Carbmee's blog on corporate climate action, scope 1, 2, 3, Scope 3.1 emission calculation, and ESG reporting.

Expertise to drive 
sustainable transformation

Knowledge & Insights about carbon footprint managemnt

carbmee recognized in the  2024 Gartner® Market Guide for Carbon Accounting and Management Software Report

Supplier Engagement: Strategies to reduce scope 3 GHG emissions

From Insights to Impact: Navigating Net Zero with Data-Driven Strategies

Cross-functional Collaboration & Software - 2 Factors for CBAM Success

Decarbonization 2024 - A Strategic Outlook

carbmee teams up with The Coca-Cola Company

carbmee recognized in 2023 Gartner Hype Cycle for Environmental Sustainability

carbmee, a leading carbon accounting and management software, is included in 2023 Gartner Hype Cycle Environmental Sustainability in the categories - Scope 3 GHG Emissions Data and Carbon Accounting and Management Software

carbmee recognized in 2023 Gartner® Hype Cycle™ for Environmental Sustainability

Eco design: How to combine technical, economic, and environmental competitiveness?

Berlin-based carbon management software firm cracks the code to seamless CBAM Reporting

Navigating CBAM Compliance with carbmee EIS™

Berlin-based carbmee helps organizations measure, report, and reduce on carbon data across supply chain

A data-driven approach to transactional carbon accounting

In a recent discussion, Prof. Christian Heinrich, Co-Founder and Managing Director at carbmee, shared insights into the company's role in carbon management for complex supply chains.

carbmee: A Trusted Carbon Management Solution Provider for Complex Supply Chains

With the growing urgency of decarbonization, companies are forced to report on their carbon emissions. Traditional Excel sheets and manual carbon accounting tools are no longer sufficient for the complex carbon accounting landscape. The demand for a digitized solution that ensures accurate and reliable emissions disclosure is growing rapidly.

As per the report by Fortune Business Insights, the global carbon accounting software market is projected to reach $64.39 billion by 2030. That being said, currently, there are a lot of carbon accounting software companies offering various solutions for companies to analyze, calculate, measure, and report Greenhouse gas (GHG) emissions. Yet the major challenges like data accuracy, keeping up with new laws and regulations, and faster return on investment remain unsolved by most software providers. 

The overarching goal of the Paris Agreement is to limit global warming to 1.5°C. For this, greenhouse gas emissions must peak before 2025 at the latest and decline by 43% by 2030. Under the enhanced transparency framework (ETF) of the Paris Agreement, starting in 2024, countries will have to report transparently on actions taken in climate change mitigation. Under the Climate Action Programme 2030 and the new Climate Action Act (Klimaschutzgesetz) the German government has made a binding undertaking to reduce greenhouse gas emissions by 55% by 2030. Additionally, with new regulations and laws like the Carbon Border Adjustment Mechanism (CBAM), it has become imperative for companies to seek holistic carbon accounting software and personalized support to navigate through this complex landscape.

To help you know more about CBAM, carbmee has recently published a whitepaper in collaboration with EY.
Click here to download your free copy now.

Companies who invest in audit-grade carbon accounting software are better prepared to collect and manage their data, report their carbon footprints to relevant stakeholders, use accurate data for decarbonization strategies, and net-zero targets, and establish Science-based Targets (SBTi), while managing compliance and supply chain issues.

As we step into 2024, let's explore the top ten carbon accounting software solutions that are reshaping the landscape of environmental responsibility.

1. carbmee
Recognized by Gartner Market Guide for Carbon Accounting Software in 2024 and Gartner Hype Cycle for Environmental Sustainability, 2023, carbmee’s Environmental Intelligence System (carbmee EIS™) leads in two major categories - Scope 3 GHG emissions data and carbon accounting software. With its specialization in Scope 3 and CBAM reporting, carbmee EIS™ platform solves most carbon-related problems offering faster time to value. Besides the TÜV Rheinland, Group PCF certification, carbmee recently achieved WBCD PACT (Partnership for Carbon Transparency) in order to standardize and automate the most prominent industry-related decarbonization challenges.

With a commitment to data accuracy, transparency, and efficiency, carbmee automates carbon footprint calculations across scopes 1, 2, and 3. carbmee’s purpose-built platform for complex supply chains - the Environmental Intelligence System (carbmee EIS™) sets itself apart by bridging the gap between transactional carbon accounting and Life Cycle Assessment (LCA). By combining carbon accounting with Life Cycle Assessment (LCA), carbmee empowers businesses to explore the granularity of carbon footprints linked to each transaction, fostering a detailed understanding of CO2-Footprint Management for Product, Corporate, and Supply Chain level integrated into one single operating system. Furthermore, it specializes in addressing Scope 3 emissions, particularly those stemming from the supply chain, by offering supplier-specific capabilities. This unique feature enables organizations to navigate and effectively manage granular emissions data accurately, helping identify and tackle carbon hotspots within the supply chain.

With carbmee EIS™, enterprises gain the power to make informed decisions and implement impactful reduction strategies.
Book a free demo with carbmee expert today!

