How to unlock the full potential of your carbon accounting software

Sustainability is rapidly evolving into a standard business expectation as companies face mounting pressure to measure, manage, and mitigate their environmental impact. Whether driven by customer demands, investor preferences, or regulatory requirements, the imperative for businesses to embrace environmental responsibility has never been more salient. Often, the first place an organization begins is with measuring and disclosing their greenhouse gas emissions, which are critical drivers of human-caused climate change.

This process, colloquially known as carbon accounting, is a foundational first step for enabling successful sustainability efforts. By effectively tracking emissions, organizations are not only able to comply with the maturing reporting requirements around the world (e.g., the EU’s Corporate Sustainability Reporting Directive [CSRD], California’s SB 253, or the standards of the International Sustainability Standards Board but they also gain quantitative clarity on their impact. This allows the development of robust strategies for emission reductions and playing a vital role in mitigating climate change.

Challenges of carbon accounting

Despite the desire (or need) to act, large organizations often encounter challenges when trying to consistently track carbon. According to a survey in early 2024, nearly half of companies still utilize spreadsheets to track environmental, social, and governance (ESG) data, including emissions. This method can be sufficient for smaller organizations, but medium to large organizations may find themselves in a risky position for pending audit requirements. Other challenges include:

• Changing measurement needs: Shifting emissions measurement methodologies, yearly updated emission factors, and revised standards can complicate consistent and accurate reporting. Dynamic regulatory environments and nuanced differences across industries create additional challenges, especially for multinational, cross-industry organizations.

• Data gathering complexities: The underlying business data needed to calculate emissions across scopes one, two, and three must be sourced from multiple organizational functions and systems, as well as potentially from vendors in the supply chain. Extracting required data from disparate locations without reliable tools means a monumental and error-prone task falling to the ESG or environmental teams.

• Lack of internal expertise: For many organizations, carbon accounting is a new endeavor, and the in-house expertise and capacity necessary for measurement and navigation of reporting requirements may be limited. Regulations, like the one proposed by the Securities and Exchange Commission (SEC) compelling public companies to disclose scope three emissions material to core business operations (and currently paused as of August 2024), underscore the need for robust, consistent, and auditable data collection and centralization strategies, as well as the expertise to adapt over time.

Lacking expertise and capacity, organizations often end up using familiar tools like Excel and Email to manually collect data and perform necessary calculations. These can result in a higher risk of inconsistency and lack of control over the long-term.

Carbon accounting software: A promising, but daunting solution

As a possible answer to these challenges, organizations are increasingly turning to carbon accounting software to reduce dependencies on manual collection and calculation processes. Corporations such as Estee Lauder, sweetgreen, and At Home made headlines for their investment in software to improve ESG reporting, calculate emissions, and elevate carbon footprint visibility. Reading the demand spike, venture capital firms poured $767 million into carbon accounting tech startups in 2022, adding fuel to the expected 22.8% compounded annual growth rate in the global carbon accounting software market through 2030.

If selected and implemented correctly, carbon accounting software can offer organizations dedicated emissions management (and often more) platforms that results in:

• Improved data accuracy and consistency.

• Better transparency, traceability, and auditability of data.

• Automated and compliant reporting.

• Increased capacity to model and measure the impact of carbon reduction actions.

But selecting the optimal carbon accounting software is not a one-size-fits-all endeavor. With a plethora of options in the market, each boasting its own set of features, support models, and industry focus, we recommend organizations perform a robust vendor analysis to find the right fit. Then, even after selecting a vendor, organizations must consider how to integrate the carbon accounting software into their data/technology landscape. Thinking of carbon accounting software as a stand-alone solution might be tempting given its software as a service (SaaS) nature, but without planning for integrations with underlying architecture or defining processes for data collection and management in alignment with broader data strategy, an organization may still end up with an insufficient solution.

Beyond technology and data, successful implementation should include attention to the organizational processes to facilitate the change. Leadership must equip their organizations with change management partners or resources that facilitate the elevation of carbon accounting to “business as usual” processes and instill decarbonization efforts as an ongoing business practice.

Credera’s proven approach for carbon accounting success

At Credera, we recognize the complexities of the carbon accounting landscape and the importance of selecting the right solution. As proven data experts and technologists, we offer an approach that leads organizations through each step of the selection process, from understanding unique requirements to designing and implementing the data management strategy to implementing the chosen software.

Phase 1: Understanding your needs

Through in-depth discussions and workshops, we gain an initial understanding of your organization and goals, including:

• Business profile: We screen industry sector, operational footprint, and regulatory environment to tailor recommendations. Factors such as whether your organization is heavily product-based versus service-based operations, if you have an international presence, and whether a previous emissions screening has been completed can significantly impact your requirements.

