What is carbon accounting?
Carbon accounting is measuring the greenhouse gas emissions an organisation is responsible for and reporting them in a consistent, checkable way. The result is a figure in tonnes of carbon dioxide equivalent (tCO₂e) for a stated organisation over a stated period.
"Equivalent" matters because several gases cause warming, and not equally. The GHG Protocol Corporate Standard covers seven: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride and nitrogen trifluoride. Each is converted into the amount of carbon dioxide that would cause the same warming, then the results are summed.
The GHG Protocol is the method almost every reporting standard builds on, including the IFRS S2 standard Nigeria has adopted. Learn it once, and the reporting standards become questions of presentation.
Is carbon accounting the same as GHG accounting or a carbon footprint?
Carbon accounting and GHG accounting mean the same thing: the method. A carbon footprint is the result, the total your carbon accounting produces.
ESG reporting is wider again. It covers governance, strategy, risk and social topics as well as emissions, and in Nigeria it means IFRS S1 and S2 disclosures.
Carbon accounting supplies the emissions figures inside it. See what ESG reporting in Nigeria requires.
Why do Nigerian companies need carbon accounting now?
Because emissions figures are part of mandatory reporting from 2028. Public interest entities report under IFRS S1 and S2 for periods beginning on or after 1 January 2028, and SRG 1 (2026) expects Scope 1 and Scope 2 to be disclosed, with Scope 2 also shown on a location basis.
Every figure in a first report comes from records created during that year, so the records have to exist before it starts. Banks, listed customers and parent companies that report may also ask for your figures well before your own deadline. See reporting deadlines for your dates.
What are Scope 1, 2 and 3?
The three groups every emission is sorted into. Scope 1 is fuel you burn yourself, Scope 2 is electricity you buy, and Scope 3 is everything else your business causes in its value chain.
On a typical Nigerian site:
Scope 1
diesel and petrol generators, boilers, furnaces, company vehicles, and refrigerant leaks from air conditioning.
Scope 2
electricity bought from the grid, from DisCo bills.
Scope 3
purchased goods and services, transport, waste, business travel, and the use of what you sell.
The Nigerian twist is the generator. Electricity drawn from the grid and electricity you generate on site sit in different scopes. A site that runs a generator for part of the day but is reported as if it were fully grid-supplied is wrong in both scopes, and the arithmetic still looks clean.
How do you calculate a carbon footprint?
You multiply each activity by an emission factor, then add the results. Litres of diesel times a combustion factor gives Scope 1; kilowatt-hours times a grid factor gives Scope 2.
Where the activity data comes from decides the method:
| Method | What you multiply | Best for | Trade-off |
|---|---|---|---|
| Activity-based | Physical quantities, such as litres or kilowatt-hours | Scope 1 and Scope 2 | Most accurate and easiest to evidence, but needs records per site |
| Spend-based | Money spent, using average factors per sector | A first Scope 3 screening | Quick, but a price rise looks like an emissions rise |
| Supplier-specific | The supplier's own emissions data | Material Scope 3 categories | Most precise for Scope 3, but depends on suppliers responding |
| Hybrid | A mix of the above | Most real Scope 3 inventories | Needs each figure's method to be recorded |
For Scope 1 and Scope 2, use activity-based data wherever it exists. An assurance provider can trace a litre or a kilowatt-hour to a document. They cannot do that with an average.
What are the steps in a first carbon accounting cycle?
Five: set your boundary, collect activity data, apply factors, calculate and review, and write down what you did. Most expensive mistakes trace back to skipping the first or the last.
- 01Set your boundary. Decide what "your company" means. The GHG Protocol lets you consolidate by equity share or by control, either financial or operational. Pick one, list every legal entity and site inside it, and write down anything you leave out and why.
- 02Collect activity data. Electricity per site per month from bills. Generator fuel per generator per month, counted as fuel burned, not fuel bought: opening stock, plus deliveries, minus closing stock. A Nigerian bag manufacturer found its diesel receipts put emissions in the wrong months for exactly this reason; the full account is in our ESG reporting guide. Fleet fuel from fuel cards or pump records. Spend data from your finance system for a Scope 3 screening.
- 03Apply factors. Use factors published by a recognised body, and record which factor and which version you used at the moment you calculate. SRG 1 recommends an IPCC or UNFCCC calculator with Nigerian emission factor considerations.
- 04Calculate and review. Check each month against the last. A reading ten times higher than usual is usually a typing error, and it is cheaper to find now than after publication.
- 05Write it down. Your boundary, methods, factors, exclusions and assumptions, in one document. This is what an assurance provider reads first.
What makes a carbon figure defensible?
Four things: a source document behind it, a recorded factor and version, a named owner who reviewed it, and a written method. If any one is missing, the figure is an estimate, whatever its decimal places say.
This matters more each year. The FRC roadmap requires assurance from the third year of reporting, and SRG 1 lists data ownership, documented methods, validation and audit trails among the internal controls a reporting entity must evidence. Attach the evidence when you record the figure, because attaching it six months later is the step that does not happen.
What is PCAF, and does it apply to you?
PCAF is the method banks, insurers and investors use to measure financed emissions, the emissions of the companies they lend to and invest in. The GHG Protocol confirms the PCAF standard conforms with its Scope 3 standard for category 15, investments.
If you are a bank, insurer or asset manager, SRG 1 expects financed emissions in your Scope 3 disclosure. If you are not, PCAF still affects you: your lender may ask for your Scope 1 and Scope 2 figures to calculate its own. See banking.
How can you learn carbon accounting?
Start with the GHG Protocol Corporate Standard, which is free to download, then the Scope 2 and Scope 3 guidance. The GHG Protocol also offers e-learning courses on its standards.
For the Nigerian rules, read SRG 1 and the FRC roadmap, both short enough for an afternoon. Then run one month for one site by hand. Nothing teaches the method faster than finding out where your own records are missing.
Do you need software for carbon accounting?
Not to start. One site with one meter and one generator can be done in a spreadsheet, as long as you keep the source documents and record which factor you used.
Software earns its cost when the volume grows: several sites, several generators, data owners in different departments, factors that get revised, and an assurance provider asking to see the document behind any figure. That is what carbon accounting software is for. If you are comparing products, use our buyer's checklist.
Book a demo: we run one month of your own bills and fuel logs through the calculation.
Check this yourself
These are the primary documents this guide is based on.