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Carbon accounting 101: What is it and why you should do it

In recent years, or even just the last few days, you’ll no doubt have heard companies making big claims to be ‘carbon neutral’, ‘climate positive’ or to become ‘net-zero’ by a certain date. Noble, no doubt, but all a bit arbitrary unless backed by solid evidence. To add foundations to your ambitions, you need carbon accounting…

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The term ‘carbon accounting’ summarises the process of getting said evidence. In other words, quantifying, tracking and reporting the amount of greenhouse gas emissions released into the atmosphere as a result of your business activity. 
In our <a href="https://ecologi.com/articles/blog/charting-the-path-to-net-zero-for-businesses" target="_blank" rel="noopener">Charting the path to net-zero for businesses blog</a> we showed that calculating emissions is a key stage in getting to net-zero. Carbon accounting forms the foundations of these calculations. It helps you understand your starting point,  find the emissions hotspots in your value chain, and pinpoint the biggest opportunities for reduction.

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Carbon footprint assessments can happen at a product or organisational level. At a product level, Product Life Cycle Assessments (or LCAs) evaluate the environmental impact of a product through its entire life cycle, including extraction and processing of raw materials, manufacturing, distribution, product usage, and finally end-of-life.
But for the purpose of this blog, we’ll be exploring organisational carbon footprinting. This means assessing the greenhouse gas emissions of a business’s operating activity through the entire value chain, including upstream suppliers and downstream processes like remote working, product use, disposal and pensions.

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What isn’t measured can’t be managed: The carbon accounting process 

A) The carbon audit 
Conducting a carbon audit lets you allocate responsibility for emissions to the relevant areas of your company and value chain. This will inform decisions on how operations can be decarbonised, and help you to set the right science-based targets. 
B) Target setting 
Target setting determines the level of ambition for your reduction strategy. It opens the door for  carbon accounting to forecast scenarios and strategies to meet these targets. It also allows you to spot the strategies that may appear more sustainable but could actually increase greenhouse gas emissions. For example, swapping to a material with a lower carbon footprint in raw materials, but with increased shipping emissions. *It’s worth noting that this assumes a narrow GHG emissions lens and there may be other environmental credentials unaccounted for in this process but which should be considered. 
C) Emissions reporting 
Carbon accounting isn’t a one-off job. An emissions inventory needs to be taken and reported annually during your journey to net-zero. This is how you’ll measure your performance and impact over time.. 
Emissions reporting is increasingly becoming an industry-standard requirement for many businesses.‍ Under regulations such as the SECR, larger and publicly-listed companies are required to disclose GHG emissions in their directors’ reports. Many investors are also mandating it as a requirement in order to assess liability and risk. High emissions within a difficult to decarbonise scope 3 value chain is considered a liability by some investors. 
By measuring and reporting your footprint, you also acquire supporting evidence for your environmental claims, and reduce the risk of greenwashing accusations. 
To learn more about Carbon Accounting, you can <a href="https://info.ecologi.com/webinar-carbon-accounting-101" target="_blank" rel="noopener">watch Ecologi&#8217;s Carbon Accounting 101 webinar here</a>.
You can measure your footprint and get started on your net-zero journey with <a href="https://ecologi.com/business/zero" target="_blank" rel="noopener">Ecologi Zero</a>, our free carbon footprinting tool for small and medium-sized enterprises.

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98% of SMEs see benefits to setting environmental targets

SMEs (small and medium-sized enterprises) make up 99% of the UK’s business population and contribute half of all business-driven carbon emissions in the UK. The untapped potential for climate action is huge! Even the smallest of actions could make a real difference when taken by thousands of SMEs acting together, whether it&#8217;s measuring emissions or switching to renewable energy.
But knowing where to start on the climate journey can be hard for SMEs, and creating a credible decarbonisation strategy takes time, knowledge, and resources. That’s why we launched our Climate Commitments Survey. 
We gathered insights from 1,000 UK SME owners and decision-makers to understand the challenges, opportunities and barriers they face in their journey to net-zero. The survey was carried out in January 2023 in conjunction with the <a href="https://www.british-business-bank.co.uk/">British Business Bank</a>, who advised on survey design, and research analysis and Market research agency <a href="https://onepoll.com/">OnePoll</a>.
<h3>Read the full report </h3>
<div class="ecologi-video-full-width"><iframe src="https://cms-assets.offset.earth/app/uploads/20230328090053/Ecologi_BBB_Report_V6.pdf" width="960" height="900" frameborder="0" allowfullscreen="allowfullscreen"></iframe></div>
 📁 Download the PDF report <a href="https://cms-assets.offset.earth/app/uploads/20230328090053/Ecologi_BBB_Report_V6.pdf">here</a>

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<h3>SMEs are ready to do their bit for our planet  </h3>
Our survey found that SMEs are committed to doing more to protect the planet, and ready to reap the business benefits of doing so. Of those that had set environmental targets, almost all (98%) had experienced some business benefits. These range from improved brand image (43%), attracting more eco-conscious customers (38%), increased productivity and innovation (37%) and employee loyalty (34%), with over a third (31%) seeing increased revenue. Over three quarters (77%) of business leaders also agreed that having an environmental strategy is good for business.

