The Strategic Role of Carbon Accounting in Today’s Business Landscape

In today’s evolving global economy, businesses are expected not only to remain financially sustainable but also to demonstrate environmental accountability. As climate change accelerates the demand for corporate transparency and responsibility, carbon accounting has become a critical tool in supporting this transition.

Ms. Fauzia Safdar Khan – Senior Director Sustainability and Climate discusses at the platform of Chartered Accountants Worldwide (CAW), that how carbon accounting is evolving from a technical reporting requirement into a strategic business imperative, and emphasizes its growing importance of carbon accounting in helping organizations measure, manage, track, and report greenhouse gas (GHG) emissions across their operations and value chains.

Integrating Carbon Accounting into Business Strategy

She emphasized that integrating carbon accounting into core business operations is no longer optional, it’s a strategic necessity. Meeting stakeholder expectations, complying with emerging sustainability standards, and reducing reputational risk all depend on an organization’s ability to quantify and communicate its climate impact.

More businesses are now calculating their carbon footprint not just to support decarbonization efforts, but also to strengthen brand equity and meet evolving expectations from regulators, investors, and customers.

Two major frameworks are commonly used for carbon accounting: the Greenhouse Gas (GHG) Protocol and the ISO 14064 standard. Of these, the GHG Protocol is more widely adopted due to its practical application across sectors. It provides a structured approach that includes setting organizational boundaries, categorizing emissions into direct and indirect sources, collecting data, and performing calculations.

The discussion also covers the classification of emissions into Scope 1, Scope 2, and Scope 3 categories, underscoring the importance of accounting for both direct and indirect emissions. By converting activity data into standardized values using appropriate emission factors, businesses can ensure consistency and accuracy in their reporting. This method not only supports compliance but also helps identify key emission sources and set actionable reduction targets.

By embedding carbon accounting into governance and operational frameworks, companies can significantly enhance environmental transparency while improving resilience in a rapidly changing regulatory and market landscape.

Watch the session here to understand why integrating carbon accounting into business strategy is no longer optional—it’s essential: