Automated Carbon Accounting with AI Data Extraction

Environmental responsibility is becoming more important for businesses due to growing concerns about climate change. With a heightened focus on sustainability, carbon accounting has become a valuable tool for measuring a business’s climate impact and identifying ways to reduce it. However, the process can be time-consuming due to the extensive data collection required to cover the volume and variety of information involved.

 

This challenge can be addressed with the help of document data extraction software like Xtracta, which automates carbon accounting by quickly processing documents and extracting relevant information. Third-party consultants and auditors can then access and utilise this data, significantly reducing the manual effort involved.

What is carbon accounting?

Carbon accounting measures an organisation’s greenhouse gas (GHG) emissions by tracking and quantifying them to determine the company’s carbon footprint. This process considers both direct and indirect emissions, categorised into three tiers: Scope 1, Scope 2, and Scope 3, based on specific parameters.

 

• Scope 1: The first category, sometimes called direct emissions, accounts for emissions directly released from an organisation or sources they control. Examples include emissions from burning coal used in a factory or petrol used in the company fleet.
• Scope 2: Also known as indirect emissions, this category includes emissions generated by an organisation purchasing electricity, steam, heating, and cooling. Regular power bills fall under this category.
• Scope 3: The last category, also known as supply chain emissions, covers emissions from supply chain partners. Scope 3 emissions are also indirect; however, they include the full scope of emission-generating activity from organisations they don’t control.

 

Carbon accounting is usually done with the assistance of a third party who analyses and verifies the data. The process begins with collecting data from across the organisation. After the data is compiled, a consultant or auditor analyses the organisation’s emission-generating activities and produces a report.

 

Why is carbon accounting important?

Carbon accounting plays a critical role in helping organisations address their environmental responsibilities. To effectively lower emissions, organisations must first measure them accurately and understand their sources. This data forms the foundation for identifying areas of improvement and developing targeted strategies. By providing a clear picture of emissions, carbon accounting tools enable organisations to make informed, data-driven decisions that align with their sustainability goals and contribute to slowing climate change.

 

Why do businesses need carbon accounting tools?

Carbon accounting is a time-intensive endeavour that, like all organisational activities, can be optimised with the right solution.

 

Automated carbon accounting software simplifies and streamlines data collection, saving time for organisations that need to produce regular reports. By automating data capture, businesses can allocate resources to more critical tasks, improving overall efficiency.

 

 

What are the challenges of traditional carbon accounting processes?

Current data collection methods for carbon accounting can be improved. Many organisations are already busy and run at full capacity, and having to gather extensive data adds pressure on employees and creates inefficiencies.

Manual data collection for audits takes a long time

An accurate and comprehensive carbon accounting report requires extensive data. Finding and sourcing this data internally for Scope 1 and 2 emissions takes time, as does requesting this information for Scope 3 emissions from supply partners. This problem is further exacerbated in larger organisations when departments are siloed off from each other. Ultimately, this can drag out the process even more, as collecting the data is only the first step of the carbon accounting process.

 

Manual data collection is tedious

The data required for carbon accounting is often scattered across an organisation. Gathering it manually and compiling it for consultants creates a significant administrative burden. Manually processing and interpreting the volume of data provided is laborious for consultants. Documents won’t always have the necessary measurements, creating an extra step to analyse the data. The data may also be structured differently in the case of purchase invoices from different suppliers, creating more work to align the data.

Data can be incomplete or inaccurate

Lastly, data collected manually can be prone to human error. Invoices may be missing or sent as duplicates, and any error creates unnecessary back-and-forth between an organisation and the consultants conducting the audit.

 

How Xtracta optimises carbon accounting processes using document data extraction

Manual data collection is no longer an issue with automated data capture software like Xtracta. The type of data used for carbon accounting, especially for scope 2 and scope 3,  is often contained in documents such as purchase invoices, which an AI-powered document data extraction tool can accurately parse. If your business uses software integrated with Xtracta, you likely already have centralised access to this information.

 

Xtracta can read and interpret documents regardless of their format, identifying specific figures across a range of documents structured differently. Using AI carbon accounting software, you can automate data compilation and consolidation to provide the necessary information. This also gives you more time to ensure the data is accurate and complete before it is shared.

 

If carbon accounting is becoming more important in your industry or sector, it could be time to evaluate your business’s approach to data collection. Xtracta offers a powerful solution for streamlining data-related tasks and processes. As an AI-powered data extraction tool, Xtracta can efficiently interpret and analyse large volumes of documents, extracting the specific data you need. The timesaving and productivity opportunities are extensive.

 

Contact an Xtracta expert today to learn more about how document data extraction can streamline your carbon accounting process.