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<h3>SMEs have some key barriers to overcome on their climate journey </h3>
Despite the commitment to do more, and the acknowledgement that sustainability is good for business, financial constraints (39%), time (27%), and a lack of business return (24%) are the biggest barriers SMEs face in taking climate action. Barriers like these are even harder to overcome during an economic downturn, but reassuringly, despite 25% saying the tough economic conditions are having a negative impact on their environmental commitments, only 3% plan to decrease investment in them.

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<h3>SMEs have the desire to get to get to net-zero, but need a little help</h3>
There is a clear desire to get started on the path to net-zero, and clearly many more SMEs would take action if it was more straightforward and accessible. More than four in 10 (41%) of SMEs said they would like their business to have a net-zero strategy, but feel confused about how to get started. It’s also encouraging to see that 80% of SMEs have either measured their carbon footprint or plan to in the near future, and that 52% would calculate their carbon footprint if it was free and straightforward to do. 
The desire is clearly there. Now we need to make sure SMEs have the tools and support they need to start their net-zero journey, particularly with corporate sustainability commitments coming under increasing scrutiny and tighter regulation around the corner.

<h3>SMEs can lead the sustainable revolution</h3>
While challenges remain, our survey found plenty of reasons to be hopeful. It’s clear to take action on the climate crisis, we need to make sure that every SME, no matter how small, has access to affordable and easy-to-use tools and solutions. From measuring their carbon footprint, to setting targets and reducing emissions, all the way through to funding the best in climate action projects on the planet.
At Ecologi, we’ve designed a suite of products and services, custom-made to help SMEs on their journey to net-zero: 
<a href="https://ecologi.com/business/zero">Ecologi Zero® </a>&#8211; The free and easy-to-use carbon footprinting tool for small and medium sized enterprises.
<a href="https://ecologi.com/business/climate-positive-workforce">Climate Positive Workforce®</a> &#8211; A simple but impactful way to offset your team&#8217;s emissions while funding climate solutions and planting a company forest. 
<a href="https://ecologi.com/business/impact-shop">The Impact Shop</a> &#8211; Browse and fund the very best climate solutions at the click of a button through our pay-as-you-go store for positive climate impact. 
<a href="https://ecologi.com/business/integrations">Ecommerce and integration</a> &#8211; Plant a tree for every sale, product or new team member with our Shopify, Zapier and API integrations.
You can access the full data set <a href="https://docs.google.com/spreadsheets/d/e/2PACX-1vSz3Pl5MG9hBGK4qc71FCE2iIHPF5aBbCERxhhXBDtuYsO7HBOwb51GWg_MlwF41Y7T419JxZpdk6aE/pubhtml" target="_blank" rel="noopener">here</a>

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On the ground in Kenya with Eden Reforestation Projects

Nothing beats seeing our impact in real life. Since June 2021, we’ve been the sole funding partner of a project restoring a vast area of degraded forest in the hills of Western Kenya. It’s one of the largest projects we’ve supported to date, and in September 2022 we were lucky enough to visit the site, meet our tree planting partners from <a href="https://www.edenprojects.org/">Eden Reforestation Projects</a> face to face, and see all that amazing impact for ourselves.
<h3>A trusted partner </h3>
At Ecologi, we only work with reforestation partners who we trust to plant trees responsibly. So you can be sure that the money you contribute to these amazing projects will genuinely make a real difference in restoring forest ecosystems and supporting livelihoods.
We’ve now got <a href="https://ecologi.com/articles/blog/get-to-know-our-reforestation-partners">10 incredible reforestation partners</a>, who operate planting sites across 16 countries. It’s vital to us we partner with like-minded organisations who implement community-led projects that both enhance biodiversity and improve the lives of local people. So our partners go through a rigorous diligence process to check they’re the right fit. Once onboarded, we work closely with our partners to ensure that the projects we implement together are long-lasting and impactful. We cherish our relationships with our reforestation partners &#8211; after all, we couldn’t do this without them!

<h3>Our visit to Kenya </h3>
It’s hard to believe, but our trip to Kenya was the first time we’d visited an international planting site since we were founded in 2019. We wanted to go much sooner, but the complications and restrictions of the COVID-19 pandemic meant that this was the first time we could make the trip safely. Still, better late than never, and the delays meant the team were absolutely raring to go when they set off to visit <a href="https://www.edenprojects.org/">Eden Reforestation Projects</a> in Kenya in September 2022. 
We set out to observe the project and see what was happening on the ground, and in doing so, evaluate its progress and success. It’s important to us we monitor and evaluate all the projects we support, to make sure that we’re funding the biggest impact possible in these beautiful ecosystems.

