Corporate Carbon Accounting: A Strategic Step Toward Low-Carbon Business Transformation
In the global push toward carbon neutrality, Corporate Carbon Accounting is emerging as a foundational practice for businesses aiming to align with climate goals and comply with regulatory expectations. Consequently, as more jurisdictions implement carbon markets and new carbon disclosure requirements take effect, understanding and managing greenhouse gas (GHG) emissions has become an essential step for enterprises worldwide.
What Is Corporate Carbon Accounting?
Corporate Carbon Accounting refers to quantifying an organization’s greenhouse gas emissions, both direct and indirect, within a defined operational boundary. Emissions are measured in carbon dioxide equivalents (CO2e) and reported according to international or national guidelines. This process enables organizations to assess their carbon footprint, develop reduction strategies, and communicate climate performance transparently.
Who Needs to Conduct Carbon Accounting?
Enterprises Subject to China’s National Emissions Trading Scheme (ETS)
Under the Provisional Administrative Rules on Carbon Emission Trading (State Council Decree No. 775), key emitters are required to accurately calculate and report their annual GHG emissions, which adhere to the technical guidelines issued by the Ministry of Ecology and Environment (MEE), and administrative penalties may be imposed for non-compliance.
Companies Covered by Regional ETS Programs
In addition to the national carbon market, China’s pilot carbon markets in places such as Beijing, Shanghai, Guangdong, and Hubei enforce their own unique rules.. Each region not only mandates emission accounting and reporting requirements for designated sectors but also outlines penalties for violations. Annually, local environmental bureaus publish lists of regulated entities.
Voluntary Participants Driven by Supply Chain or ESG Goals
Many companies, even those not under current carbon trading regulations, are now voluntarily monitoring their emissions. This is largely due to pressure from multinational buyers and investors who seek greater climate transparency across supply chains and from broader ESG goals. As a result, more enterprises are implementing carbon accounting to meet customer demands, improve ESG reporting, and anticipate future regulations.
What Standards Are Used?
A variety of international and domestic standards guide carbon accounting practices:
Global Standards
- GHG Protocol
Corporate Accounting and Reporting Standard
Provides principles and requirements for organizational-level GHG quantification and reporting.
Chinese National Standards
- MEE Sectoral Guidelines
For industries like power generation, cement, aluminum, and steel, the MEE publishes detailed methodologies for how to account for and report their emissions. - NDRC Guidelines
Companies in sectors such as petrochemical, chemical, and other industrial areas still refer previous guidelines issued by the National Development and Reform Commission (NDRC) - Local Guidelines
Cities like Shanghai have released sector-specific methods for the chemical, textile, and energy industries.
How Do Companies Implement Carbon Accounting?
Key Emission Units
Enterprises included in the national or pilot carbon market management system are required to calculate their greenhouse gas (GHG) emissions, prepare GHG emission reports, and submit them to the competent authorities in accordance with the technical specifications for corporate GHG accounting and reporting issued by the national or local government.
Non-Key Emission Units
Enterprises that carry out emission reduction efforts due to supply chain requirements or their own green and low-carbon transition goals may calculate their GHG emissions based on relevant domestic or international standards according to actual needs, which helps them identify energy-saving and emission-reduction potential, meet low-carbon supply chain requirements, and enhance their brand influence.
Our Services
To help businesses streamline carbon accounting and compliance, we offer:
- GHG inventory and emissions reporting preparation
- On-site carbon accounting training and consulting
- Emission calculation and reduction potential analysis
- Assistance with third-party carbon verification and audit coordination
For more information or service inquiries, please feel free to contact us at customer@reach24h.com.
Why Carbon Accounting Matters?
Conducting carbon accounting brings tangible benefits:
- Data-Driven Decision Making: Understand emission sources and identify high-impact reduction areas.
- Competitive Advantage: Enhance climate transparency, support green brand positioning, and meet customer or investor sustainability criteria.
- Regulatory Readiness: Stay ahead of compliance obligations in emerging carbon markets and ESG disclosure frameworks.