• Strategic goals: We explore your climate ambitions. Are you seeking to measure corporate emissions or emissions of specific products you sell? Do you see yourself as a climate leader or just starting your sustainability journey?

• Technology landscape: We assess your current technology environment, including existing enterprise software and data management capabilities and policies, to facilitate a smooth implementation and development of required data engineering.

Phase 2: Selecting the right vendor

The carbon accounting software market is vast, complex, and constantly evolving. Credera demystifies the industry by partitioning it into six easily digestible segments to help narrow the field of consideration:

Platform segment Comprehensive solutions offering a wide range of features for carbon accounting and ESG functionality. Pureplay climate segment Software providers specializing primarily in carbon accounting solutions, with some additional environmental offerings. Broader ESG segment Solutions encompassing carbon accounting alongside broader ESG functionalities.

Once we've identified the most relevant segment(s) for your needs, Credera assesses vendors across five key criteria to pinpoint which one is best suited to accelerate your carbon accounting operations:

1. Features: Does the vendor offer the functionalities you require, such as applicable report generation, routinely updated emission factor libraries, technical integrations, or decarbonization forecasting (among others)?

2. Implementation: Is the vendor properly equipped to implement, configure, and, if needed, customize their solution to meet your specific needs?

3. Support and advisory services: Does the vendor provide ongoing training, accessible product support, and strategic advisory services to guide your sustainability journey?

4. Intangibles: Does the vendor align with your organization’s working style, demonstrate a commitment to your success, have strong financial performance, have a good reputation with customers, and foster a collaborative long-term partnership?

5. Pricing: How does the pricing model and total cost of ownership stack up against the value provided and long-term success envisioned?

We bring a detailed understanding and breakdown of each of these categories to an assessment to make sure a holistic evaluation takes place.

Phase 3: Implementation and operationalization

With the right vendor selected, Credera often serves as program leaders to facilitate a smooth implementation process, from developing a comprehensive data management strategy to establishing organizational structures and processes for long-term success. Credera crafts tailored implementation and operationalization roadmaps, outlining the required processes to achieve a fully integrated system. Transformation plans, stakeholder engagement, and viability assessments for existing resources work in tandem to harmonize your new software with the rest of your organization and its technologies.

Our technologists can also perform the necessary development work to create integrations that collect data from existing systems, create dedicated platforms to centralize and manage data, develop data pipelines, and test successful ingestion into the chosen vendor.

Lastly, we can help operationalize the new software for effective adoption and long-term data governance. Our change management expertise helps guide the transformation efforts necessary to advance from full integration to full adoption and utilization across the organization.

Proven partnership for sustainability success

Credera’s expertise in creating carbon accounting infrastructure was demonstrated via a recent collaboration with Omnicom, a global corporation with over 1,200 agencies across more than 100 countries. Omnicom engaged Credera to develop a scalable solution to systemically track, quantify, manage, and report carbon emissions for their entire portfolio. Following the three-pronged approach, Credera:

1. Designed and built a centralized environmental data platform (EDP) to connect Omnicom’s internal data systems.

2. Executed a comprehensive best-fit vendor selection process.

3. Drafted a roadmap to operationalize the environmental solution, including software implementation, process design, documentation, people management, and knowledge transfer to enable long-term management of the scalable solution.

This project empowered Omnicom with the tools and data required to continually monitor the impact of their decisions as they work toward their ambitious absolute emissions reduction goal of 46.2% by 2030 against a baseline year of 2019. You can see the latest results in the most recent FY2023 CSR Report.

Check out additional information on related projects.

Why Credera

Leveraging more than three decades of knowledge and expertise in strategy, transformation, data, and technology, Credera has become a trusted partner for global and local organizations alike. With a vendor-neutral perspective, we prioritize arming you with a tailored strategy and technical solution for your unique environmental sustainability needs, such as transforming from manual carbon accounting to an efficient automated solution to gain actionable insights, modernizing your IT infrastructure and solutions to reduce the related carbon footprint, turning ideas into impactful action to reduce emissions, or designing a new product/service (or re-designing an existing one) to support your green strategy.

To learn more about how we can help your organization respond to growing sustainability needs, download our service offering brochure.

Take Action

Ready to embark on your own sustainability journey? Credera's proven approach can guide your organization through every step. Our experts ensure you select the right carbon accounting software, maximize return on investment, and achieve your environmental targets. Contact Credera today to navigate the path toward a sustainable future.

• Sustainability
• Data & Analytics
• Data Integration
• Data Quality
• Data Governance
• Data Collection
• Data Strategy
• Data