How carbon accounting software can transform logistics management

As global awareness of climate change and environmental sustainability grows, businesses face increasing pressure to manage and accurately report their carbon emissions. For logistics managers at companies with complex supply chains, this task can be particularly daunting. 

The intricate web of suppliers and logistics service providers (LSPs) means collecting, organising and reporting supply chain carbon emissions data is time-consuming and resource-intensive. However, there are ways logistics managers can overcome these complexities. Advancements in carbon accounting software offer solutions that streamline carbon reporting, providing better visibility and actionable insights while significantly reducing the workload and costs involved.

This article explores how carbon accounting software enables logistics managers to reduce their workload, save time and money and optimise the carbon accounting process for more actionable insights.

What is carbon accounting?

Carbon accounting is the process of measuring, tracking and reporting the amount of carbon emissions and other greenhouse gases (GHGs) that a company emits into the atmosphere. For many businesses, it’s an important process that helps them to understand their environmental impact and identify opportunities for reducing their carbon footprint. In the context of a business’s supply chain, carbon accounting involves tracking emissions across various activities, including manufacturing, transportation and logistics, as well as from suppliers and third-party service providers.

Carbon accounting can be thought of as the environmental equivalent of financial accounting. Just as financial accounting tracks income and expenses to assess a company’s financial health, carbon accounting tracks emissions to evaluate its environmental impact. For logistics managers, this process is particularly important because it enables them to quantify the carbon emissions associated with the movement of goods. This not only helps businesses meet regulatory requirements but also supports strategic decision-making aimed at reducing overall emissions.

The challenge of scope 3 carbon reporting in logistics

Scope 3 carbon emissions are indirect emissions that occur in a company's value chain, including those from suppliers and third-party logistics providers. These emissions are often the most significant part of a company's carbon footprint. They are also the most challenging to measure and manage due to the complexity and variability of supply chains as well as the data required to measure them.

Logistics managers find themselves faced with the formidable task of gathering data from numerous suppliers, each using different reporting standards and formats. This process can take weeks or even months, using valuable resources that could otherwise be used for more strategic activities. Without a standardised method for collecting and analysing scope 3 emissions data, it can be difficult — actually, virtually impossible — to gain a clear understanding of where and how to make meaningful carbon reductions.

What is carbon accounting software?

Carbon accounting software is designed to help companies manage and streamline their carbon accounting processes — similar to how financial accounting software aids in financial management. This software automates the collection, calculation and reporting of carbon emissions data, offering businesses a clear, transparent and accurate view of their environmental impact. It’s an important tool for companies aiming to develop and implement decarbonisation strategies by simplifying the tracking and reporting of emissions across supply chains with multiple vendors.

How carbon accounting software can help logistics managers tackle scope 3 emissions

The benefits of using carbon accounting software are broad and most businesses will benefit from using it once mandatory carbon reporting becomes more widespread. Here are several ways this technology can benefit logistics managers and their businesses:

1. Centralised data collection

One of the primary advantages of carbon accounting software is the ability to centralise all communications with suppliers regarding carbon emissions data. Instead of manually requesting and compiling data from each supplier using one-to-one emails — which often leads to missed information and mistakes — logistics managers can use specialised carbon accounting software to automate these processes across all their logistics suppliers. Suppliers can upload their data directly into the system, significantly reducing the time and effort required to gather the necessary information.

Without a solution to help this process, gathering this data can be a real challenge for logistics managers and their teams. Often, data is spread across multiple tools, owners, geographies and formats, and is typically stored in various file types. Carbon accounting tools also help overcome these complexities by providing flexible data input types and automation through API connections. Overall, this streamlines the process for logistics managers and their teams, enabling them to save significant time and resources.

2. Improved data quality and transparency

Features like a Data Quality Indicator (DQI), which ensures that all data collected is standardised and comparable, can help logistics managers manage the quality of data they receive from each supplier. A DQI enables logistics managers to compare "apples to apples," creating a level playing field for all suppliers and ensuring the data they receive meets their business’s required carbon emissions reporting standards. This standardisation is crucial for accurate reporting (both mandatory and voluntary) and analysis, enabling logistics managers to identify carbon-intensive hotspots within the supply chain and target them for reduction.

The inclusion of a DQI during the reporting process is also a key requirement of the ISO 14083 standard for the quantification and reporting of greenhouse gas emissions arising from transport chain operations. For logistics managers, carbon reporting that meets ISO 14083 reporting criteria should be a standard requirement.  

3. Actionable insights

By providing a comprehensive view of carbon emissions across the entire supply chain, carbon accounting software enables logistics managers to identify trends, patterns and areas for improvement. Advanced analytics tools can highlight the most significant sources of emissions, allowing managers to prioritise reduction efforts effectively. These actionable insights can lead to more informed decision-making and a more strategic allocation of resources, ultimately resulting in better carbon footprint reduction at lower costs.

4. Enhanced agility in carbon reduction

The ability to quickly and accurately generate regular and more granular reports is another significant benefit of carbon accounting software. Instead of spending weeks compiling data, logistics managers can produce detailed reports at the touch of a button. This agility allows businesses to respond more rapidly to new regulations, market demands or internal sustainability goals. It also enables continuous monitoring and adjustment of carbon reduction strategies, ensuring that efforts remain agile and aligned with overall business objectives.

5. Resource optimisation

By streamlining carbon reporting processes, logistics managers can free up resources that would otherwise be spent on data collection and formatting. These resources can then be redirected towards more strategic initiatives, such as developing and implementing carbon reduction plans, engaging with suppliers to improve their own sustainability practices or exploring innovative logistics solutions that minimise environmental impact.

Carbon accounting software will become an integral part of your business

For logistics managers at businesses with complex supply chains, managing and reporting scope 3 carbon emissions is a significant challenge. However, carbon accounting software offers a powerful solution that can streamline these processes, providing better visibility and actionable insights while reducing the time, effort and costs involved.

As carbon accounting becomes a standard business process — much like financial management — this type of software solution will become integral. By centralising data collection, standardising reporting, improving data accuracy and transparency, and increasing strategic agility, carbon accounting software allows logistics managers to focus on initiatives that drive meaningful carbon reductions.

By investing in carbon accounting software technology, logistics managers can transform their carbon reporting processes, uncover valuable insights and increase their company’s competitive advantage.

Transform your business with carbon accounting software from Pledge

Ready to streamline your carbon reporting and stay ahead of the curve? Sign up for the Pledge Shipper Beta program today and put your data collection on auto-pilot. Be among the first to experience high-quality, assurance-ready results and transform your logistics management with ease. Join now and start making informed, impactful sustainability decisions for your business!