Carbon Accounting

Carbon accounting is a technique or a way to monitor carbon emissions, then design a strategy to reduce carbon emissions, noting costs incurred and reported to the company’s stakeholders. The use of carbon accounting has many advantages for a nation, including Indonesia. For businesses, implementing carbon accounting could be a component of corporate social responsibility (CSR) and have a favorable effect on the business. Carbon accounting can encourage Indonesia’s government to work with nations involved in REDD (Reducing Emissions from Deforestation and Forest Degradation) in order to cut greenhouse gas (GHG) emissions. Application of carbon accounting benefits Indonesian society as well. Air pollution will be lessened if businesses utilize carbon accounting to cut carbon emissions! The industry area’s health will also be improved (Dwijayanti, 2011).

A variety of procedures are used in carbon accounting, also known as greenhouse gas (GHG) accounting, to determine how much carbon dioxide and other greenhouse gasses a company or nation emits. Physical and financial carbon accounting are the two main kinds (Sphera’s Editorial Team, 2021).

Physical carbon accounting, also known as a greenhouse gas (GHG) inventory, evaluates direct and indirect GHG emissions (Scopes 1, 2, and 3), taking into account all industrial activities that have an impact on the Earth’s atmosphere. A corporation can set GHG or carbon reduction targets to reduce emissions once it determines how much greenhouse gas it releases and how it affects the climate. They may develop a plan for moving toward a cleaner environment with the use of carbon accounting software and trustworthy industry-based emissions data (Sphera’s Editorial Team, 2021).

The goal of financial carbon accounting is to assign a financial market value to the carbon dioxide and other greenhouse gasses that are produced and absorbed. Accurate reporting of a company’s carbon footprint has become crucial as businesses work to meet net-zero emissions commitments. They will be able to quantify their existing emissions baseline and monitor their progress toward achieving their GHG reduction targets with the use of carbon accounting and the usage of carbon accounting tools (Sphera’s Editorial Team, 2021).

References:
Dwijayanti, S. P. (2011). Manfaat PENERAPAN carbon accounting Di Indonesia | Dwijayanti | Jurnal Akuntansi Kontemporer. Journal Widya Mandala Catholic University Surabaya. https://journal.wima.ac.id/index.php/JAKO/article/view/448
Sphera’s Editorial Team. (2021, December 2). What is carbon accounting? Sphera. https://sphera.com/glossary/what-is-carbon-accounting/