Explainer: What is Carbon Reporting?

There’s a saying: “You can’t manage what you can’t measure.”

Let’s say I’m planning to buy my first home. To save up, I’ll need to track my spending on everything from my daily coffee habit to my weekly commute. With those numbers in hand, I can identify where to cut costs so I can stash away money for a down payment.

This is the same idea behind carbon reporting. A company that wants to cut its greenhouse gas emissions first has to measure its carbon footprint.

This can get complicated. For example, a manufacturer’s carbon footprint would include emissions from manufacturing, selling, and shipping its product. But it might also include the emissions from the raw materials it buys, or the electricity that powers its factories.

By accurately measuring their carbon footprints, companies can better manage their environmental impacts. And as more pledged to reach net-zero emissions targets, publicly reporting those numbers can provide a powerful incentive to keep taking steps to cutting emissions.