CCA fact sheet

Analytical Costing

Type : Practical guide to carbon accounting

Date : 2024

Author : Mobeetip

Target : Businesses

Analytical Carbon Accounting is a method for calculating the Greenhouse Gas (GHG) emissions on which the organisation depends. Analytical Carbon Accounting is a carbon accounting approach that produces a GHG profile (and therefore indicators on the organisation's impact and dependence on GHG emissions) according to several customisable boundaries, according to the operational reality specific to each organisation.

🔎 The references of the Bilan Carbone® method to analytical carbon accounting are based on the Guide to Analytical Carbon Accounting, published at the initiative of Mobeetip.

What are the objectives of the approach?

Analytical carbon accounting makes it possible to:

• to build a Bilan Carbone® at different hierarchical levels, allowing each responsible person able to implement actions to track the impact of their decisions through the study of emissions at their level. The idea is therefore to break down the emissions profile by internal stakeholder (for example: business unit, team, site) to facilitate decision-making; and by external stakeholder (for example: customer, supplier) to facilitate the implementation of the transition plan (LCA, specific EF, supplier questionnaire, downstream study, etc.).

• to build the skeleton of the Bilan Carbone® according to the organisation's chart of accounts, at minimum for each boundary that the company supervises from a financial point of view for the purposes of cost optimisation or savings. Thus the organisation has the means to steer its decisions via a financial cost and a carbon cost.

These principles are compatible with the expectations of the Bilan Carbone® method. It is indeed possible to obtain a Bilan Carbone® by expressing the results (GHG profile and actions) with a so-called “analytical” view (according to axes or analytical categories). Analytical carbon accounting therefore makes it possible to establish the organisation's Bilan Carbone® as a decision-making tool and for impact, risk and opportunity assessment in response to energy and climate challenges

Specific glossary

The terms specific to analytical carbon accounting derived from the glossary are recalled below:

Analytical dimensions

The analytical dimension, in accounting, denotes the variables used to measure the different production costs. It works like a marker used to filter similar entries and retrieve groups for analysis purposes. Analytical dimensions are inherent to management accounting. They support strategic decisions by providing a level of detail to accounting data.

Analytical dimensions can be of different natures. At the scale of a company or group, an analytical dimension allows for example to categorise:

• The company's activities,

• Physical sites,

• The legal organisation (subsidiaries, franchisees)

• The human organisation (teams, employees),

• Projects,

• Products or services,

• Suppliers,

• Customers.

For each of these dimensions, analytical codes define the possible values.

Analytical dimensions can be used in the Bilan Carbone® for the analytical carbon accounting, to build a reading or a nomenclature used for the operational boundary, to allocate emissions of the GHG profile, etc. They correspond to the division of emissions by responsibility, in order to build a transition plan with several levels of responsibility within the organisation.

Analytical dimensions are not always present in an organisation's accounting (they sometimes do not have an analytical plan). However, even without a formalised analytical plan, the organisation sometimes has a view of its costs and budgets by dimensions (supplier, customer, project, site, team, etc.). These dimensions will be used by analytical carbon accounting because they are those that allow the organisation to be managed.

Accounting exports

Chart of accounts and analytical accounts are stable over time for a given organisation without major structural modification.

At each accounting period, the organisation records all revenues and costs of its activity in accounting entries (debit or credit allocation). This accounting is done in accounting journals (e.g. purchase journal, sales journal, bank journal…).

Different formats exist to export this accounting in its entirety:

• The FEC (Fichier des Ecritures Comptables): standardised accounting file, notably used by the French administration to carry out fiscal checks on companies. It transcribes all accounting entries but does not include analytical entries.

• The general ledger: standardised accounting file; its structure is however configurable to some extent to allow the organisation to adapt its accounting to its needs. However, it does not allow analyses of the organisation's activity because it follows general accounting, its final objective being the preparation of annual financial statements (balance sheet, income statement and notes).

• The analytical ledger: non-standardised accounting file, which nevertheless includes mandatory fields. It includes all analytical allocations and allows an analytical analysis of the accounting.

This definition refers to the guide for analytical carbon accounting.

What is/are the target(s) of the approach? 

As a reminder, the Bilan Carbone® method is divided into 3 main maturity levels (Beginner, Intermediate and Advanced).

Analytical carbon accounting is possible for all maturity levels. The objectives of the approach will advance the organisation in its transition journey.

It is recommended and relevant for a Advanced level to put in place analytical carbon accounting to obtain reading keys by responsibility boundary, allowing the organisation's Bilan Carbone® to be established as a decision-making tool.

Does the approach rely on a specific methodology?

The methodological principles are compatible with the expectations of the Bilan Carbone® method, provided that further reflection are followed at each stage of the approach.

The methodological complements are presented in the dedicated sections of the Bilan Carbone® method guide and are recalled below.

Organisational boundary

To express the Bilan Carbone® with a so-called “analytical” view, in coherence with analytical carbon accounting, the organisational boundary considers or defines the analytical dimensions of the organisation.