2. Persefoni
Persefoni offers a standardized approach, integrating emission factors and collaboration tools.

Persefoni excels in offering a user-friendly interface, making it accessible for businesses of all sizes. Its intuitive design facilitates easy navigation and implementation, providing a straightforward solution for carbon accounting and sustainability management. 

Despite its user-friendly interface, Persefoni may lack some advanced features and Scope 3 competence that larger enterprises with complex sustainability requirements may need for in-depth analysis and reporting.

3. Microsoft Sustainability Cloud
Set to release on June 1, providing ESG capabilities for recording, reporting, and reducing environmental impact.

Microsoft Sustainability Cloud benefits from seamless integration with Microsoft's broader suite of business tools, providing a user-friendly environment. This integration facilitates efficient collaboration and data sharing across various business functions.

The reliance on Microsoft's ecosystem may limit interoperability with other third-party applications, potentially posing challenges for businesses with diverse software environments.

4. Net Zero Cloud by Salesforce
Built on Salesforce's automation and integration features, offering emissions reporting capabilities.

Net Zero Cloud leverages Salesforce's robust platform, enabling businesses to integrate carbon tracking seamlessly into their existing CRM infrastructure. This integration streamlines data management and ensures a more unified approach to sustainability and customer relationship management.

The dependency on the Salesforce platform may pose challenges for businesses using alternative CRM solutions, limiting flexibility and requiring a commitment to the Salesforce ecosystem.

5. IBM Environmental Intelligence Suite
Focused on risk analysis and response efforts, utilizing AI capabilities for climate risk analytics.

IBM's Environmental Intelligence Suite offers extensive data analytics capabilities, providing businesses with powerful insights into their environmental impact. The suite's advanced analytics can support sophisticated modeling and scenario planning for comprehensive sustainability strategies.

The complexity and advanced features of IBM's Environmental Intelligence Suite provide a strong focus on dashboards but may lack carbon footprint automation processes.

6. Sphera
An ESG performance and risk accounting software emphasizing safety and liability reduction.

Sphera is recognized for its broad range of environmental, health, safety, and sustainability solutions. Its integrated approach allows businesses to manage multiple aspects of sustainability, providing a comprehensive solution for organizations with diverse needs.

The extensive features of Sphera provide a strong LCA emission database but have room for improvement regarding carbon footprint calculation and process automation. It might also be of a limited capacity, especially in open modeling, primary data collection, and scalability.

7. Sinai Technologies
Specializing in decarbonization through modeling and planning capabilities.

Sinai Technologies specializes in AI-driven sustainability solutions, leveraging advanced technology for precise carbon footprint assessments. The incorporation of artificial intelligence allows for real-time data analysis and decision-making.

The reliance on AI technology may pose challenges for businesses with limited resources or those less comfortable with advanced technological solutions.

8. Emitwise
Centralized data accounting for carbon emissions across supply chains.

Emitwise is known for its emphasis on real-time emissions tracking and reporting, providing businesses with up-to-date information for timely decision-making. This focus on immediacy can be crucial for organizations looking to respond swiftly to sustainability challenges.

The emphasis on real-time tracking may lead to higher data processing demands and potentially increased costs, particularly for businesses with large and complex operations.

9. Greenly
Focuses on carbon-tracking solutions for SMBs, with limited scalability catering to a European audience.

Greenly distinguishes itself with its simplicity and ease of use. It is designed to be user-friendly and accessible, making it an attractive option for smaller businesses or those just starting their sustainability journey.

The simplicity of Greenly may limit its suitability for larger enterprises with more complex supply chain decarbonization efforts.

10. Sweep
A collaborative carbon emissions accounting tool with a focus on team collaboration.

Sweep is recognized for its intuitive and visually appealing interface, making it easy for users to navigate and engage with sustainability data. The platform's emphasis on user experience enhances accessibility for businesses at various levels of technological proficiency.

While Sweep offers a visually pleasing interface, it may lack some of the advanced features needed by larger enterprises with complex sustainability requirements.

The Top Ten Carbon accounting Software in 2024

While there are a significant number of carbon accounting software in the market, carbmee shines as the top choice for businesses looking to up their carbon tracking game. For businesses serious about sustainability, Scope 3 emissions are a big deal. These emissions come from the supply chain, and carbmee takes the lead by dealing with them in a supplier-specific way. This means businesses can pinpoint and handle supply chain hotspots. carbmee helps businesses make smart choices based on accurate data, reducing their impact on the environment.

Tackling Supply Chain Emissions with Expertise and Perfection

1. A holistic solution
carbmee offers a holistic solution to carbon tracking by integrating Transactional Carbon Accounting and LCA. This unique combination provides businesses with a comprehensive view of their carbon impact. Through Transactional Carbon Accounting, carbmee EIS™ enables detailed insights into the carbon emissions associated with various transactions and activities. LCA further contributes by assessing the environmental impact across the entire life cycle of products, capturing emissions at every stage. This holistic approach equips businesses with a deeper understanding of their environmental footprint, facilitating informed decision-making and fostering sustainable practices across the entire value chain.


