The Ins and Outs of Greenhouse Gas Accounting

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Greenhouse gas emissions are a growing concern across the globe as governments pursue ever more stringent ESG standards for businesses across every industry. As the pressure to reduce greenhouse gas emissions grows, many organizations face a difficult challenge: how can they accurately measure their output and create strategies to reduce emissions?

Greenhouse gas accounting is the process of measuring and reporting an organization’s greenhouse gas emissions. The fight against climate change offers a baseline for tracking emissions, reducing impact, and identifying areas for improvement.

Here are some advantages and disadvantages of greenhouse accounting and some considerations for proper accounting


Greenhouse gas accounting helps companies identify opportunities to reduce emissions and improve efficiency. They can develop targeted strategies for reducing their carbon footprint by quantifying emissions from all sources. This can lead to cost savings, improved resource management, and enhanced reputation.

Proper accounting also provides transparency and accountability. Companies report their emissions and reduction efforts to demonstrate a commitment to sustainability and addressing climate change. This accountability builds trust with stakeholders, governments, and the public.


One of the most significant disadvantages is accurately measuring emissions. These gases are emitted from many industries, including some that would never occur to the public. There are direct sources like on-site combustion and indirect sources like purchased electricity and transportation.

Manufacturing companies may generate greenhouse gasses for things like process heat and as a by-product of production. Office buildings may generate them using inefficient windows and doors or inefficient HVAC systems.

Another disadvantage is ensuring consistency and comparability across different organizations and industries. There are many conflicting methods and measurements for greenhouse gas accounting; some are effective, some are contradictory to one another, and some have little to no utility or value.

Beware of Greenwashing

In a rush to avoid public scrutiny or further regulations, many industries have adopted the practice of greenwashing. Greenwashing involves using false or exaggerated claims about the environmental benefits of a product, service, or organization. It can also mean using paper programs to mitigate greenhouse emissions but moving them to another industry where disposal and mitigation cause even greater emissions. Greenwashing undermines the credibility of environmental claims and reduces trust among regulators and customers.

Considerations for Proper Greenhouse Accounting

Several key steps should be taken to properly account for greenhouse gas emissions:

  1. Conduct a Greenhouse Inventory – This involves calculating emissions from all sources, including direct emissions from on-site activities and indirect emissions from purchased electricity and other sources. It requires a frank self-assessment based on accurate data.
  2. Set Reduction Targets – With inventory data, companies can set realistic targets for reducing emissions. The proposed reduction target must not push the carbon footprint elsewhere.
  3. Implement Realistic Reduction Strategies – Once reduction targets have been set, organizations should develop and implement strategies for reducing emissions. Strategies include installing equipment and devices to improve energy efficiency, switching to renewable energy sources, paying for carbon credits, or reducing waste.
  4. Monitor Progress – It’s crucial to track progress towards reduction targets. This allows organizations to identify areas where further action is needed and make adjustments.
  5. Report on Emissions – Organizations should publicly report their greenhouse gas emissions and reduction efforts. This can build trust with stakeholders and demonstrate a commitment to sustainability and climate action.

Accounting for Your Emissions

As an entrepreneur, your time and efforts are often confined to getting your business up and running toward success. But as greenhouse gas emissions move into the spotlight, it’s critical to understand how to reduce emissions effectively. Doing so will improve brand reputation and prevent fines or other costly “after the fact” mitigation requirements.

The Henry Bernick Entrepreneurship Centre (HBEC) at Georgian College has extensive research, innovation, entrepreneurship, and mentorship expertise. Our staff and faculty can help you acquire the skills to build sustainability and emission accountability into your skillset.

Contact us today to learn more.

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