In this guide, you will learn:
Carbon accounting can feel overwhelming—whether you’re just starting out or refining an existing strategy. Many companies worry their data isn’t complete or precise enough, but the truth is, no one starts with perfect data. What matters is building data maturity over time.
This guide will help you strengthen your approach, from improving data accuracy to shifting from spend-based to activity-based calculations. You’ll also learn how to stay ahead of evolving regulations and turn insights into meaningful action. And with real-world examples from companies that have successfully tackled these challenges, you’ll gain the clarity and confidence to do the same.
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A great first step in carbon accounting is using spend-based data, which estimates emissions by applying industry-standard emission factors to financial transactions. This means you can start calculating your footprint based on how much you spend in different areas—like electricity, travel, and materials—without needing detailed activity records.
✅ Quick and easy – Uses existing financial data, so no need to track every activity
✅ Helps identify hotspots – Gives a rough idea of your biggest emission sources
✅ Builds a baseline – Helps you measure progress as you refine your data
📌 A tech company without detailed travel records used its spend on flights and hotels to estimate business travel emissions. Later, they worked with travel providers to collect more accurate flight distance data.
📌 A retailer started by calculating emissions from office electricity bills based on total spend. Over time, they transitioned to tracking actual kWh usage for more precise reporting.
📌 A manufacturer initially used supplier invoices to estimate supply chain emissions. As their data maturity grew, they engaged vendors for real production data, improving accuracy.
Selecting the right emission indicator
Emission indicators are metrics used to measure greenhouse gas (GHG) emissions across different activities. They work by applying emission factors—for example:
By understanding these indicators, businesses can track emissions over time, compare performance, and refine their carbon reduction strategies.
Once you’ve established a baseline with spend-based data, the next step is to improve accuracy by shifting to activity-based data. This method uses actual usage data—such as liters of fuel burned, kilometers traveled, or kWh consumed—to calculate emissions, providing a more accurate measure than financial estimates.
✅ Greater accuracy – Uses real-world figures instead of industry averages
✅ Regulatory compliance – Meets stricter reporting requirements for ESG regulations
✅ Better decision-making – Enables more precise carbon reduction strategies
Before you can take action, it’s essential to have a clear understanding of your supply chain. Mapping your supply chain contributors will give you a comprehensive view of the activities, processes, and systems involved, allowing you to identify where emissions are most concentrated.
This initial mapping step is vital for determining where your greatest opportunities for improvement lie and will guide your engagement strategy with suppliers.
Once you have a clear picture of your supply chain, the next step is to collect accurate data. Focus on the suppliers that have the greatest impact, as they will be the most important to engage in your emissions reduction efforts.
Once you’ve gathered initial data, it’s time to set clear targets and track your progress toward achieving them.
Tracking progress on a regular basis will help you stay on top of your emissions and take corrective action as needed.
Case Study: World of Books’ carbon accounting evolution
Challenge:
World of Books (WoB), a leading re-commerce book retailer, wanted to refine their carbon accounting but lacked precise activity data, making Scope 3 reporting complex.
Solution:
They began with spend-based carbon calculations, using financial data to estimate emissions. This provided a starting point and helped engage teams across logistics, operations, and finance.
Over time, WoB transitioned to activity-based accounting, tracking specific data points like fuel consumption. This shift enabled more accurate emissions reporting and actionable insights.
Results:
✅ More granular, site-specific emissions tracking
✅ Clearer visibility into carbon impact across operations
✅ Improved collaboration across teams and suppliers
💡 Key takeaway: You don’t need perfect data to start. Begin with what you have and refine over time.
“Since implementing Sweep, inputting data has become effortless. We now have a clear view of the carbon intensity of each site’s activities, helping us shape the business as we move forward.” – Steve Furness, Head of Logistics, WoB
Data is at the core of complying with both mandatory regulations and voluntary reporting frameworks. While each framework varies in scope and structure, they all share a common requirement: accurate and reliable data. Whether it’s for carbon emissions, energy usage, or supply chain transparency, businesses need to collect and manage data to meet regulatory demands. From mandatory disclosures required by governments to voluntary frameworks like the CDP, having a solid data foundation is essential for reporting on sustainability practices.
In the European Union, two major frameworks govern sustainability reporting: the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR).
The CSRD requires large businesses to disclose their ESG performance, including detailed information on carbon emissions, energy consumption, and social impacts. The CSRD mandates that companies report on Scope 1, Scope 2, and Scope 3 emissions, as well as details on governance, business strategy, and environmental risks. While the CSRD focuses on large companies, its impact extends to the supply chain, requiring businesses to track their suppliers’ sustainability data as well.
The Sustainable Finance Disclosure Regulation (SFDR) focuses on financial institutions and investment firms, mandating that they disclose how their investments align with sustainability criteria. The SFDR requires detailed data on the environmental impact of investments, including carbon intensity and greenhouse gas (GHG) emissions.
In the UK, the Streamlined Energy and Carbon Reporting (SECR) framework requires companies to report on their energy usage and carbon emissions. Companies that meet specific thresholds, such as energy consumption or business turnover, must disclose their carbon footprint, including Scope 1 (direct emissions) and Scope 2 (indirect emissions) from electricity. While SECR is not as extensive as the CSRD, it is a mandatory framework for many UK-based companies.
In the United States, the Securities and Exchange Commission (SEC) has begun requiring climate-related disclosures for publicly traded companies. Under the SEC’s climate disclosure rule, companies must report on climate-related risks, including carbon emissions and climate-related governance. This includes disclosures on Scope 1, Scope 2, and Scope 3 emissions, as well as transition risks and physical risks from climate change.