2. Supplier-Specific Scope 3
Navigating the complexity of Scope 3 emissions specific to suppliers in industries like Manufacturing or Automotive is a challenging task. The carbmee EIS™ platform tackles this challenge by aiding enterprises in managing Scope 3 emissions at the supplier level. This approach not only boosts environmental sustainability but also promotes transparency across the entire supply chain.

3. Smart Decision-Making
Empowering enterprises to make informed decisions, carbmee facilitates smart choices by leveraging accurate and granular transaction data and gaining insights into suppliers. This capability allows businesses to steer their green initiatives with precision, ensuring they are on the right path toward sustainability.

4. Strong and Strategic Partnerships
carbmee takes pride in its strong connections with global leaders and consultancies like Jaggaer, EY, Deloitte, and KPMG. The aim is to drive complete decarbonization efforts for industrial businesses. carbmee's partnership network focuses on enhancing customers' ability to successfully implement thorough decarbonization strategies.

These partnerships cover both technical and non-technical aspects, such as data support for collection and cleansing, intelligence, consulting, and strategy development for climate transformation, as well as verification and certification of results for external communication. Partners enjoy the advantage of capturing new business opportunities and expanding their service offerings through carbmee's EIS™ suite, eliminating the need for in-house software development.

This collaborative approach allows carbmee to cater to a broader customer base and contribute to global industrial decarbonization by assisting companies with complex supply chains in managing their carbon footprint effectively.

5. Seamless API Integration in Operating Systems 
As a trusted solution provider committed to guiding organizations on their net-zero path and facilitating effective decarbonization strategies, carbmee excels in seamlessly integrating APIs into operating system systems. This includes crucial modules like ERP, Finance, Supplier, and Production Modules. Recognizing the importance of a successful usage experience, carbmee ensures that systems such as SRM, Risk Management, or ERP can be easily integrated, showcasing its capability to streamline and optimize the integration process for enhanced efficiency.

With an aim of becoming a market leader in solving end-to-end sustainability challenges, carbmee already serves some of the industry giants from Automotive, Manufacturing, Chemical, Pharmaceuticals, Med Tech, Hi-tech, Logistics, and FMCG sectors. carbmee EIS™ is already successfully implemented in internationally operating companies like Georg Fischer, Ingersoll-Rand, and Kärcher to name a few.

As regulations evolve and organizations face increasingly strict reduction targets for end-to-end emissions, holistic and reliable carbon accounting software becomes integral to a growth-oriented and data-driven reduction plan. Leading the way in this landscape is carbmee, recognized by Verdantix and Gartner as a leading carbon accounting software for Environmental Sustainability.

Fast-Track Your Sustainability Journey with carbmee EIS™:
Book a free demo with carbmee expert today!

In 2024, the right carbon accounting software is critical in enabling businesses to measure, manage, and mitigate their carbon footprint. With advanced features, accurate data, compliance reporting, and seamless integrations, these top 10 carbon accounting software are instrumental for organizations committed to environmental sustainability.

Top 10 Carbon Accounting Software in 2024

Discover how these top 10 carbon accounting software solutions are helping companies measure, manage, and reduce their carbon footprint. A must-have tool for environmental sustainability.

Die Dekarbonisierung hat einen erheblichen Einfluss auf die Gewinn- und Verlustrechnung und den Unternehmenswert. Durch die Reduzierung von Treibhausgasemissionen und den Übergang zu kohlenstoffarmen Geschäftsmodellen können Unternehmen ihre langfristige Nachhaltigkeit verbessern und die Risiken klimabezogener Verluste verringern. Es entsteht eine neue Managementdisziplin, die die wertorientierte Einbindung der Währung “CO2e” in die Unternehmensstrategie einbindet.

Unlocking Business Value: Decarbonization Insights 2024

Discover the impact of decarbonization on profitability, sustainability, and enterprise value. Insights by Prof. Dr. Christian Heinrich, Co-Founder & Managing Director at carbmee

Navigating CBAM Reporting: Insights from the First Submission and Beyond

Enhancing carbon management and data exchange across global value chains

Demonstrating Sustainability through Verification: Leveraging ISO 14067 for Product Carbon Footprints

Preparing for  CBAM: Strategies and Insights for businesses in the age of carbon pricing

Initiated on July 14th, 2021, CBAM is the world's first carbon border tax, a significant step towards achieving the EU's ambitious goal of net-zero greenhouse gas emissions by 2050. For businesses importing into the EU, CBAM means a paradigm shift in managing carbon emissions – a critical component now extends beyond EU borders.

In simple terms, CBAM is an import tariff linked to the carbon dioxide emitted during the production of specific goods. Starting January 2023, impacted importers must comply with new carbon reporting requirements. By January 2026, carbon import permits will be introduced, directly influenced by the EU's domestic carbon price.

