Carbon Accounting
Being a climate positive business and taking active steps to reduce our environmental impact has been important to us since day one. So important, in fact, that we’ve evolved a value into a service for clients who share our want for positive change.
Carbon Accounting is the process of accurately reporting non-financial information that leads to a clear understanding of what your businesses emissions are and how those emissions are being created. It means that you can take steps to offset your business to either become a carbon neutral or positive business, knowing you’ve done so properly. No stabs in the dark – decision making based on real data.
Mandatory Reporting
For ASX listed companies, mandatory climate disclosures are coming into play. How does this affect small business? Because often, small businesses will be in the supply chain of larger ones. This means you’ll potentially be caught up in this reporting pipeline. Getting ahead of the game and having your own environmental report ready to roll will not only make this process smoother, but also make you an attractive supplier in the long term for those bigger fish.
Scope One Emissions
These are the emissions that your business directly creates such as vehicles you put on the roads or energy you consume to create your product.
Scope Two Emissions
These are indirect emissions like the electricity provider you’ve chosen to engage with – what are their greenhouse gas emissions?
Scope Three Emissions
This refers to the emissions of your providers. For instance, what’s the carbon footprint of your accountant?
Working with Trace
We connect Xero with Trace’s platform which means your accounting data is used to accurately access your carbon footprint with Trace’s incredible software. From there we can help you take steps to both offset your emissions but to also reduce them in general. You’ll know what emissions are coming from which specific source and using the numbers, we can help to advise on where you may be able to make different choices, leaving the planet a better place.
Frequently Asked Questions
Can’t find what you’re looking for? Get in touch!
These are the three categories used to classify business emissions and understanding the difference is the first step in measuring yours properly.
Scope 1 covers emissions your business creates directly, fuel burned by your vehicles, gas used in your premises, or energy consumed in production.
Scope 2 covers indirect emissions from the electricity or energy you purchase, so your energy provider’s emissions profile matters here.
Scope 3 is the broadest category, it includes the emissions of your entire supply chain, including your suppliers, contractors, and yes, even your accountant. This is where things get interesting for small businesses sitting inside larger companies’ supply chains.
We measure all three as part of our carbon accounting service.
We use Trace’s platform integrated directly with your Xero data. Because your financial records already capture what you’re buying, who you’re paying, and how your business operates, Trace can use that information to calculate your emissions accurately by source, without you needing to manually log every litre of fuel or every electricity bill. The result is a reliable, data-driven carbon footprint that you can actually stand behind.
Australia’s mandatory climate disclosure framework is being rolled out progressively, starting with larger listed companies and working down. As a small business, you may not be directly required to report yet. But if you supply goods or services to a company that is required to report, they’ll need to account for your emissions as part of their Scope 3 reporting. That means your carbon footprint becomes their compliance problem. Having your own environmental report ready is a genuine commercial advantage, and in some industries, it will become a condition of doing business.
Measuring is the foundation, but the goal is always to reduce. Once we’ve mapped your emissions by source using Trace, we can identify where the biggest opportunities for reduction sit, whether that’s switching energy providers, changing procurement decisions, reducing business travel, or adjusting your operations. Some changes are quick wins; others are longer-term. We help you prioritise based on impact and cost, so you’re making decisions grounded in data rather than just good intentions. Offsetting remaining emissions is available as a complement to reduction, not a substitute for it.
More than most people realise. The same financial data that drives your tax returns and BAS lodgements is the foundation for your carbon footprint calculation. By integrating Trace with Xero, your carbon accounting runs alongside your financial accounting – not separately. This means less duplication, more accuracy, and a cleaner picture of your business’s full impact. It also means Future Advisory can manage both in one place, so nothing falls through the cracks between your financial and environmental reporting.
In more ways than you might expect. Consumer preferences are shifting, and not just in the obvious industries. Businesses that can demonstrate genuine environmental accountability are increasingly preferred by clients, partners, and talent. For B2B businesses, being able to provide verifiable emissions data to large corporate customers can be the difference between being on their approved supplier list or not. And for businesses eyeing government contracts or grants, environmental credentials are becoming part of the assessment. The short version: yes, it’s good for the planet, and yes, it’s increasingly good for business too.
Carbon accounting is the process of measuring, tracking, and reporting your business’s greenhouse gas emissions across everything from the vehicles you run to the electricity you use to the suppliers you choose. For small businesses, it might sound like something only the big end of town needs to worry about. But with mandatory climate disclosures rolling out for ASX-listed companies and filtering down their supply chains, the question isn’t if you’ll need to account for your emissions it’s when. Getting ahead of it now means you’re ready when the time comes and attractive to the bigger businesses you want to work with.
Increasingly, yes. While mandatory reporting currently targets larger companies, small businesses often sit in the supply chains of those larger ones. When your big clients need to report their Scope Three emissions, which includes the footprint of their suppliers, your emissions become part of their story. Being able to hand over a clean environmental report puts you ahead of competitors who aren’t across this yet. Think of it as future-proofing your supplier relationships before they ask you to.
Not quite, but they work together. Carbon accounting comes first, it’s about accurately measuring what your emissions actually are, source by source, so you’re working with real numbers. Carbon offsetting is one of the tools you can use once you know your footprint, to neutralise emissions you can’t yet eliminate. Without the accounting, you’re just guessing at what to offset. With it, you’ve got a proper baseline to work from and a clear path toward carbon neutrality or better.
Carbon neutral means your business’s net greenhouse gas emissions are zero, you’ve either eliminated them or offset what you can’t yet eliminate. Carbon positive (sometimes called climate positive) goes a step further: you’re actively removing more carbon from the atmosphere than you’re producing. At Future Advisory, we’ve been committed to this since day one which is exactly why we built it into a service for clients who share our values. It’s not greenwashing. It’s proper accounting applied to a problem that actually matters.
As a forward-thinking accounting firm, we connect your existing Xero data with Trace’s platform so rather than starting from scratch with a new system, your financial data does the heavy lifting. Trace’s software uses that data to accurately calculate your carbon footprint by source. From there, we help you understand exactly where your emissions are coming from, what you can reduce, and what you might choose to offset. It’s real numbers, real decisions, not a certificate on the wall that nobody can back up.