Although spreadsheets are widely used for carbon accounting due to their low cost, customisability, and convenience, they have always been fundamentally unsuitable. Most companies start by managing their carbon footprints with these familiar tools, only to quickly realise their significant limitations. As environmental responsibility becomes more pressing, the need for specialised tools becomes more acute.
At Plan A, we have supported hundreds of companies that initially used spreadsheets for carbon accounting but faced numerous challenges that impeded their sustainability goals. This article will explore the 11 main issues these companies have encountered, illustrating why adopting dedicated carbon accounting software is beneficial and essential for modern businesses aiming to manage their emissions effectively.
First, why should your company manage its emissions?
Responsibility as a business to act sustainably
Companies have a moral and ethical duty to minimise their environmental impact. By calculating and managing emissions, they demonstrate a commitment to sustainable practices, which is increasingly important given the environmental challenges facing the world today. This responsibility is towards the environment and stakeholders affected by the company's operations and decisions.
Meeting new requirements of stakeholders
Investors, employees, business partners, and customers increasingly demand transparency and responsibility regarding environmental impacts. Companies proactively managing their emissions are more likely to attract and retain investors, focusing more on sustainable and responsible investments. Similarly, employees are increasingly looking to work for environmentally conscious companies, and customers are more loyal to brands that demonstrate genuine commitment to sustainability.
Regulatory compliance in ESG
Various jurisdictions are implementing stricter regulations on environmental, social, and governance (ESG) reporting. For instance, the European Union's Corporate Sustainability Reporting Directive (CSRD) mandates more detailed reporting on sustainability matters, including emissions. Managing and reporting emissions accurately becomes a matter of compliance and a strategic advantage in regulatory environments.
Enabling the capacity to decarbonise
Accurately measuring emissions is the first step towards effectively reducing them. It allows companies to identify critical areas of high emissions, set realistic reduction targets, and implement strategies to achieve these targets. This process is essential for any serious commitment to sustainability and can lead to cost savings, efficiency improvements, and innovation.
These factors highlight why companies must calculate and actively reduce their corporate carbon footprint. Let’s dive deeper into the “how” and look into the solutions that can enable sustainability teams to manage emissions. We will first explore why spreadsheets are not scalable, then highlight the benefits of carbon accounting software.
11 reasons why spreadsheets should be avoided for carbon management
Companies can easily be tempted to start using spreadsheets for carbon accounting as they are cheap, customisable, and convenient, as they are tools that teams already use. 86% of companies still manage their carbon footprint with such tools. These businesses will, however, quickly start to face issues and blockers. At Plan A, we have supported hundreds of companies who initially attempted to do carbon accounting with spreadsheets and have compiled the 11 main problems they have faced here.
1. Data collection and import will take a lot of time
Carbon accounting requires importing and consolidating many data points from multiple sources across your company. Here are some examples of data you will need to collect:
- Business travel: means of transportation, distance, fuel type, economy or business class for flights, etc.
- Electricity consumption of your different offices, factories
- Employee commuting habits
- Purchases: Type, amount
- Equipment subject to emitting “fugitive emissions”
The data you gather at the collection stage will later be used to calculate the company’s emissions once associated with the correct emission factors. We will cover that topic in the next paragraph.
Depending on the complexity of your organisation, you might have to pull this data from different systems for different countries, and you might end up with multiple files that don’t have the same format.
It will be tough technically to adapt your spreadsheet tool to import these data points into one place, and you will repeatedly have to spend time manipulating these files and data every time you want to calculate emissions for another period.
Automating the data collection process would be extremely difficult and require advanced technical skills to consider and implement.
2. You will struggle to manage and update quality emission factors.
Carbon emission factors are vital in calculating emissions. Thanks to a conversion operation, once the company's activity data has been collected, emission factors are used to calculate the emissions.
Let’s define the concept of CO2 equivalent before proceeding with the explanation. In the context of carbon accounting, "CO2 equivalent" is commonly denoted as "CO2e," which stands for carbon dioxide equivalent. This metric describes different greenhouse gases in a standard unit, reflecting the amount of CO2 that would have the same global warming potential.
Let’s consider that a litre of fuel emits 2 kg of CO2e in the atmosphere. 2 would be the emission factor for fuel consumption, and “kg CO2e per litre” would be its unit.