Industries directly impacted include steel, aluminum, cement, electricity, and fertilizers, putting the automotive, construction, and packaging sectors under the spotlight. Chinese and Indian imports, for example, could see substantial price hikes. This is a wake-up call for businesses to evaluate their supply chains and ensure compliance with EU climate standards.

The phased implementation of CBAM provides businesses with time to adapt. Initial taxation will focus on direct emissions, with discussions for the inclusion of more goods and indirect emissions in the second phase starting in 2026. Proactive steps now can prevent businesses from facing substantial costs later.

EU importers must match the corresponding EU carbon price for their goods by purchasing CBAM certificates. These certificates, purchased from the EU country of trade, offset the carbon impact of imported goods. Annual declarations of emissions and corresponding CBAM certificates become mandatory, ensuring transparency and accountability.

CBAM aligns with the EU's Emissions Trading System (ETS), holding companies accountable for exceeding emission caps. For carbon-intensive EU manufacturers, CBAM levels the playing field against competitors without EU green standards, fostering fair competition and driving environmental standards higher.

Many businesses unknowingly contribute to carbon emissions through their supply chains, especially in the elusive scope 3 emissions. The key to CBAM compliance is understanding the full extent of emissions. The Environmental Intelligence System (carbmee EIS™) offers a solution to this challenge.

carbmee specializes in carbon management, offering a purpose-built platform, EIS™, designed for enterprises with complex supply chains. Recognized by Gartner as a Cool Vendor 2022 and featured in the Hype Cycle 2023 for Environmental Sustainability, carbmee EIS™ is the ideal choice for navigating CBAM compliance seamlessly. The platform has been designed to answer CBAM requirements in the easiest and fastest way possible.

Seamless Data Ingestion: Effortlessly data loading from ERP, customs, and eProcurement systems, streamlining the CBAM reporting process.

Optimization Made Easy: Identify and complete missing data with ease, eliminating the need for cumbersome questionnaires.

Precision in Calculation: Adhere to EU Commission guidelines, ensuring accurate and compliant emissions calculation.

Streamlined Reporting: Download quarterly CBAM reports in XML format, ready for submission to the EU.

carbmee EIS™: Your Trusted CBAM Compliance Partner

Andreas Schön, from Kärcher, a global leader in the cleaning technology industry, attests to the game-changing impact of carbmee EIS™. “We are deeply committed to our climate goals, and our approach is to set a realistic yet ambitious carbon reduction target that truly drives action across our entire value chain. carbmee EIS™ has provided us with the tools we need, such as measuring our emissions baseline and gaining transparency beyond our factory gates, to identify the most significant opportunities for reducing our carbon footprint.” Read the full story here. 

As the CBAM compliance journey unfolds, carbmee EIS™ stands as a reliable ally, guiding EU companies through complexities with precision and efficiency. It's not just a solution; it's an informed choice for businesses committed to sustainable trade practices.

In a world where staying competitive means staying compliant, carbmee EIS™ is your trusted partner in the CBAM compliance journey. Choose the future of sustainable trade with carbmee EIS™ and unlock your maximum carbon reduction potential.

carbmee and EY have collaborated on a whitepaper to help companies better understand CBAM's implications for business and how to best comply with the new regulations. Download the free Whitepaper 

In the ever-evolving landscape of global trade, sustainability has taken center stage, and the European Union's Carbon Border Adjustment Mechanism (CBAM) is leading the charge. As Chief Sustainability Officers, Chief Risk Officers, Chief Procurement Officers, and heads of sustainability, it's crucial to understand the implications of CBAM, its urgency, and how it reshapes the rules of international trade.

Mastering CBAM Compliance for Sustainable Trade with carbmee EIS

Navigate the complexities of CBAM compliance and sustainable trade with Carbmee EIS™. Learn how to adapt to the new carbon border tax and stay competitive in the global market.

Sustainable Trade 2.0: How businesses can keep up with CBAM Compliance?

Spend Matters has announced the 2022 roster for their “Future 5” list and this year, carbmee is among the five companies that have proven themselves as potential future trend setters.

Spend Matters recognizes carbmee

Spend Matters has announced the 2022 roster for their “Future 5” list and this year, carbmee is among the five companies that have proven themselves as potential future trendsetters.

Spend Matters recognizes carbmee as a 2022 “Future 5” start-up

Gartner Hype Cycle for Transportation and Smart Mobility

carbmee a carbon management software company focusing on Scope 3 reduction for companies with complex supply chains, included as Sample Vendor in Gartner's Hype Cycle for Transportation and Smart Mobility 2023 report

carbmee recognized in Gartner® Hype Cycle for Transportation and Smart Mobility, 2023 for Carbon Management.

The CSRD marks a watershed moment for corporate sustainability with far-reaching implications for how companies assess their own climate impact, as well as for the future of sustainability reporting in both Europe and globally. Organizations will need to devote significant time and resources to prepare for implementation of the directive within a short timeframe.

We’ve created a quick guide to help industry enterprises understand the most important points of the CSRD and how they can best prepare for it.