In addition to federal requirements, several states, like California, have their own regulations, such as the California Climate Disclosure Law, which mandates additional climate-related reporting for large businesses. California requires companies to disclose GHG emissions, energy consumption, and the climate risks they face within their operations.
Voluntary reporting frameworks, like the CDP and GRI, allow companies to go beyond legal compliance and demonstrate their commitment to sustainability. While not legally binding, these frameworks help businesses enhance ESG reporting, engage stakeholders, and build credibility. The CDP, for example, focuses on carbon footprint, water usage, and supply chain sustainability, while the GRI provides guidelines for reporting on a broad range of ESG issues. Many investors and customers view participation in these frameworks as a sign of a company’s dedication to environmental and social responsibility.
The good news is that much of the data required by various ESG regulations overlaps. For example, both the CSRD and SECR require carbon emissions and energy usage data. Similarly, the SEC’s disclosure rules and California’s climate regulations often ask for similar environmental metrics, such as Scope 1, Scope 2, and Scope 3 emissions. This is where ESG software can make a significant difference.
Sweep allows you to upload your data once and use it across all relevant frameworks, reducing duplication and ensuring consistency. ESG platforms streamline the data collection, management, and reporting process, allowing you to meet compliance requirements for multiple regulations with minimal effort. By centralizing your data, you ensure that it remains accurate, transparent, and ready for review at any time.
By this stage, you’ve learned how to collect and refine your carbon data, navigate different calculation methods, and ensure compliance with key regulations. But data alone isn’t enough. The real challenge—and opportunity—lies in using this information to drive meaningful change.
Paul Simpson, Partner at ERM, stresses that: “Effective climate transition is more than a corporate duty; it is crucial for unlocking capital and enhancing long-term profitability.” A strong transition plan doesn’t just help you meet compliance requirements—it positions your business for resilience, efficiency, and growth in a low-carbon economy.
In this chapter, we’ll explore how to turn carbon data into a clear, actionable strategy. From setting science-based targets to engaging stakeholders and securing investment, we’ll break down the key steps to building a transition plan that delivers real impact.
Developing an effective climate transition plan requires a structured approach. The following steps can help organizations create a climate transition plan that meets regulatory and investor expectations.
A transition plan is not just a sustainability document—it is a strategic business tool that requires input from key stakeholders across the company. Engaging executives, finance teams, legal departments, and supply chain managers ensures that the plan is integrated into core business operations.
A strong transition plan should include measurable climate transition goals, such as:
A transition plan must align with financial planning and risk management. Companies should assess:
By embedding climate related financial disclosures into corporate strategy, businesses can enhance transparency and accountability.
A well-organized transition document should include:
The Transition Plan Taskforce recommends using clear and structured reporting formats to improve accessibility for investors, regulators, and other key stakeholders.
A climate transition plan is more than a document—it is a strategic tool that guides a company’s evolution toward a low-carbon economy. By this stage, you’ve learned how to develop a credible transition plan by embedding it within your business strategy, setting clear, science-based targets, and ensuring strong governance and accountability. The challenge now is to move from planning to execution.
The first step is securing leadership alignment and integrating the transition plan into core business decision-making. A well-structured plan is only effective if it has buy-in from executives, investors, and key stakeholders. Climate governance mechanisms—such as board-level oversight and climate-linked incentives—must be in place to drive meaningful change. Without clear accountability, even the most ambitious plans risk becoming empty commitments.
Once leadership is aligned, companies must identify and prioritize key transition initiatives. This means translating long-term net-zero targets into immediate, actionable steps. Companies should assess the financial implications of each initiative, allocate resources effectively, and integrate milestones into existing corporate strategies. Successful transition plans align with financial planning and risk management, ensuring that climate action is not seen as an isolated sustainability effort but as a core component of business resilience.
A strong reporting and monitoring framework is essential to track progress and maintain credibility. Transition plans must be dynamic, adapting to new data, evolving regulations, and shifts in the business landscape. Companies should establish clear performance indicators, report on progress at regular intervals, and remain transparent about any adjustments to their strategy. By aligning disclosures with established frameworks—such as the ISSB, TCFD, or the UK’s Transition Plan Taskforce—businesses can ensure compliance while reinforcing investor confidence.
Finally, the ability to secure investment will determine whether a transition plan can be successfully implemented. Investors are increasingly scrutinizing companies’ climate strategies, expecting clear, financially sound roadmaps for decarbonization. Businesses must effectively communicate how their transition plan mitigates risk, enhances long-term value, and aligns with global climate goals. Accessing green finance, sustainability-linked loans, or investor-backed transition funds can provide the capital needed to accelerate action.
Transition plans are not static—they must evolve alongside regulatory developments, business priorities, and climate science. Regular reviews, scenario analysis, and stakeholder engagement ensure that companies stay ahead of emerging risks and opportunities. By embedding climate considerations into every aspect of decision-making, businesses can not only meet compliance requirements but also position themselves as leaders in the transition to a sustainable economy.
Embarking on your decarbonization journey may feel like a challenge, but the benefits are significant. Beyond meeting regulatory requirements, you’ll unlock cost savings, enhance operational efficiency, boost corporate reputation, and elevate stakeholder satisfaction. Actively engaging in the sustainability movement opens doors to valuable networks, shared knowledge, and goodwill, positioning you on the right side of history.
We’re here to support you at every step. And your suppliers can get started for free!
Our free plan lets companies measure their emissions in Sweep – so you can invite all your suppliers. And once their measurements are in our platform, we can help them get further along their own carbon track.
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