Carbon accountants help firms keep their climate pledges
Carbon accountants help firms keep their climate pledges
The other day when Cooper Elsworth stepped into a Sweetgreen restaurant in Boston, he already knew what he was going to order.
“I’m vegetarian, so I’ll probably go for the hummus crunch salad,” Elsworth said. “That’s the lowest-emissions salad at Sweetgreen.”
He knows this arcane fact because it’s his job. Elsworth is a carbon accountant at a firm called Watershed. Instead of dealing in dollars and cents, he deals in greenhouse gas emissions.
Elsworth pointed to the massive refrigerator at the back of the store, full of carrots, spinach and limes. A financial accountant might look at that fridge as a $10,000 expense. But Elsworth saw something different: “Electricity usage and refrigerant leakage. So those are the two main sources of emissions.”
He tallied this up for all of Sweetgreens’ operations, from the ingredients in every salad to the commutes of the employees. Because, like many other companies, Sweetgreen says it’s going to zero out its carbon footprint this decade.
Elsworth is part of a growing profession, carbon accounting, that aims to help firms from Apple to Zoom meet their corporate climate pledges. Because before those companies cut their emissions, they have to measure their carbon footprint in the first place. It’s a service in high demand.
“We’re pretty busy. A lot of companies are looking for help,” said Kristina Wyatt, chief sustainability officer at the carbon accounting firm Persefoni, which counts the climate beans for Citibank, Einstein Bros. Bagels and Bumble. She said those clients want a standardized way to measure and report their carbon emissions. Because right now, corporate climate disclosures are all over the place.
“It’s sort of like if we were back in the barter system,” Wyatt said. “It was difficult to clearly define whether a chicken was worth a bale of hay, right? We didn’t have a common currency.”
Carbon accounting firms want to fix that. The best of them follow the Greenhouse Gas Protocol, internationally recognized as the gold standard for measuring corporate climate impact.
Increasingly, shareholders and customers want hard data on companies’ environmental performance, said Paasha Mahdavi, who researches energy policy at the University of California, Santa Barbara. And the data needs to be correct, because “regulators are demanding that information.”
Later this year, the Securities and Exchange Commission is expected to mandate that public companies report emissions, because climate change poses financial risks to business.
All of this means the carbon accountants are in line for a payday.
Ty Colman, co-founder of the carbon accounting firm Optera, estimated the total market value for carbon accounting is “tens of billions of dollars … and that’s just the accounting piece. The actual bigger play here is the work that needs to happen to decarbonize those organizations.”
It may take some time for the carbon accounting industry to go mainstream, but that was also true for financial accounting back in the day. During the Great Depression, the government told corporate America it had to do a better job tracking and reporting its finances. Firms were not happy.
“There was so much controversy,” Mahdavi said, “like steel companies saying, ‘We don’t know anything about accounting standards. What are you asking us for? Financial documents? Information? Like, that’s not what we do.’ But what did they do? They hired accountants.”
And we haven’t had another Great Depression. We’ll see what the carbon accountants can do about climate change.
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