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) is an amendment and extension of the current Non Financial Reporting Directive (NFRD), under which large companies, banks and insurance companies with more than 500 employees are required to disclose information on their environmental and social impacts. The European Commission adopted a proposal for a CSRD in April 2021, with the aim of improving the quality of sustainability reporting and increasing transparency on the non-financial performance of companies for external stakeholders.

As the climate crisis has progressed, the EU is increasing its efforts to drive forward its transition to a sustainable economy. The CSRD strengthens the existing rules on non-financial reporting introduced in the Accounting Directive by the 2014 non-financial reporting directive (NFRD). The new regulations under the CSRD will bring important changes regarding scope and reporting requirements.

The scope of companies affected by the regulations will significantly be extended to apply to: 

All large companies, that is companies fulfilling 2 out of the three following criteria:
- Revenues surpassing EUR 40 million per year
- Total assets over EUR 20 million
- More than 250 employees

All companies listed on EU-regulated markets (except listed micro-enterprises)

This nearly quadruples the number of companies required to publish reports on the environmental and social impacts of their operations from 11,700 to about 50,000. 

What are the main differences between the CSRD and the existing NFRD? 

The CSRD will include more comprehensive sustainability reporting requirements and significantly expand the number of EU and non-EU companies subject to the EU sustainability reporting framework. Enterprises will provide detailed environmental and climate change information, but will now also be held accountable for reporting on a wider range of topics such as environmental rights, social rights, human rights, and governance factors.

The CSRD is mandatory for companies that meet in-scope criteria, which include: 

EU companies with over 250 employees and a net turnover of EUR 40 million

Non-EU companies with at least one subsidiary in the EU and a net turnover of more than EUR 150 million

Reporting requirements for the CSRD will be fully phased in before the end of the decade as follows:

reporting in 2025 on the financial year 2024 for companies already subject to the NFRD

reporting in 2026 on the financial year 2025 for large companies that are not currently subject to the NFRD

reporting in 2027 on the financial year 2026 for listed SMEs (except micro undertakings)

reporting in 2029 on the financial year 2028 for third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds.

To comply with the CSRD, companies will need to prepare a non-financial statement that includes information on their sustainability policies, risks, and results. This statement must be auditable by an independent third-party and be included in the company’s annual financial report.The specific content of the statement will vary depending on the size and sector of the company but could include policies and performance details, such as: 

a brief description of the company’s business model, strategy and sustainability risks and opportunities; 

implementation plans as they relate to the transition to a sustainable economy, measures taken to achieve climate neutrality by 2050 ( in line with the Paris Agreement), and exposure to coal, oil and gas-related activities;

double materiality, i.e. both the sustainability matters that affect the company and the impact of the company on the environment, market, and people; 

greenhouse gas emission reduction targets; 

policies in relation to sustainability (including incentive schemes); 

and the processes the undertaking used for due diligence in relation to sustainability issues, as well as the current and future negative effects of the business' operations and value chain.

What information will need to be disclosed?

Companies will need to compile their ESG disclosure information in accordance with the CSRD with guidance from the European Reporting Sustainability Reporting Standards (ESRS). During the drafting process, the ESRS referenced various ESG reporting frameworks and standards, including CDP, GRI, SASB, and others.

The ESRS will incorporate both universal and industry-specific standards, like many other comparable frameworks. The first set of ESRS reporting standards is expected to be adopted by June 30, 2023, and publication of ESRS sector-specific standards is anticipated by June 30, 2024.

Which reporting standard applies to the CSRD?

While the full extent of sanctions is not known, as penalties are defined at a member state’s discretion, organizations found to be in violation of the CSRD can expect serious administrative sanctions, with possible penalties including significant fines.

In the case of NFRD implementation by member states, fines in Portugal ranged from €50 to €1,500, while in Germany companies are fined up to either €10M, 5% of the annual turnover, or twice the amount of the profits gained/losses avoided because of the breach.

Other consequences of CSRD non-compliance could also include damage to brand reputation, a loss of investor and stakeholder confidence, as well as legal action taken by non-governmental organizations.

Will there be penalties or sanctions for not complying with CSRD?

While some details are in development, it is clear that implementing CSRD it will require significant resources, and most crucial for multi-national enterprises, will overlap in scope and diverge in content from region to region. Regardless of size, companies should prepare for CSRD by:

ensuring that key stakeholders across your company are familiar with CSRD sustainability disclosure requirements; 

staying up-to-date on EFRAG announcements and ESRS guidance for CSRD;

assessing how your company identifies and gathers sustainability-related information;

setting targets and KPIs with planned periods to evaluate progress and relevance;

utilizing the right tools to help you quantify and report your relevant sustainability information.

How can your company start preparing for CSRD?

carbmee EIS™ Carbon Management solution can help you to plan for success and prepare for the CSRD. Our platform provides you with everything you need to understand your baseline, set targets for emission reduction, develop transparent benchmarks, and report your progress through:

centralized and automated data collection from your existing ERP system;

industry-specific databases of emission factors that guarantees the highest accuracy;

hotspot-assisted target setting, benchmarking, and gap analysis so you have the best data to create compliant reports;

real-time and impact-oriented insights to help you deliver on targets in good time.

