Carbon Reporting Readiness: Key Points To Prepare

The question I am asked regularly is, “What do I need to do to prepare for carbon reporting?”.

As a starting point, there are three key areas to focus on which will make the reporting process quicker and less time-consuming.

1. Keep records of fuel volumes (this is for Scope 1 reporting).

Whilst most accounting systems will record the dollar value of fuel purchased, whether bought in bulk or filling up vehicles at the petrol station. The best practice in carbon reporting is for the calculations to be based on litres of fuel.

If your accounting records don’t have the litres purchased, talk to your accounts team and ask them to start recording it.

If you buy fuel in bulk, you need to identify how much fuel is in the tanks at the beginning and end of each financial year to work out the actual fuel consumption as opposed to the fuel purchased.

2. Keep records of volumes of electricity consumption (this is for Scrop 2 reporting)

This is similar to the fuel volumes, but in this case, it’s keeping a recrod of the kWh used throughout the year. This information is readily available on electricity bills but rarely entered into the accounting records.

The recommendation is to talk to your accounts team and ask them to start recording this information in the accounting system or ask them to create and maintain a spreadsheet with the relevant information. The decision on which method may depend on how many electricity accounts your business has.

There is a twist on this if you have an agreement with your energy provider for the supply of renewable energy, or you have an agreement with a solar or wind farm to supply electricity to your business. In these cases, the electricity conssumption from renewable energy needs to be reported separately.

3. Seek carbon reporting information from your key suppliers (this is for Scope 3 reporting).

Whilst the early reporting requirements in Australia under the National Greenhouse and Energy Reporting Scheme required only information referred to as Scope 1 and Scope 2, under the new carbon reporting requirements, companies will be required to determine their carbon footprint relating to all their costs.

Whilst there are generic emisssions factors that can be applied, the more reliable information will come from suppliers as they prepare their carbon reporting data.

Now is the time to reach out to your key suppliers and ask them whether they are preparing for carbon emissions reporting, and if not, enter into a dialoge to help them prepare for the reporting requirements.

In Summary

Now is the time to review your data collection processes to identify how ready your busines is for carbon reporting. The sooner you change your data entry to commence the collection of information require for reporting, the easier the reporting process will be.

It is also a great time to contact us to discuss your options and how we can assist your suppliers with their obligations.

We are proud to advise that this article was written by the team and not produced by AI.