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KENYA BLOG

To put it simply, we were absolutely blown away by what we saw and experienced. The sheer magnitude of area encompassed by the Kass FM project, which is fully funded by Ecologi, along with the warmth and spirit of the planting and nursery staff upon our arrival, was truly unforgettable.
Having spent so long working remotely, moments like these make it all worthwhile. Over the trip, our team on the ground visited the Kass FM planting site, as well as two nurseries where seedlings for the project are grown &#8211; Nkoben and Tendwet.

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Importantly, we got to meet and engage with local staff members, discussing everything from planting techniques and species variety, to how working for Eden has quite literally changed their lives. Connecting in person allowed us to learn more about their monitoring and evaluation processes too, and ultimately strengthened our relationship with an incredible planting partner.   
But don’t just take our word for it, check out the video below to get a glimpse of the impact our community is funding.
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Where are my trees?

When you fund tree planting through Ecologi, you’re supporting a range of incredible reforestation and ecosystem restoration projects. Ecologi’s method of distributing the donations we receive means the positive impact of our community is being felt all around the world. In this blog we’re going to shed some light on exactly how your money is spread across the projects we support, and why we’ve chosen to do it this way.
First things first, if you fund UK, US, or Australian trees, the projects linked with these trees on your profile are exactly where those trees will be (or, in the case of UK trees, have already been) planted. 
For all the other trees funded by the Ecologi community, we have a slightly different system. Due to the projects we support having varying costs associated with them (depending on geographic location, types of tree planted, price of land etc), we combine trees from all core* projects into one funding pot. When you buy a tree from this pot, you are randomly assigned one of these trees, and this is what appears on your profile.

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Ecologi’s method of distributing trees allows us to fund a range of different types of reforestation and ecosystem restoration projects. The benefits of spreading our funding across all these projects include:
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<li aria-level="1">More affordable prices</li>
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We want everyone to be able to play their part in protecting our planet, regardless of their budget. Ecologi’s system for grouping trees from different projects into one funding pot means we’re able to offer a price per tree that is affordable for everyone. Together, we’re able to fund projects all over the world at a variety of price-points, meaning the positive impact of your money is felt in many more communities than it may otherwise have been. 
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<li aria-level="1">Supporting projects and communities all over the world</li>
</ul>
There are so many wonderful reforestation and ecosystem restoration projects out there that bring unique sets of benefits to local people, biodiversity, and our planet. As a member of the Ecologi community, you are part of the solution for getting vital funding to all the projects that need and deserve it most. From mangrove projects in Madagascar providing important habitat for terrestrial and marine species and protecting communities from coastal flooding, to forest restoration projects in the high Andes providing water security for millions of people and helping to support vulnerable species such as Spectacled Bears and Andean Condors, your money goes a long way, in more ways than one!
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<li aria-level="1">Less risk</li>
</ul>
Supporting a variety of projects means that trees funded by the Ecologi community are at less risk. While every project we fund goes through our rigorous risk assessment process, and we ensure that every necessary action is taken to protect the trees, when you’re working with nature there is always some risk. By spreading the trees we fund across many sites around the world we are helping to minimise the threat of natural hazards. For example, if we were only funding one project and a fire swept through the site, a large proportion of the trees we had funded would likely be damaged or killed. However, by spreading the trees we’re funding across many sites, we’re ensuring that, should such an event occur, it would only impact a small proportion of the trees funded by the Ecologi community.

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We have tried to make the trees in our community members’ profiles representative of the way in which the trees we’re funding are actually distributed around the world. 
While the process of allocating trees to profiles is randomised, trees from certain projects are more likely to be selected and allocated to your profile than others, simply because there are more of them in the pot. This is why you’ll see trees on your profile associated with one of the projects in Madagascar, Mozambique, and Kenya fairly often, but very occasionally you’ll spot one associated with smaller projects such as those in Peru, Morocco, or Senegal for example.
While the trees from different projects do vary in price, they are all planted and nurtured by wonderful organisations with whom we are proud to work. You can learn more about these organisations in our blog post <a href="https://ecologi.com/articles/blog/get-to-know-our-reforestation-partners">here</a>. No matter which trees are randomly assigned to your profile, you can be sure that they are part of fantastic initiatives that have been hand-selected by us for the amazing benefits they are bringing to local people, local wildlife, and our planet. 
So, when it comes to the breakdown of projects at the top of your profile, the numbers show the total number of trees from each project that have been allocated to your profile. When the trees on everyone’s profiles are combined, the number of trees assigned to each project will total the number of trees we, collectively, have actually funded in each project.
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*Our core tree planting projects are where the majority of the trees that we fund are planted, in countries including Madagascar, Mozambique, Kenya, Uganda, Peru, and Morocco. For a full list of our core planting sites and more information about the projects we support, please visit <a href="https://ecologi.com/projects">ecologi.com/projects</a>.

Carbon accounting 101: What is it and why you should do it

What is carbon accounting?

Organisational vs product footprinting

What isn’t measured can’t be managed: The carbon accounting process

More posts

Climate Commitments Survey: 98% of SMEs see benefits to setting environmental targets

On the ground in Kenya with Eden Reforestation Projects

Where are my trees?

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