Effective Carbon Accounting Standards: 3 Key Metrics to Track and Improve

As a previous article described, carbon accounting methodically tracks emissions outputs. Its place in logistics has gained traction in the industry, and for good reason: the practice allows businesses in the shipping and logistics industry to conduct effective carbon footprint management. Carbon accounting also allows organizations to respond to regulatory pressure and meet stakeholder expectations for sustainability. 

With more organizations adopting carbon accounting initiatives to track their emissions, developing carbon accounting standards helps to ensure that the right data is being collected. Effective carbon accounting standards ensure the accurate measurement and reporting of emissions and enhance transparency and accountability. 

This article highlights three key metrics companies can track and improve for effective carbon accounting. Using Searoutes’ technological tools can facilitate the adoption of these metrics.

3 Key Carbon Accounting Standards to Track

Searoutes sees three metrics that allow an organization to gauge whether its carbon accounting standards and sustainability initiatives are working.

Key Metric 1: Absolute Emissions of Organization and Logistics (Scope 3 Emissions)

The first metric toward developing an effective carbon accounting standard should include an accurate assessment of the absolute emissions of an organization’s logistics operations to understand the full environmental impact of our emissions output. 

To do this, we must consider all the greenhouse gas emissions produced directly and indirectly by an organization across the entire value chain. This means tracking Scope 1 and Scope 2 emissions, as well as Scope 3 emissions, which are the indirect emissions related to logistics.

To track these emissions, we identify all the emission sources within the organization and the supply chain. To do this, we can utilize carbon accounting tools to measure emissions across Scopes 1, 2, and 3, and we can collaborate with suppliers and logistics partners to gather accurate data.

Once we’ve assessed our performance, we can seek improvement through a number of steps: We can implement emission reduction strategies within internal operations, use our sustainability initiatives to engage with partners and reduce upstream and downstream emissions, and invest in renewable energy and energy-efficient technologies. 

Key Metric 2: Year-on-Year Change of Emissions and Intensities, Total and by Mode

The second metric we should consider is tracking year-on-year changes in emissions and intensities. This means tracking the annual changes in total emissions and emission intensities (emissions per unit of activity) and breaking these changes down by transportation mode (e.g., sea, air, road, rail).

This metric allows businesses to monitor their progress over time, assess the effectiveness of emission reduction efforts, and identify trends.

To implement this metric, businesses should adopt a number of strategies, including establishing a baseline year for comparison, regularly collecting data on emissions and operational activities, and calculating intensity metrics such as emissions per ton-kilometer to enable meaningful comparisons.

Once we’ve collected sufficient data and received feedback from that data, we can take steps toward improvement, such as setting specific and measurable emission reduction targets, optimizing the selection of transportation modes to favor those with lower emissions, and enhancing operational efficiency through route optimization and load consolidation.

Key Metric 3: Year-on-Year Change of Emissions by Initiative (Fuel Switch, Mode Switch, Carrier Switch)

The third metric is tracking the year-on-year change of emissions by sustainability initiative. This means measuring the impact of specific initiatives on emissions reduction over time, focusing on fuel switching, mode switching, and carrier switching. This metric is crucial as it directly links actions to tangible emission reductions, enabling companies to prioritize the most effective strategies.

To track this metric, companies should consider the following strategies: documenting each initiative and its implementation timeline, analyzing emission data before and after the adoption of each initiative, and monitoring the year-on-year changes to evaluate the effectiveness of initiatives.

The results of deploying this metric allow companies to make improvements such as prioritizing initiatives based on their emission reduction potential, continuously evaluating and refining strategies for fuel, mode, and carrier choices, and collaborating with carriers and suppliers committed to sustainability.

Actionable Carbon Accounting: Integrating Carbon Accounting Standards into Operations

In addition to integrating the three metrics we mentioned above into an organization’s carbon accounting regimen, an effective regimen should also incorporate elements enabling accountability.

First, effective carbon accounting standards align with international, relevant standards such as the GHG Protocol and  ISO 14064. This purposeful alignment ensures consistency and comparability in reporting practices.

Second, businesses should recognize the importance of data reporting and transparency in developing carbon accounting standards. Prioritizing transparent disclosure benefits an organization’s relationship with stakeholders and regulatory bodies while utilizing standardized reporting frameworks that allow an organization to communicate progress.

Lastly, an organization’s carbon accounting standards should include continuous improvement as an objective. This might mean setting ongoing targets based on metric performance and regularly reviewing data to identify areas for further improvement.

Take Your Carbon Accounting to the Next Level

Managing carbon footprints has become a strategic priority in today’s logistics and shipping industry. With growing regulatory pressures and heightened stakeholder expectations for sustainability, companies must adopt effective carbon accounting standards to stay competitive and responsible. 

This article highlights three key metrics — absolute emissions (including Scope 3 emissions), year-on-year changes in emissions and intensities by mode, and year-on-year emissions by initiative — that organizations should track and improve. By focusing on these metrics, businesses can ensure accurate emission measurement, enhance transparency, and implement impactful strategies for carbon reduction.

Searoutes is eager to work with organizations to help them advance their sustainability efforts. Our solutions can help businesses achieve emissions reductions effectively and efficiently. Our API tools — our CO2 API to monitor and analyze supply chain emissions, our Routing API to compare the emissions of different routing options, and our Vessel API to assess the emission reduction variations that might come from using different ships — integrate real-time data with historical trends that allow companies to discover new opportunities where emissions reductions can occur.

Contact Searoutes today to learn more about how our solutions can meet your sustainability needs.