How to choose a carbon accounting tool for your business

Choosing an emissions reporting platform can be one of the more consequential decisions a sustainability team has to make. 

The right platform can cut costs by streamlining data gathering and disclosure. It can also help translate emissions reductions into a business advantage. The flipside, of course, is that a flawed decision can take a significant amount of time and money to rectify.

To help teams choose the right platform for their needs, we asked sustainability leaders and consultants to share the questions they bear in mind as they vet vendors. If you have a question you’d like to add, email editor@trellis.net.

Which capabilities matter most to your team? 

Many emissions reporting platforms do more than tally carbon numbers. Start by considering how you plan to use the platform, said Alex Appel, a sustainability manager at MHP in Germany, an automotive consultancy owned by Porsche. Then rate the importance of each capability. The answers will vary by industry and by company. For his automotive clients, Appel assigns high scores to reporting and forecasting functions, followed by the ability to run efficiency analyses.

Will the platform integrate with other systems?  

“Can carbon data sit alongside financial data so companies can link emissions to margin, procurement and capital decisions?” asked Warwick Russell, founder of New Zealand-based GreenMetrics, which advises leaders of carbon-intensive businesses. “My general takeaway after testing several tools is that the market has advanced rapidly in dashboards and reporting. The next challenge is to build a carbon data infrastructure that finance and operations teams can rely on for decision making.”

Chris Perzan, former chief environmental counsel at International Motors, a truck manufacturer, suggests considering the option to integrate with environmental compliance systems. “I always wanted a single platform to reduce training and overall user burden. That is usually the case at least for operations people, like those at plants.”

What kind of team backs up the platform?

Look for experience managing emissions, suggested Paul Evans, operating partner at Palisade Impact, an international investment firm focusing on solutions to environmental and social challenges. 

Evans was recently involved in vetting platforms for Repurpose It, a resource recovery company. After a successful one-year trial, Repurpose It opted for the Gravity platform, after which it was rolled out across the Palisade portfolio. “We chose Gravity because it wasn’t theoretical carbon accounting ‘in the sky’,” he said. “It was a partner with real world experience operating businesses.”

David Temme, sustainability officer at Lerman Enterprise, a U.S. steel processor, advised buyers to ask how platform teams can help clients save money. “The data harvested by these platforms is the same, but how you use and leverage that data is something to really keep in mind,” he said. “Things like having a dedicated energy team that sifts through your data and works with you to find opportunities to turn that data into cost savings was something that spoke to us.”

Is the system compliant with International Organization for Standardization (ISO) rules?

ISO standards are likely to become increasingly important to sustainability teams now that the organization is working to harmonize its rules with those from the Greenhouse Gas Protocol, the dominant source of emissions accounting guidelines.

ISO is more process-orientated, noted Perzan, who now advises companies through his firm Kyndenos. “A platform that includes things like audit reminders, tracking of controlled documents, audit tracking and approval hierarchies, and that is aligned with ISO, would be useful for companies that will certify to ISO standards, or just want to follow a more rigorous process. “

What data does the platform rely on?

When primary data is missing, platforms use emissions factors to translate activity or spend-based numbers into emissions estimates. Russell suggested asking vendors about the emission factor databases they use and how frequently the numbers are updated. “Many platforms rely heavily on generic global datasets, which can materially affect accuracy,” he said.

In some cases, companies may want to augment general-purpose systems with industry-specific offerings. To calculate its Scope 3 inventory, Post Holdings, maker of breakfast cereals and other food products, contracted with HowGood, a food systems intelligence company that maintains a database of more than 90,000 agricultural emissions factors. 

“With many competing platforms it felt as if they were focusing too much on decarbonization offerings and solutions,” said Nick Martin, vice president for sustainability at Post. “That’s putting the cart before the horse. Bad data and assumptions can quickly lead to misguided decisions with Scope 3.”