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April 4, 2024

What is carbon accounting and why is it important?

Danielle White

Carbon accounting is the process of measuring and quantifying the amount of greenhouse gas (GHG) emissions released into the atmosphere because of an organization’s direct and indirect activities. 

By conducting carbon accounting, organizations can gain insights into their emissions profile, identify areas for improvement, and develop strategies to reduce their environmental impact. This demonstrates a commitment to sustainability while complying with regulatory requirements. It also shows a willingness to respond to stakeholder demands for transparency and net zero initiatives.  

Why calculate carbon emissions?

Regulatory mandates

The Securities and Exchange Commission (SEC) is proposing amendments to its rules under the Securities Act of 1933 and Securities Exchange Act of 1934 that would require filers to include GHG emissions data in their registration statements and annual reports.

Inter-business regulation

Businesses not directly subject to the proposed SEC regulations may still be required to disclose emissions data as part of the supply chain for an organization subject to SEC requirements.

Strategic business advantage

As companies face heightened pressure for greater transparency around their carbon emissions, providing emissions data to various stakeholders can be a strategic business advantage. 

How can MMA Environmental help? 

We recommend a three-step process:

1. Set the boundary
    a. Confirm business goals and objectives
    b. Set the organizational and operational boundaries
    c. Perform process mapping

2. Conduct greenhouse gas emissions inventory
    a. Collect required data for key sources of scope one,
        two, and three, carbon emissions
    b. Quantify GHG emissions in CO2e

3. Establish a baseline
    a. Report and set targets
    b. Discuss and establish science-based reduction goals
    c. Formalize a reduction strategy
    d. Report and review emissions annually

Ready to get started?

Let our environmental team help you. We are a professional environmental advisory practice that helps clients identify, quantify, and mitigate environmental risks. We use operational strategies, transactional liability solutions, legacy risk assessment, and emerging risk solutions to help your organization. 

Carbon accounting services are at the forefront of Marsh McLennan Agency Environmental’s portfolio of emerging risk solutions. Our team gives clients the expertise and extra bandwidth to provide auditable emissions calculations, helping them gain a competitive edge and commercial advantage.

Contact one of our Marsh McLennan Agency specialists to help you quantify your carbon footprint.

Interested in learning more? Check out our recent insights, Environmental risks for middle-market companies and ESG: Incorporating corporate governance standards into your business operations, for more knowledge on environmental and corporate responsibility.