Download our CSRD guide for more information.

To learn more about EIS Carbon Management and what carbmee can do for your company, get in touch with one of our industry experts. 

How carbmee can help your enterprise to report in good time and in compliance?

What is the Corporate Sustainability Reporting Directive? What will it mean for your industry? How can your enterprise prepare for compliant reporting? Check out our quick guide to find out.

Corporate Sustainability Reporting Directive (CSRD):Quick Guide

Corporate Sustainability Reporting Directive (CSRD): A Quick Guide

Streamlined Energy and Carbon Reporting is a regulatory framework designed to help UK businesses meet global energy efficiency standards and greenhouse gas (GHG) emissions. It requires companies to report information on energy usage, carbon emissions, and efforts to improve these areas. It applies to all UK-incorporated quoted companies on stock exchanges, large UK-incorporated companies not quoted on exchanges, and large limited liability partnerships (LLPs). Companies also may elect to participate in SECR voluntarily as a means to improve their energy consumption and carbon footprint.

What Is Streamlined Energy and Carbon Reporting (SECR)?

SECR is intended to encourage businesses to be environmentally responsible. It aims to achieve this by raising companies’ awareness of energy costs, providing them with data they can use to pursue greater energy efficiency, and helping them reduce carbon emissions. With respect to carbon emissions, SECR is aligned with global standards promoting net-zero emissions, where companies’ output of greenhouse gases is balanced by carbon removed from the environment. 

SECR reporting is mandatory for all companies quoted on UK stock exchanges and all companies designed as large. The latter designation currently includes companies meeting at least two of the following criteria:

Annual turnover (or gross income) of at least £36 million

Balance sheet assets of at least £18 million or more

Large companies consuming less than 40,000 kWh of energy in a reporting period are exempt.

Electricity usage, both for powering operations and transportation

Gas consumption for both mobile and stationary activities

Transportation fuel consumption is used for purposes such as fueling company vehicles and minibusses

Emissions intensity ratio, which is a metric measuring emissions from one year to the next

The methodology used to calculate the required information

A narrative explaining steps being taken to improve energy efficiency

Prior year figures for comparison, when applicable

SECR reports are submitted to Companies House. Quoted and unquoted companies should include them in their annual directors’ reports. LLPs should submit an energy and carbon report with their annual reports. Companies, where energy use and carbon emissions are of particular strategic importance should include them in their strategic reports. Charitable organizations should include them in combined directors’ and trustees’ annual reports.

There is no prescribed reporting format. However, all reports should include all required elements, namely:

Annual energy use and greenhouse gas emissions

An emissions intensity ratio, using a metric selected by the company

Methodologies used to calculate the required information

A narrative on how the company is improving energy efficiency

Prior year figures for comparison, if available

Your reporting deadline is based on your company’s financial year and should be aligned with deadlines for your annual reports, as described above.

How the SECR Framework Reporting Process Works

Participating in the SECR framework, whether out of obligation or voluntarily, offers companies a variety of benefits. Some of the most important are:

Enhanced risk management and decision-making: reviewing energy consumption and carbon emission patterns can help companies understand and avoid the impact of risks stemming from wasteful energy usage and climate-based factors

Potential cost savings: monitoring energy consumption can help businesses reduce usage and increase energy efficiency, promoting savings.

Improved transparency and accountability: greater environmental transparency can be attractive to investors and consumers

Of course, if your business is required to file an SECR report, an additional benefit is achieving regulatory compliance and avoiding penalties for non-compliance.

Three Benefits of Participating in the SECR Framework

Failing to comply with SECR reporting regulations can trigger financial penalties. The Conduct Committee of the Financial Reporting Council can levy fines for non-compliance. Additionally, since reports are submitted with your annual reports to Companies House, that agency can reject your application and make you submit it again if you fail to include SECR information. This can trigger late filing penalties from £150 up to £7,500, depending on the size of your company and how late you end up filing.

Consequences for Non-compliance with the SECR Framework

When preparing your SECR filing, you may run into several common challenges:

Gathering accurate and complete data on energy and carbon emissions can be time-consuming and resource-intensive, especially if you don’t have an automated system in place to collect the information.

There may be discrepancies in the methods used to measure and report emissions, leading to inconsistencies in your reported data.

You may encounter difficulties in accurately accounting for emissions from complex supply chains or operations, which you’ll need to know to provide information on indirect emissions from sources you don’t own or control which aren’t energy providers (Scope 3 emissions).

The best way to overcome these challenges is to consult professional advisors and use enterprise-quality carbon management software with Scope 3 tracking capability.

Potential Challenges in Reporting Energy and Carbon Emissions

The SECR framework requires affected UK businesses to report information about energy usage, greenhouse gas emissions, energy efficiency progress, and steps to improve consumption. Staying in compliance with the framework requires access to all relevant data and an accurate methodology for analyzing data.

