Carbon Accounting and reporting: What is it and Why report it.

Carbon footprinting, accounting and reporting is fast becoming a hot topic of conversation as we approach COP26.

Carbon Accounting and reporting background

Carbon footprinting, accounting and reporting is fast becoming a hot topic of conversation as we approach COP26. Carbon accounting and reporting is helping companies get an accurate representation of their carbon emissions and take ownership of the emissions they emit. However, calculating those emissions is a huge project that consists of multiple steps and requires an accurate, science based system to standardise the process. This is why the Greenhouse Gas (GHG) protocol was created as a comprehensive global standardised framework to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains and mitigation actions. 

The GHG protocol provides the framework for businesses, governments, and other entities to measure and report their greenhouse gas emissions in ways that support their missions and goals. The GHG protocol measures the amount of carbon dioxide (CO2) equivalent released into the atmosphere during the manufacturing and distribution process. To convert emissions of a gas into CO2 equivalent, its emissions are multiplied by the gas's Global Warming Potential (GWP). The GWP considers the fact that many gases are more effective at warming Earth than CO2 per unit mass. 


The question on everyone’s mind is ‘Who needs to report on CO2 emissions?’

The simple answer to this complex question is currently all ‘large companies’ are required by law to report their carbon emissions. 

In 2018 Regulations required large, unquoted companies, within the UK, that consume more than 40,000 kilowatt-hours (kWh) of energy in the reporting period to include energy and carbon information within their directors' (trustees') report, for any period beginning on or after 1 April 2019. 

Large companies, as defined in sections 465 and 466 of the Companies Act 2006, are companies that meet two or more of the following criteria: 

  • turnover (or gross income) of £36 million or more, 
  • balance sheet assets of £18 million or more, 
  • 250 employees or more. 

Where a large company does not consume more than 40,000 kWh of energy in a reporting period, it qualifies as a low energy user and is exempt from reporting under these regulations. A statement to this effect should be included in the academy trust's directors' (trustees') report.


So why should we report on our GHG emissions?

Firstly, the reasons for the reporting of GHG emissions will differ for each company, but there are several overarching reasons that are more common than others. 

  1. To reduce carbon emissions as part of your pledge to becoming net-zero. 
  2. Understanding your businesses contribution to climate change and how to reduce it. 
  3. Becoming more competitive by generating new business when you reduce production cost. 
  4. Comply with government regulations regarding accurate reporting of carbon emissions.  
  5. Providing customers with accurate information regarding your carbon emissions. 
  6. Save money by reducing production costs. 

The responsibility and expectations to reduce carbon emissions is rapidly increasing to include all business enterprises, so why not be ahead of the trend and start your carbon accounting and reporting journey early to avoid a headache later when it becomes a requirement, rather than a suggestion. If we all do our part, we can make a difference in reducing the UK’s current carbon emissions resulting in a global impact that will be beneficial for all.