How do you know what category to select in the carbon ledger?
Carbon bookkeeping common questions
The obvious question: How do I categorise my transaction - what category is ‘right’?
You’re not going to like this answer and neither do we, but in the spirit of transparency, here goes…
Judgement calls in carbon accounting
If you don’t have emissions data from your suppliers, you have to code transactions to an emissions source in the carbon ledger to apply an industry average. It turns $100 on milk to 1 kg of carbon. Read more about the method here.
So you’re looking at the options thinking what one? Essentially, there is no correct answer, you’re making a judgement call based on what you know about the transaction and how it corresponds to the emissions source available.
Those options are based on the databases Sumday uses to provide average emissions factors where suppliers aren’t using Sumday and providing their primary data.
Those databases often use different naming conventions, depending who has developed the dataset. Some of the industry naming systems include ISIC, ANZIC or NAICS. So Sumday has reviewed those names, summarised them and made them available for selection.
Transparency to explain the calculation
When you run the carbon general ledger report, you’ll be able to see what emissions factor database was relied on and the actual number applied based on your selection. You can learn more about each of these databases in the Emission Factors section of the knowledge centre. And soon, you’ll be able to search the full catalogue if you want to go deeper on every potential option before making a selection in the carbon ledger. We’re working hard to make this as transparent yet user friendly as possible and there’s a bunch of features in the pipeline.
If you can't find an emissions source that matches the transaction, we suggest using judgement to select an option that represents the best fit. If there is really nothing that aligns, get in touch with support@sumday.io and the team will share insights, previous examples or public database links to work through the best option with you.
A common problem
Every company in the world that’s carbon accounting relies on industry averages at the moment (we’re on a mission to solve that). So it’s worth noting that every carbon accounting platform on the market pulls from these average sources as well. Often they’re making assumptions on how your transactions should be coded to apply the relevant industry average. Yet all too often they lack the transparency companies now require (most aren’t doing this for the warm and fuzzies anymore, they want it done right to meet compliance requirements, share data with stakeholders and track emission reduction).
If you can’t explain how the numbers came to be, you’re not accounting.
The Sumday difference
There’s a reason top accounting firms use Sumday, we’re the only platform:
- Providing full transparency on the emission factors applied, including the source and specific number so you can explain it to stakeholders or clients and disclose your assumptions and approach.
- Enabling you to export a carbon general ledger report with those details against every single financial transaction and activity based inputs
- Disclosing the approach to CPI and currency conversion for every dataset
- Agreeing with you that yes, it’s a stupid approach (that’s why it’s a last resort under the GHG Protocol) but in the absence of primary data it’s often the best companies can do
We’re making carbon accounting accessible to every business so you don’t have to calculate 90% of a footprint based on industry averages.
We want your carbon ledger to light up with emissions factors provided by your suppliers!
By carbon accounting with Sumday you’re a huge part of the solution to the biggest problem the world has when it comes to tracking progress towards net zero…
It all comes down to the accounting.
Who woulda thought…