Credit: Plan A
You understand that accurate emission factors (EFs) are critical for rigorous carbon accounting, as they directly impact calculations.
Multiple ways and sources exist to get these emission factors and use them for your company’s carbon accounting. Some countries, like France, which has the Base Empreinte®, have an open data approach, which makes their access more accessible. For some other countries or if you need particular emission factors, you may have to compile many sources to get all the emission factors you want to use. Some aspects can be found in research papers; others are part of data sets you must purchase.
Finding these emission factors, updating them every year as they change, and compiling them to integrate them into your carbon accounting workflows is time-consuming and doesn't add direct value to your company's sustainability strategy.
Ideally, you would use one tool that provides comprehensive, accurate and up-to-date EFs to run your carbon accounting smoothly.
3. The complexity of carbon accounting will slow you down
Navigating your company's complex structure can be challenging when calculating its carbon footprint using a spreadsheet. Consider breaking down emissions by entities, facilities, or teams before consolidating the data for a company-wide overview. This detailed segmentation is vital for analysing your emission profile, identifying critical areas, and focusing efforts. Without this approach, you might overlook significant sources, like a team responsible for most business travel emissions. Identifying such specifics can simplify targeted reductions, such as adjusting travel policies for that team.
This difficulty in adapting your tool to your company’s specific structure might also challenge you regarding the emission factors you use in the calculation part. If your company operates in different countries, the required emission factors are usually different (e.g. different energy mixes are one of the causes), and this would be technically difficult to implement in your spreadsheet, add a layer of complexity, and increase risks of errors.
Let's look more closely at this process within a specific emissions category. We notice difficulties related to the nature of the data you have for your company. Take the case of a company with several international offices: it is possible that the collected data do not use the same units, for example, with expenses in euros or dollars or vehicle fleet usage in kilometres or litres of fuel consumed. Successfully handling these cases requires a tool that allows easy detection and application of the appropriate carbon accounting method, which will be challenging to build on your spreadsheet.
4. Spreadsheets are complex to maintain
When creating spreadsheets, we often need to document our approach in detail, especially with complex tools. Most parameters hidden in formulas are only visible when selected, complicating maintenance and subsequent modifications, even by the original author.
Thus, modifying or updating methodologies requires revisiting numerous formulas scattered across several columns and tabs. This task is prone to errors and can affect the reliability of your spreadsheet.
5. The necessary regularity of exercise will be a challenge for you
Carbon accounting is a repetitive and iterative process that requires regular updates, such as annual or quarterly. It is crucial that the spreadsheet used can not only incorporate new data each period but also retain the results from previous years.
Often, spreadsheets configured for this task are only suitable for one calculation at a time and do not store data long-term. This requires resetting and erasing previous data at each new calculation session, complicating the detailed comparison of carbon balances from one year to the next.
6. This would require the create many modules within one tool
From the beginning of this article, we understand that carbon accounting is a complex process involving several stages, such as data collection, calculation, analysis, and reporting. But it doesn't stop there. Indeed, the main goal of calculating a company's emissions is to reduce them effectively.
Thus, a carbon accounting tool must equip companies to manage their decarbonisation by enabling data-based analysis and decision-making. This tool should allow data reuse from one stage to another for integrated and efficient carbon accounting management.
7. It would require very advanced carbon accounting knowledge
After collecting all the necessary activity data to calculate your company's emissions, it is essential that your internal tool can correctly map each type of emission with the appropriate category and scope according to the GHG protocol.
This task can become highly complex and time-consuming, especially for a company that manages a lot of data from various sources. Scope 3 includes emissions related to the company's value chain and comprises 15 emission categories.
Credit: Plan A
Therefore, it is crucial to accurately categorise each emission source to report your emissions compliantly and effectively work on improving your carbon footprint by reducing these emissions.
8. The interface would not be adapted and would not be user-friendly
Although applicable, spreadsheets are not known for their interfaces, and navigation is often complicated and tedious. The interface used to build the spreadsheet is the same as that used for analysis, leading to the constant display of unnecessary parameters that only burden the user experience.
When developing a complex tool, many tabs and thousands of rows are expected, making navigation difficult and tedious. These tools are built on tables, and although it is possible to overlay text and images, there are no practical options to display additional information, such as a popup info box that opens to provide context on a particular element.
