Should more companies be taking carbon accounting in-house?

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1. Cost (the obvious one)

2. Stronger year-on-year learning

3. Faster visibility of mistakes

4. Platform flexibility

5. Bottom line...

This idea isn’t new. Increasingly, I’d join sales calls to pitch carbon accounting support to businesses, only to find they were already doing the work in-house. But the idea didn’t strike me as a “market movement” until 3 months ago.

Sitting centre-left in the first session of the inaugural Carbon Accounting Alliance conference, I watched a panel titled “What is the current state of carbon accounting?”

I was expecting an honest appraisal of how the market had been impacted by regulatory second-guessing and financial insecurity. Instead, I heard financial accounting professionals make a very convincing case for why in-house carbon accounting simply makes sense.

That was my “aha” moment.

Why and when does this make sense? There are four key arguments for me:

1: Cost (the obvious one)

Carbon accounting isn't going anywhere. Annual measurement is a "given," and paying an external provider is akin to paying a personal chef to cook your daily meals - they'll likely do a great job... but at some point, you should probably learn to cook.

Let’s assume businesses pay consultancies for a full corporate carbon footprint measurement. This includes scopes 1, 2 and 3 and access to an advanced SAAS platform.

If the “consultancy” part of this fee can be removed, cost would reduce substantially.

Many platform-only providers already recognise this, offering market-leading software without bundled consulting fees. That does raise questions around credibility and skills - but if your calculations are audited, credibility comes from the audit. What remains is ensuring the work is “good enough” based on the skills in your team.

We’ll come back to that...

2: Stronger year-on-year learning

Carbon accounting professionals learn a lot each new year - it’s a fast-paced industry. If you’re outsourcing your carbon accounting, those learnings are being missed.

Two things are increasingly true in an AI-enabled world:

1. It’s easier than ever to learn new skills to a credible level.

2. You miss learnings when you ask ChatGPT to do something for you, and the same is true when you outsource carbon accounting.

3: Faster visibility of mistakes

Carbon accounting consultancies are brilliant in my experience. Mistakes are rare, and when they occur, they are communicated openly.

But there is still friction.

Mistakes need to be identified, double-checked, discussed internally, and then carefully communicated - often on billable time. When the work sits in-house, issues are spotted, corrected, and learned from more quickly.

4: Platform flexibility

When consulting and software are bundled together, switching platforms usually means ending a relationship.

When you pay for platform access alone, you can move with the market - adopting better functionality or more competitive pricing as it emerges. Data migration takes effort, but far less than untangling a full consulting engagement.

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If this is all done well, businesses can find themselves benefiting from:

• An-in house team doing the bulk of measurement work annually;

• Keeping up-to-date with best practice via an external partner;

• Using a market-leading SAAS platform for a significantly reduced cost, which itself saves time and effort.

A successful example involves companies upskilling their existing financial accounting professionals. These people (a) are obsessed with numbers, (b) already have much of the required data and (c) may be motivated by the ‘change’ of a climate focused gig.

The result could be a carbon emissions measurement and reporting process which is more accurate, faster, cheaper and which is improved year-on-year.

Am I putting myself out of work by writing this?

I think the role of carbon accounting providers is changing, as it should be.

I recently decided to centre my own carbon accounting support on training organisations to take it in-house; empowering their teams to have all the skills needed, rather than calculating emissions myself. I also stayed platform-agnostic so I could help clients choose the best tools for them.

And other providers are already doing the same.

Training fees may mean that “all in” costs in year-1 are similar, but they drop significantly for year-2 and onwards.

Sure - our overall fees might be lower, but it feels right. It accelerates climate action and frees up fees for the “real” work in decarbonisation and climate risk, which I also happen to enjoy more…

Has this triggered some thinking for you?

Why not raise the topic with your current provider, or get in touch (below) for a free, open-minded conversation on the topic.