Using carbon management software, you can automate the process of collecting and analyzing the data you need and preparing your reports. Smart software can also help you identify opportunities to improve energy efficiency and reduce emissions. The carbmee platform is designed to help you achieve SECR compliance by automating your data collection, identifying opportunities for energy optimization, and producing reports to demonstrate your progress over time. We also provide an online knowledge base and answers to FAQs to help you find the necessary information to achieve compliance. Book a free demo to see how our solution can help you and discuss your company’s needs with our industry experts.

Improve Your SECR Compliance With carbmee

Streamlined Energy and Carbon Reporting regulations govern UK companies quoted on stock exchanges and larger non-quoted businesses. What does it mean for your business, and what do you need to do to comply? Check out our quick guide to find out.

SECR Reporting: A Quick Guide

Learn about Streamlined Energy and Carbon Reporting (SECR) regulations in the UK and how to comply with this quick guide. Stay informed

Streamlined Energy and Carbon Reporting (SECR): A Quick Guide

Estimates can vary depending on what’s included, but approximately 51% of global emissions come from the industrial sector. This figure is one that motivates our team of industry, software, and carbon experts everyday to understand the challenges of the world's largest enterprises with some of the most complex supply chains.

While corporate understanding of emissions is still relatively new, both accounting and sustainability professionals have been familiar with LCA and Carbon Accounting for many years. These approaches are both relevant to corporate sustainability but were initially designed for different use cases. Life cycle assessment (LCA) is used to assess the environmental impacts of product systems and decisions, often driven by customer requests or regulatory requirements. Meanwhile, Carbon Accounting measures how much carbon dioxide (and CO2 equivalents) an organization emits and often fulfills requirements for non-financial reporting. This form of accounting was mostly developed in the last two decades with the intent of providing a factual basis for carbon-conscious decision-making. However, it's true efficacy until recently is unclear, given that companies had often based their carbon accounting on speculative upstream and downstream emissions (Scope 3). This means that with inaccurate information – but good optics – carbon accounting has been strongly driven by publicly listed companies for reporting purposes and not for decision-making.

LCA was developed for a highly granular assessment of environmental impacts – which makes for reliable carbon footprint models. These assessments require complex data collection processes, involving a high level of manual entry as well as low level of technical innovation. Traditionally, these models were created externally through specialized consultancies or internally by LCA experts with a background in environmental engineering. Carbon Accounting has a fairly simple data collection process that can consist of information such as energy bills, vehicle mileage, or company facility needs, for example. But as this information doesn’t provide the full scope of a company’s activities or supplied goods, it is not useful when it comes to reduction planning and decision-making (beyond participating in the voluntary carbon market to buy carbon credits which is not ‘ultima’ ratio for energy-intensive industries). This is especially the case for industrial companies that rely on processes like assembly, smelting or those with extensive supply chains. Beyond that, frameworks for carbon accounting are very broad when it comes to database and methodology choices, which has often been exploited by companies that have only felt compelled to do the bare minimum in regards to time and resource allocation. 

If we stand a chance of decoupling economic growth from emissions we need precise data and reliable processes. While addressing Scope 1 and Scope 2 emissions has been the low-hanging fruit for many companies, Scope 3 still needs to be urgently addressed and is now re-emerging as an urgent topic. Fortunately, the U.S. Securities and Exchange Commission, European Commission, and other governing bodies understand the importance of a net-zero future and are now mandating companies to disclose the carbon footprints of their entire value chains, from end-to-end. When it comes to transforming into a net-zero enterprise, companies are finding it challenging to navigate which approaches are best for them to comply with established and new regulations – and understandably find it challenging to understand the current market stance. If that wasn’t complicated enough, there’s also the question of determining whether a Product Carbon Footprint is enough for their reporting and compliance needs, or if what they need is to have a holistic measurement of their entire Corporate Carbon Footprint, but that’s another topic for another day…

Most enterprises face similar obstacles when it comes to their net-zero transformation:

Lack of focus, with little to no clarity on emissions hotspots

Scattered data located across several different ERP and production systems

Managing massive amounts of data, especially in Scope 3 (this includes purchasing transactions, BOMs and supplier data)

Dynamic decision-making supported by forecasting and reduction tracking

Understanding the financial link between carbon optimization and ROI

Execution of SBTI Targets and Net-Zero Strategy

Knowing the ins and outs of this breakdown is crucial to understanding which methodology is right for a company’s decarbonization strategy and it’s also how carbmee supports the world's largest companies to reduce their carbon emissions with one LCA-based, end-to-end carbon management solution, that puts companies in control of their net-zero transformation. 

I’d like to dig a bit deeper into differences within LCA and Carbon Accounting:

Understanding the best carbon reduction approach for industrial enterprises

The spend-based methodology utilizes environmentally extended input-output (EEIO) databases to calculate emission factors for different materials from different regions. These factors are based on spend and have the unit kg COv2e/€. 

