What is carbon accounting software?

Carbon accounting typically follows the GHG Protocol, which categorizes emissions into three scopes: Scope 1 (direct emissions), Scope 2 (purchased energy), and Scope 3 (indirect supply chain emissions). Software automates the data collection and calculation across these scopes.

Scope 3 emissions are the most difficult to calculate because they include the upstream and downstream emissions of your suppliers and customers. A company buying $50,000 of materials from a manufacturer needs to estimate the carbon embedded in that supply chain. Carbon accounting software uses spend-based emissions factors to approximate this, pulling financial data from your accounting software and converting spend by supplier category into estimated tonnes of CO2 equivalent.

Persefoni, Watershed, and Sweep are leading carbon accounting platforms. Many integrate with existing accounting software to pull spend data and estimate emissions based on supplier categories. Financial accounting software like Note.now provides the transaction data that feeds into carbon calculations.

As ESG reporting requirements become mandatory in more jurisdictions - the SEC climate disclosure rules in the US and CSRD in Europe are driving this - more businesses will need to connect their financial and carbon accounting systems. Choosing accounting software with good API access makes this integration straightforward when the time comes.