Credit: Bilan Carbone®
However, as we saw earlier, for successful carbon accounting, it is essential to manipulate, analyse, and interpret data to identify and implement concrete actions within the company. Current spreadsheet setups need the ergonomic features necessary to efficiently manage a company's CO2 emissions, rendering them unsuitable.
9. It will be difficult to collaborate with stakeholders
While spreadsheets offer collaboration features, they could be better for working effectively with other stakeholders.
Onboarding new people to a complex spreadsheet often proves difficult, as it contains specific elements created ad hoc, which are only sometimes understandable to some.
Moreover, these tools offer limited options for managing user roles and permissions, making collaboration difficult and restricted.
10. You might struggle to get the quality of your tool certified
Some companies manage to get their internal carbon accounting tools certified for quality, but it is a complex process. Verifying all the formulas, often not readily accessible, represents a significant challenge, as previously seen.
Furthermore, managing emission factors is complex, and certification processes typically include verification of these factors. Therefore, it is difficult for all companies to get their carbon accounting software certified according to industry standards.
While it is recommended that tools whose quality and data management have been verified and certified be used, spreadsheets take time to meet this criterion.
11. You would spend more time building the tool than managing your company's emissions
Building an internal carbon accounting tool with a spreadsheet is technically feasible, but this could lead teams to spend more time creating the tool than effectively managing the company's CO2 emissions, which should be the priority.
Sustainability teams should minimise time spent on non-value-added tasks, such as searching for emission factors or processing data, to focus on high-value tasks like detailed emissions analysis to identify actionable levers they can implement to make an impact.
In addition to carbon accounting, sustainability teams have other critical missions, such as educating stakeholders and representing the sustainability strategy. This justifies the need to be equipped with a dedicated carbon accounting tool, thus avoiding the need to build and maintain one, which would be costly in terms of time.
The benefits of carbon accounting software
As an alternative to using or creating a spreadsheet, there are dedicated carbon accounting software solutions that offer numerous advantages and enable sustainability-leading companies to develop and implement ambitious decarbonisation strategies.
- Facilitated data collection: Carbon accounting software provides templates for importing data and the capacity to ingest millions of rows. It can also connect with existing tools via APIs, allowing data to flow automatically and minimising human errors in data input and manipulation.
- Automatic mapping to emission categories: These tools recognise different types of emissions and can accurately map them to the appropriate emission scopes and categories as defined by the GHG Protocol.
- Integration of emission factors databases: The software includes comprehensive sets of emission factors databases regularly updated and enriched by dedicated teams. Leading providers offer emission factors for dozens of countries worldwide, allowing companies to input their emission factors if necessary.
- Certified calculation methodologies: Software like Plan A, certified by TUV Rheinland for its compliance with the GHG Protocol, ensures the quality of the outcomes, helping companies stay compliant when reporting emissions and providing reliable data for analysis.
- Advanced reporting and dashboards: Carbon accounting software features dashboards to analyse emissions across different scopes and categories of users to create tailored reports. These tools can adapt to a company's complexities, including managing multiple entities or departments across various countries.
- Quickly exportable outcomes for reporting: Users can export the results of emissions calculations for disclosure in sustainability reports or regulatory ESG reporting, such as under the CSRD framework.
- Target setting and emission forecasting: The software supports strategic planning by allowing companies to set emissions reduction targets using frameworks like the Science Based Targets initiative.
- Actionable insights for emission reduction: Provides detailed action plans based on a company’s specific emission profile, offering data-driven insights into the potential impact of each action, which aids in practical decarbonisation efforts.
Credit: Plan A
To highlight further advantages of partnering with a carbon accounting software provider:
- Expert support: Access expert teams that offer support tailored to your needs, recognising that every net-zero journey is unique.
- Educational content: The software integrates educational materials to enhance users’ knowledge and expertise about carbon management directly within the tool and includes specific sessions for customers, such as webinars and private community events.
- Stakeholder engagement: Expert support teams also assist with stakeholder engagement, such as presenting your sustainability strategy to the board or helping with supplier engagement strategies.
Contact the Plan A team if you want to avoid these mistakes and equip your team with best-in-class carbon accounting software. Our experts are ready to discuss how your company can lead in sustainability and drive ambitious decarbonisation strategies.
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