The activity-based methodology uses an LCA approach, where emission factors rely on LCI databases and are calculated with the method recommended in the GHG protocol to arrive at global warming potentials for different materials and services. For the activity based approach, ecoinvent models are used as they are, without further changing them. They are chosen based on their best fit to the used materials or services.

The supplier-specific approach works the same way as the activity-based one, but here generic data from the database is replaced by or enriched with primary data from the customer or supplier. This allows to not only calculate emissions more accurately, but also to recommend to-dos to achieve emission reductions. 

Spend-Based Vs. Activity-Based Calculations

A manufacturing OEM is doing a spend-based analysis of their Scope 3 Emissions, based on spend data. They purchased 500 tonnes of Aluminium for their production process on the 2nd of September 2022, from both a Chinese and a European supplier. Each time, they paid a price of 2,300 €/tonne, which amounts to 1,150,000 €.

The resulting footprint is 3,307,895 kg CO2e for the European supplier and 4,431,767 kg CO2e for the Chinese supplier, due to different energy mixes in the regions.



The same company bought the same amount of Aluminium from their European supplier on the 4th of March 2022, and paid a price of 3,516 €/tonne, which amounts to 1,758,000 €.

The resulting footprint is 5,056,764 kg CO2e.


The drawbacks of the spend-based approach are:

a. that these calculations can't be broken down into material, transport, production steps, energy consumption - so ultimately, it's not designed to identify reduction paths or go deep along the entire value-chain.
b. and the inaccuracy that can come from material price fluctuations & negotiation processes, so spend can change dramatically, even though consumption is steady.

A manufacturing OEM is doing an activity-based calculation of their Scope 3 Emissions, based on purchasing transactions (volume + material) and transport method. 500 t of Aluminium are purchased from Europe and China.  

The European material is transported by truck for 500 km, the material from China by ship (22,000 km) and then by truck (300 km). 

The OEM receives a footprint represented by the following graphic, with transport emissions are depicted in orange, and material in turquoise.

Advantages to spend-based calculations include that they:
1. can be broken down into material, transport, production, energy down to tier-n;
2. can differentiate suppliers in different countries, including transport;
3. can be flexibly designed to deep dive with supplier data once a hotspot is identified;
4. and are very accurate and designed to plan reduction initiatives with it.

The emission factor is derived from the ecoinvent database and includes generic assumptions about the production steps and energy sources that are used for the aluminum production, based on local grid mixes. This does not allow for recommending reduction steps to specific suppliers, because their respective production methods are not taken into account.

By getting primary data from the supplier of the material, it becomes possible to identify hotspots in the production and recommend meaningful reduction measures. For the example of aluminum, it can look like this:


It becomes clear that a significant share of the emissions from aluminum are caused by electricity consumption during fabrication – that is creating the raw material aluminum oxide – and direct emissions during physical processing. This gives the supplier three levers to reduce emissions that were previously unknown, such as: switching to renewables, changing the sourcing of the raw material, or capturing emissions where they occur.

Example for Supplier-Specific Calculations

The Best Carbon Reduction Approach for Industrial Enterprises

Decarbonization presents complex challenges for industry companies and the market of solutions, both for software and hardware, is still quite young and sometimes not clearly defined.

Overview

MODULES

INDUSTRY EXAMPLES

Regulations

Expertise to drive
sustainable transformation

Knowledge & Insights

Understanding Scope 3.1 Emissions: A Quick Guide

Corporate Sustainability Reporting Directive (CSRD): A Quick Guide

Carbon Border Adjustment Mechanism (CBAM): A Quick Guide

carbmee recognized in the 2024 Gartner® Market Guide for Carbon Accounting and Management Software Report

Supplier Engagement: Strategies to reduce scope 3 GHG emissions

From Insights to Impact: Navigating Net Zero with Data-Driven Strategies

CBAM Q&A Webinar

Cross-functional Collaboration & Software - 2 Factors for CBAM Success

Decarbonization 2024 - A Strategic Outlook

carbmee teams up with The Coca-Cola Company

carbmee recognized in 2023 Gartner® Hype Cycle™ for Environmental Sustainability

Eco design: How to combine technical, economic, and environmental competitiveness?

Expertise to drive sustainable transformation

Knowledge & Insights

Understanding Scope 3.1 Emissions: A Quick Guide

Corporate Sustainability Reporting Directive (CSRD): A Quick Guide

Carbon Border Adjustment Mechanism (CBAM): A Quick Guide

carbmee recognized in the 2024 Gartner® Market Guide for Carbon Accounting and Management Software Report

Supplier Engagement: Strategies to reduce scope 3 GHG emissions

From Insights to Impact: Navigating Net Zero with Data-Driven Strategies

CBAM Q&A Webinar

Cross-functional Collaboration & Software - 2 Factors for CBAM Success

Decarbonization 2024 - A Strategic Outlook

carbmee teams up with The Coca-Cola Company

carbmee recognized in 2023 Gartner® Hype Cycle™ for Environmental Sustainability

Eco design: How to combine technical, economic, and environmental competitiveness?

Expertise to drive
sustainable transformation