Transactional Carbon Accounting: Financial-Grade Precision Across the Value Chain

Rhea-AI Summary

SAP - Transactional Carbon Accounting: Financial-Grade Precision Across the Value Chain. As businesses focus on reducing carbon emissions, SAP introduces transactional carbon accounting to address the lack of accurate data and connectivity in current carbon accounting processes. This strategy aims to provide precise, transaction-based reporting capabilities, allowing organizations to make business-case decisions fully accounting for financial, operational, and environmental costs and impacts.

NORTHAMPTON, MA / ACCESSWIRE / November 20, 2023 / SAP

As businesses and organizations tackle the reduction of their carbon footprint to achieve net-zero emissions, they are scrutinizing the accuracy and availability of their carbon emissions data, especially for scope 3 emissions. Current carbon accounting processes use a significant amount of estimations and averages due to the lack of consistent calculations and effective data sharing across the value chain. Because of this lack of connectivity, these processes are not connected to other important datasets providing procurement, financial or operational data. With stakeholders, including regulators, investors, and customers increasingly holding executives accountable for their organization's emissions, and their annual audit and disclosure, these outdated processes are no longer fit for purpose. Many leaders are now exploring how to upgrade their carbon accounting capabilities to deliver more accurate data with transparency and precision.

Implementing transactional carbon accounting helps solve these challenges with its three distinct capabilities that must occur in sequential order:

• Recording and managing actual emissions data from operations and across the value chain
• Exchanging standardized data
• Connecting the emissions data with financial and operational data

The result is a transaction-based reporting capability that unlocks the ability to make business-case decisions that fully account for financial, operational, and environmental costs and impacts.

Transactional carbon accounting, or ledger-based carbon accounting, refers to the ability to combine enterprise-wide financial and carbon data down to the transactional level. A transactional carbon ledger is embedded within key financial capabilities enabling the ability to track and quantify the amount of carbon emitted within operations and across the value chain. With a transactional carbon accounting strategy, organizations can transform from top-down, estimated, average factor-based accounting strategy to a bottom-up, measured, precise, transaction-based accounting strategy.

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SOURCE: SAP

View source version on accesswire.com:
https://www.accesswire.com/807341/transactional-carbon-accounting-financial-grade-precision-across-the-value-chain

FAQ

What is transactional carbon accounting?

Transactional carbon accounting refers to the ability to combine enterprise-wide financial and carbon data down to the transactional level, enabling organizations to track and quantify the amount of carbon emitted within operations and across the value chain.

Why is transactional carbon accounting important?

It helps solve challenges related to the lack of accurate data and connectivity in current carbon accounting processes, allowing organizations to make business-case decisions fully accounting for financial, operational, and environmental costs and impacts.

How does transactional carbon accounting work?

It involves recording and managing actual emissions data, exchanging standardized data, and connecting the emissions data with financial and operational data to provide precise, transaction-based reporting capabilities.