In today’s world, the topic of carbon emissions is prevalent and the call for environmental responsibility is louder than ever.
Charities, in particular, have a unique opportunity to lead by example and drive meaningful change. Carbon accounting isn’t just a tool for big corporations; it’s a powerful strategy that can help your organisation reduce its carbon footprint, save money, enhance transparency and build trust with your supporters.
By embracing carbon accounting, you can stand out by leading the way in creating a sustainable future while continuing to make a positive impact on the communities you serve. We utilise specialist carbon accounting software which integrates seamlessly with your existing accounting systems to provide detailed insights into your carbon footprint.
What is Carbon Accounting?
Carbon accounting involves tracking, measuring and reporting the amount of carbon dioxide and other greenhouse gases released into the atmosphere by an organisation’s day-to-day activities.
It helps organisations to understand:
- Where your emissions come from (e.g. energy use, methods of travel, supply chain etc)
- What your emissions level is (in tonnes)
- How to reduce or offset emissions over time, including how you can potentially save carbon and cut costs
Why does it matter?
Government regulations and legal requirements:
- Large UK companies are legally required to report GHG emissions under the streamlined energy and carbon reporting framework
- NHS requirements around carbon reduction plan and net zero commitments. From April 2024, all new NHS contracts of £5m+ must publish a carbon reduction plan. And, starting in April 2027, all NHS suppliers must publicly report emissions targets and publish a carbon reduction plan aligned with NHS net zero goals.
- Government and local councils are also looking to reduce their scope 3 emissions so it is likely they will be requesting carbon reduction plans soon. For example Cambridgeshire County Council estimate that 99% of their emissions fall under scope 3 (supply chain, employee commuting etc) so they are looking to measure and report on these.
Strategic & financial benefits:
- Aligns with your organisation’s objectives and activities
- Identifies energy and cost-saving opportunities
- Supports sustainable innovation and operational resilience
- Enhances brand credibility, customer trust and reputation within your community.
What type of emissions are there?
Scope 1: Direct emissions
- Emissions from sources owned or controlled by an organisation
- Examples: vehicles (fuel use), on-site fuel combustion (e.g. gas boilers, generators etc), manufacturing processes.
Scope 2: Indirect emissions (energy)
Emissions from the generation of purchased energy (electricity, steam, heating, cooling etc). These are a result of energy usage.
Scope 3: Indirect emissions (value chain)
All other indirect emissions (not included in Scope 2) both upstream and downstream;
- Examples: business travel, employee commuting, purchased goods and services, waste disposal, product use and end-of-life, supply chain and transportation.
- We use a specialist carbon accounting software;
- Data is imported directly from your accounting software (e.g. Xero, QuickBooks, Sage) or your general ledger reports via CSV/Excel exports
How can PEM support you with Carbon Accounting?
- We map your transactions and attribute an emissions factor, giving you a figure for carbon for each of your business activities/expenses. These categories reflect real-world activities (e.g. electricity use, travel, freight)
- Reporting can be produced as a one-off or on a regular basis.
- Relevant emissions factors are applied to each category based on UK government datasets and we convert financial or activity data into CO₂e (carbon dioxide equivalent)
- We generate reports to include Scope 1, 2, and 3 emissions breakdowns, emission hotspots and trends to provide the insights you need
Conclusion
While carbon accounting is not yet a mandatory requirement for all businesses, it presents a valuable opportunity for charities to lead the way in environmental responsibility. It is also becoming mandatory for suppliers of the NHS, government and local councils.
Getting ahead of the curve will not only open doors to winning potential new contracts, but will position your charity as a pioneer in sustainability, setting an example for others to follow.
Learn more and get advice
Please get in contact with our Virtual Finance Office (VFO) team if you would like to know more about PEM’s carbon accounting services.
Please note that this content is not intended to give specific technical advice. It is designed to highlight some of the key issues rather than provide an exhaustive explanation of the topics. Professional advice should always be sought before action is either taken or refrained from as a result of information contained herein.
