Generalized carbon accounting to measure the impact of goods and services

A number of authors specializing in decarbonization, climate and finance are proposing to take the corporate carbon footprint system a step further, by introducing generalized carbon accounting. This would make it possible to calculate the carbon footprint of every good and service sold, so that customers could establish their own carbon footprint.

Carbon footprints mandatory for companies with more than 500 employees

Over the years, the practice of carbon footprinting has become more widespread among French companies, some of which are required to do so by law. This has been the case since 2016 for companies with over 500 employees, who must renew their carbon footprint every 4 years. Failure to do so can result in a fine of 10,000 euros.

Until now, however, companies were not required to account for all their greenhouse gas emissions when drawing up their GHG balance sheet. These emissions are divided into 3 categories called "scopes": until now, only scopes 1 and 2, which concern emissions internal to the company (heating, machinery, service vehicles, etc.) and indirect emissions linked to energy, had to be included in the GHG balance.

As of January 1, 2023, companies must also include in their carbon footprint external emissions upstream and downstream of production (scope 3), which according to Ademe represent between 50 and 60% of their total emissions.

Towards widespread carbon accounting

But it is possible to go even further, as proposed by the authors of an article published in the daily Les Echos. Katheline Schubert, a member of the French High Council for the Climate, Alain Grandjean, a Carbone 4 associate and economist, Jérôme Cazes, co-creator of "Carbones sur factures", and Emmanuel Millard and François Meunier, two members of the French National Association of Financial Directors and Management Controllers, develop the concept of "generalized carbon accounting" in this article.

Modelled on the way VAT is calculated, this carbon accounting system would involve companies detailing the carbon footprint of each good and service sold on their invoices, alongside the amounts in euros. This system would enable customers, in turn, to accurately establish their carbon footprint, by adding their own emissions.

Some companies are already communicating the carbon footprint of certain products or services to their customers, even if the data is generally not certified and is intended more to enhance their brand image. For example, you can find out the carbon footprint of your meal in certain restaurants, of your Internet use with certain operators, or of your credit card purchases with certain banks.

According to the authors of the article, these initiatives should be generalized and based on certified data. Carbon accounting could be modelled " on corporate accounting in euros ", and extended to as many countries as possible, making it possible to determine the carbon footprint of imported goods.