Climate accounting is becoming increasingly important and comprehensive for companies. The corporate carbon footprint, i.e. the company’s greenhouse gas emissions balance sheet, must now take Scope 1, 2 and 3 into account. To fulfil the increasing requirements of regulators and business partners, companies must continuously improve the quality and completeness of their data. Software solutions offer a viable way to do this, even for SMEs. We will inform you about the background, about digitalisation as the key to resource-saving and professional climate management and we will present you with a suitable and cost-effective solution.
Rising pressure
In our last newsletter, we highlighted and explained the development and importance of climate reporting (Climate Reporting Essentials: Outlook 2025). Rising regulatory requirements and increased pressure from the supply chain mean that the challenges posed by climate reporting are constantly growing.
The topic of climate data and strategies is particularly driven by customer requirements, which make ratings or certifications from private sector initiatives such as EcoVadis, Science Based Targets Initiative (SBTi) or CDP (Carbon Disclosure Project) an important to decisive criterion in supplier selection. This development is not limited to Europe but is taking place globally.
The consequences
The complexity, scope and necessary transparency of the data required for reporting lead to increasing personnel and financial costs. A relevant, accurate, consistent, complete, transparent database that improves year on year is increasingly becoming the only alternative. This is the only way for companies to fulfil the increasing requirements. These include:
- The corporate carbon footprint as a company’s GHG balance sheet must take Scope 1, 2 and 3 into account.
- The availability of a product carbon footprint, i.e. a greenhouse gas balance of specific products, is increasingly becoming the standard.
The opportunities
Solid reduction strategies with concrete targets, measures, timetables and a presentation of the necessary resources have not only become an important management tool for companies. They also form the basis for gaining strategic advantages over the competition.
- To do this, decision-makers must recognise the strategic relevance of the topic and proactively manage the risks and opportunities.
- The professionalisation of climate data management is essential for this, because only high-quality data forms a good basis for far-reaching decisions.
Three solution strategies under the microscope
Greenhouse gas accounting and climate management are increasingly becoming a software issue. According to a report by Fortune Business Insights, the global market for CO2eq accounting software is expected to grow by 23.6 per cent annually, from around USD 15 billion now to USD 100 billion in 2032.
There are three basic approaches that companies take to GHG accounting and climate management.
- (Own) Excel tools and free software applications
Many companies began their journey with (often self-made) Excel tools and recorded their emissions in this way.
- This is still a viable, albeit costly, approach for Scope 1 and 2.
- In view of the increased requirements in Scope 3, however, the complexity is clearly too high. The costs and benefits of mapping in this way are not in a good relationship.
- In addition, there is no access to important databases, most of which are now subject to a charge, but which are essential for a clean Scope 3 balance sheet.
- Free software applications such as GHG’s Scope 3 Evaluator, which expired in August 2023, or efa NRW’s ecocockpit, which still exists, were or are good options for greenhouse gas balancing, but have their limits when it comes to Scope 3 emission categories and emission factors.
- External CO2e-balancers
One alternative, which is used by many companies, is to have the greenhouse gas balance drawn up by external service providers. However, as we have learnt from customers and have also observed ourselves, there are significant disadvantages:
- The company’s own data flows out, but only one figure comes back.
- Assumptions, calculation methods and emission factors, just like the database, are often opaque and incomprehensible – results can therefore not be properly evaluated and interpreted.
- It should also be remembered that complete transparency of the calculation is very important in the event of a legally required audit and must be guaranteed.
- Paid software providers
The market for software providers is extensive and the range on offer is huge. The target group for the solutions is usually large companies that have the financial and human resources to implement and maintain the data in the software. The functions and possibilities of the software are often extremely extensive and the important access to all relevant emission factor databases is usually included in the offer. Goal setting, action planning and reduction simulation are possible, as are compliant reports in accordance with CSRD, GRI, CDP or the addition of other sustainability modules. However, there are also disadvantages.
- For small and medium-sized companies, this solution is usually far too expensive, too extensive and too complex to use.
- The high licence fees are often just the beginning: many companies also require extensive consulting to successfully set up and integrate the software. External help is also required in day-to-day business – for example when uploading, customising or analysing data.
The best alternative
As BP Consultants, we have developed a special climate management consulting package in 2024 that includes a suitable software solution for small and medium-sized companies. The solution is
- reduced to what is necessary,
- intuitive to use,
- compliant with legal and other existing requirements,
- only requires a very low-cost outlay,
- guarantees full transparency and ensures that the data remains in your hands.
Conclusion
Today, professional climate management is a MUST, even for small and medium-sized companies. To ensure that this necessity is not just a burden, but also an asset for the company, you should not only focus on the obligation and the increased requirements for external reporting but also use the climate data for strategic decisions and the future direction of the company. Just as you already do with your company’s key financial figures.
The basis for this is high-quality data and professionalisation in data collection and emissions calculation. If this step is successful, you can not only minimise risks and ensure compliance but also gain decisive advantages over your competitors.
We would gladly accompany you with our expertise on your way to professional climate management and will be happy to provide you with non-binding information about our climate management consulting package and the customised software solution. Get in touch with us!
