Curious about the environmental impact of your tourism business? Heard about "carbon accounting" but unsure where to start? Let's demystify this process and delve into what needs to be accounted for within your Scope 1, Scope 2, and Scope 3 emissions for your business.
Understanding Carbon Accounting
Carbon accounting involves calculating the greenhouse gas emissions produced during your business operations. It's a systematic method to measure your business's carbon footprint, categorised into Scope 1 (direct emissions), Scope 2 (indirect emissions), and Scope 3 (indirect supply chain emissions). The result? A key metric: kg of Carbon Dioxide equivalent (CO2-e) per dollar of revenue. This provides internal insights and empowers informed decision-making, steering away from industry averages.
Understanding a Cradle to Gate Assessment A cradle-to-gate assessment is a partial evaluation of the product life cycle, focusing on emissions from resource extraction (cradle) to the gates of the business facility (gate). This form of assessment excludes downstream emissions related to the product, such as downstream transportation & distribution, processing & use of the product, leased assets, and end-of-life treatment. If you consider the downstream aspect of your business as an important component, a cradle-to-grave assessment can be conducted on a need's basis.
What does this look like for tourism businesses? Let's explore the cradle-to-gate approach through the lens of Sleepy Possum, a charming bed and breakfast nestled in the heart of Tasmania, to illustrate the concept of Scope 1, Scope 2, and Scope 3 emissions in practical terms.
Scope 1- Direct Emissions: In the realm of direct emissions (Scope 1), Sleepy Possum focuses on elements within its immediate control. The business vehicle employed by the inn plays a significant role, contributing to Scope 1 emissions through fuel combustion. Additionally, the air conditioning units, essential for guest comfort, emit refrigerants, presenting another facet of direct emissions. These aspects fall squarely within the inn's operational purview, allowing for a targeted approach to mitigate their impact.
Scope 2 - Indirect Emissions: Moving on to indirect emissions (Scope 2), Sleepy Possum addresses factors that stem from activities not directly owned or controlled by the business. A prime example is the locally purchased electricity utilised for powering lights and equipment throughout the inn. While the inn may not have direct influence over the electricity generation process, it acknowledges and accounts for the associated emissions.
Scope 3 - Supply Chain Emissions: Scope 3 emissions extend beyond the inn's immediate operations, delving into various facets of the supply chain. Sleepy Possum considers and evaluates indirect supply chain emissions that include the transportation of goods, waste generation, business travel and purchased goods and services. These elements, though extending beyond direct control, are integral to the broader environmental impact of the business.
What’s needed to start your carbon accounting journey? Initiating your carbon accounting journey is simpler than you think. The key lies in providing straightforward data, much of which is likely already accessible through your accounting software such as Xero, MYOB, or QuickBooks. To kickstart the process, follow this simplified checklist:
Reconciled Financials:
Action: Grant access or export your reconciled financials.
Importance: The backbone for understanding expenses, particularly vital for Scope 3 considerations.
General Ledger:
Action: Ensure access to your general ledger.
Importance: A goldmine for Scope 3 insights, offering a detailed breakdown of transactions contributing to your carbon footprint.
Transaction Details:
Action: Make transactions easily identifiable.
Importance: Add supplier names and purchase details for a precise breakdown of emission sources.
Invoices with Activity Data:
Action: Submit invoices with activity data (e.g., kWh of electricity, litres of fuel).
Importance: Ensures accurate assessments by incorporating activity data into your carbon accounting.
Employee Commuting Survey:
Action: Conduct a simple survey on employee commuting habits.
Importance: Provides valuable data for assessing the impact of employee travel on your overall carbon footprint.
By addressing these key points, you're laying the foundation for a seamless and effective carbon accounting process. Remember, simplicity is key, and with this data, your carbon accountant can work their magic, presenting you with a clear and actionable report.
Initiatives for Tasmanian Tourism Businesses The Tourism Industry Council of Tasmania (TICT) is offering an excellent opportunity for Tasmanian tourism businesses to venture into carbon accounting. The TICT Emissions Reduction Initiative, supported by the Tasmanian government, matches eligible operators with two programs over 2023 and 2024. Program 2: Net Zero Advanced guides businesses through carbon accounting, offering training, cutting-edge software access, and financial support. Key Features:
Carbon Accounting Training: Specifically crafted for accountants and bookkeepers without prior carbon accounting experience, the program ensures a solid understanding of the intricacies involved.
$700 Subsidy: Eligible businesses receive a significant $700 subsidy, to support in covering costs associated with engaging a professional for carbon accounting.
Free Access to Sumday Software: Participants gain six months of complimentary access to Sumday, a sophisticated carbon accounting software, streamlining the implementation process.
Audit Ready Emissions Assessment: Obtain a transparent, audit-ready emissions assessment, providing a clear picture of your business's environmental impact.
Why Choose Net Zero Advanced?
Financial Support: The program offers a substantial $700 subsidy, making sustainability more accessible for businesses within the tourism sector.
Professional Guidance: Benefit from specialized training and engage with carbon accounting professionals to ensure accuracy and efficiency in the process.
Cutting-Edge Technology: Enjoy free access to Sumday, a carbon accounting software, facilitating a seamless transition into sustainable practices.
Strategic Insights: Receive tailored emissions reduction strategies from your carbon accounting professional, designed to align with the unique characteristics of your tourism enterprise.
Audit-Ready Results: Gain confidence with an audit-ready emissions assessment, showcasing your commitment to transparency and sustainability.
Application Process: Apply now to kickstart your carbon accounting journey! Learn more about the application process and apply.