Sustainability reports have become a staple in corporate communications. Every year, companies measure emissions, publish targets, and tout their environmental commitments. Yet, despite all the dashboards and disclosures, the gap between reporting and real progress remains vast. The reason is simple: we’re tracking carbon — but we’re not managing it.
This isn’t just a climate issue. It’s a data issue.
To decarbonize effectively, companies must have a clear understanding of where emissions originate — across operations, suppliers, products, and processes. Yet in many organizations, carbon data remains scattered, inconsistent, and disconnected from core business systems. The result is that sustainability often turns into a reporting obligation rather than a tool for real management and decision-making.
This challenge—and how to address it—is the focus of the paper “How Carbon Accounting Supports Corporate Decarbonization” by Dominik Asam (SAP), Jürgen Ernstberger, and Gunther Friedl (TUM School of Management). The authors advocate for a more integrated approach: embedding carbon data directly into financial and operational systems to drive actionable insights and meaningful progress.
It doesn’t have to be complicated. The tools and frameworks already exist—we just need to start treating carbon the same way we treat money.
Double-entry bookkeeping — for emissions
Finance teams run on structure, discipline, and detail. Every transaction is tracked, reconciled, and audited. Imagine if we treated carbon the same way: recording emissions at the transaction level, assigning them to business units and products, consolidating them just like financials. That’s what transactional carbon accounting makes possible.
The idea is to build a “green ledger” into existing enterprise resource planning (ERP) systems. This ledger tracks carbon flows with the same precision as cash flows — Scope 1, Scope 2, and even Scope 3 upstream emissions embedded in purchased goods and services.
By embedding carbon data directly into ERP systems like SAP S/4HANA, companies can monitor emissions in real time, link them to cost centers, and analyze them next to financial KPIs like margin, ROI, or total cost of ownership. The technology exists. What’s needed is the shift in mindset.
Compliance becomes a by-product — not the end goal
With regulatory frameworks like the EU’s CSRD and the SEC’s climate-related disclosures on the rise, companies are scrambling to produce auditable carbon data. But a transactional system changes the game: once emissions are integrated into day-to-day systems, reporting becomes automatic. More importantly, it frees up teams to focus not just on what they emit, but on how to reduce it.
And with upcoming mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM), or the rise of carbon pricing in global markets, having accurate, granular data won’t just be a reporting requirement — it will be a competitive advantage.
From reporting to decision-making
Carbon accounting isn’t just the responsibility of sustainability officers — it should be embedded in every strategic decision across the organization. A CFO, for instance, can evaluate the return on investment of emissions-reducing initiatives just as rigorously as a new production line. A Chief Procurement Officer (CPO) can factor verified emissions data into supplier selection alongside cost and delivery performance. For a Chief Operating Officer (COO), carbon budgets can become as actionable as financial ones, guiding adjustments to plant operations. Meanwhile, a CIO can design data architectures that integrate environmental and financial metrics, enabling smarter, cross-functional decisions. When carbon is treated like a financial resource — measurable, trackable, and controllable - it stops being an externality and becomes a lever for performance.
And that changes everything.
Crunching carbon numbers like we crunch costs
Take product carbon footprints as an example. Just as companies calculate the cost of producing a good, they can calculate its carbon footprint — breaking it down into material emissions, energy use, transportation, and overhead. The methodology mirrors cost accounting. The insight it provides helps redesign products, improve procurement, and guide consumers.
But with that power comes responsibility. Just as financial reporting requires assurance and controls, carbon accounting must be audit-ready. Allocations must be transparent. Assumptions must be consistent. Only then can we avoid the next wave of greenwashing.
Carbon is the next currency of business
Carbon is fast becoming one of the most important metrics in business. Whether you see it as a risk, a cost, or an opportunity, one thing is clear: if we want to cut emissions meaningfully, we have to start managing carbon like we manage money — with accuracy, accountability, and urgency.
In a world where sustainability goals are no longer optional, treating carbon like currency may be the smartest business decision a company can make.
To the publication: https://www.nowpublishers.com/article/Details/ACC-080-3
