.

Already, there’s a global consensus on the role of carbon and other greenhouse gases in climate change. To reduce the number of emissions of carbon in the atmosphere, it’s vital to first know how much of it is released into the atmosphere as this will provide a blueprint for taking steps towards a cleaner world. This is where carbon accounting comes in.  

What is Carbon Accounting?

Carbon accounting broadly refers to the process by which an entity measures the amount of carbon dioxide it emits. The entity could be nations, states, corporations or individuals. Carbon accounting is carried out by different entities so they can work out how much CO2 they are emitting into the atmosphere. This process is also known as greenhouse gas inventory.

Once entities can determine how much carbon is being emitted, only then will they understand their climate impact and set goals to limit their emissions. 

Why do we need carbon accounting?

One of the questions people often ask is how greenhouse gases like carbon affect climate change. According to research, when greenhouse gases are emitted, they naturally rise into the atmosphere. The problem is that while they allow the heat from the sun to reach the earth, they prevent some of the sun’s heat from escaping back into space, thus leading to an increase in temperature. 

Although the effects of global warming are yet to be fully understood, scientists believe that the rising levels of carbon and other greenhouse gases don’t just increase earth’s temperature, it also leads to rising sea levels, increase in heavy precipitation (flooding and erosion) reduced agricultural yields etc. 

As a result, companies have a role to play in reducing emissions to meet the carbon budget set by the scientific community (and/or regulators). 


Can it make any difference in climate change?

As a climate crisis looms, one of the most important actions that nations and organizations can take is to use carbon accounting to fight climate change. It’s easy to think that quantifying your company’s emissions isn’t worth the time and effort. After all, what’s the likelihood that putting a number to your greenhouse gases is of any significance when it comes to combating climate change?

Interestingly, many companies don’t have the faintest idea of how much the emissions from their activities can impact the world around them. Experts assert that all hands must be on deck if we are to tackle climate change and do so fast. The seemingly little efforts of everyone are what will yield the biggest results.

The first step towards cutting down on emissions is to quantify your carbon footprint because, without a measurement, your carbon footprint cannot be properly managed. Carbon accounting can help provide answers to questions like:

  • How much carbon is being emitted?
  • Who is responsible for these emissions?
  • Which methods allow for the biggest carbon reductions?
  • Are there policies that appear green but actually increase emissions? 

Like all accounting methods, carbon accounting is not perfect, but it gives results that are as accurate and complete as possible. With the results from carbon accounting, organizations can take responsibility for their impact and balance it by ensuring that an equivalent amount of carbon is either absorbed or avoid ever being emitted elsewhere. This is known as carbon offsetting. 

Benefits of carbon accounting

Carbon accounting is beneficial in three major ways:

1. Economic: Carbon accounting can help enterprises that use a lot of energy reduce the amount of energy and resource they use, which will translate to low costs. 

2. Environmental: Incorporating carbon accounting can help reduce the concentration of carbon in the atmosphere, thus stopping climate change.

3. Social and business development: Businesses that incorporate carbon accounting are more likely to enjoy positive PR than those that don’t, and this can help develop trust and loyalty with customers.


Carbon accounting and reporting allows companies to know and demonstrate to stakeholders and the general public what their contribution is to combatting climate change. It will also help organizations reduce their energy use and prepare them for potential legislation on carbon emissions in future.