Temporal boundary

To express the Bilan Carbone® in coherence with analytical carbon accounting, the temporal boundary considers a complete accounting period, best reflecting the organisation’s activity as a whole.

Operational boundary

Identification of emission sources

To express the Bilan Carbone® in coherence with analytical carbon accounting, the organisation shall identify the same emission sources (those for which it is responsible and dependent), while keeping the objective of subsequently allocating them according to an so-called “analytical” mapping that will cross-reference accounting codes and analytical axes.

It identifies supported and non-supported emissions. Supported emissions come from activities financed by the organisation. They therefore appear in accounting exports. Non-supported emissions are not financed by the organisation, but are still obligatorily included.

• Supported emissions are mapped from the company's accounting data. To identify supported emissions, an analysis of the accounting exports is carried out to identify all classes of accounts:

  • Representing a physical flow,

  • For which there is a cost or amortisation in progress over the analysed period.

  All identified classes of accounts must be included in the Analytical Carbon Accounting as being one or more emission categories.

• Emissions not borne by the company must be added. To account for non-borne emissions, it is possible to carry out a mapping of flows or any other method that identifies the list of emission categories exhaustively. The objective is to identify all physical flows on which the organisation's activities depend and which are not borne by the organisation. These flows shall be included in the Analytical Carbon Accounting as one or more emission categories.

⏳[WIP] The organisation will be able to find a correspondence table listing all the accounting codes to be reviewed in order to identify the emission sources that must be considered within the Bilan Carbone®.

Emission category nomenclature

Several nomenclatures exist and can be combined. The important thing is to be exhaustive on the boundary because it is easy toexport these results into several different nomenclatures at the same time (Bilan Carbone® categories, BEGES regulatory categories and items and ISO 14064-1, structure of the analytical plan, GHG-P scopes, etc.).

To express the Bilan Carbone® according to other nomenclatures, frameworks or standards, additional steps may be necessary.

For example, to obtain an export consistent with analytical carbon accounting, it is necessary to split the identified emission sources in the accounting exports by analytical dimensions (site, activity, team, supplier, customer…). Note that the dimensions may differ for each source (for example energy will be divided by site, or purchases by supplier).

Method for collecting activity data

To express the Bilan Carbone® with a so-called “analytical” view, in coherence with analytical carbon accounting, the activity data must be collected by analytical axis, and therefore allocated by responsibility (suppliers, customers, sites, etc.). Accounting codes make it possible to be exhaustive about the supported emissions by the organisation. The associated data sources are thus linked to each accounting code (for example an export of purchases for accounting code 601321), then to the analytical dimensions (for example an export of purchases broken down by suppliers).

Data sources must incorporate the analytical axes identified as relevant for the analysis of the results. The absence of analytical axes in a data source necessary for dividing emissions according to that analytical axis may justify abandoning that analytical axis. The addition of the analytical axis in the data source will be a process improvement action of the approach.

In analytical carbon accounting, the matrix indicates for each activity data the accounting code and the associated analytical axis.

Export of the emissions profile

If the organisation uses analytical accounting, emissions will be distributed according to the accounting codes and analytical dimensions, established specifically for the organisation, which best reflect its structure and mode of operation (activities undertaken, internal processes, etc.). Different analytical axes can be used for each emission category (for example purchases can be split by supplier, and energy by site)

Therefore, a generic cross-reference table cannot be envisaged.

Nevertheless, the organisation may find below a cross-reference table listing all the accounting codes that should be reviewed in order to identify the emission sources that must be considered within the Bilan Carbone®. When an emission source does not give rise to monetary expenditure (non-supported emissions), it obviously remains to be taken into account within the Bilan Carbone®.

⏳[WIP] A forthcoming resource will be produced and made available to provide a correspondence table with the nomenclature of an accounting plan. These correspondences will be integrated into the exports of Bilan Carbone® tools.

Stakeholder engagement

For organisations following analytical carbon accounting, the times for coconstruction of actions can be carried out by analytical axes corresponding to internal stakeholders of the organisation (site, team, project, product, subsidiary, franchisee, activity). This makes it possible to identify potential actions at all scales of the organisation.

Construction of the action plan

To express the Bilan Carbone® with a so-called “analytical” view, in coherence with analytical carbon accounting, each action shall include, in addition to the information above, the analytical axes concerned.

If actions can correspond to several analytical axes: they shall be subdivided into several action sheets, identified on a single axis so as to have only one associated responsible person. For example, to act at the sites level, creating one action sheet per site manager makes the action operational, involves only the managers of the sites concerned, while allowing the management of aggregated actions at the level of all sites.

This operational breakdown of the action for each responsible person (by internal analytical axis: team, activity, project…) and by external stakeholders (by external analytical axis: suppliers, customers) makes it possible to put emissions and actions into perspective for each analytical axis, and thus to monitor the results.

Concerning the “ process improvement actions ”, specific actions for structuring analytical carbon accounting can be considered.

Definition of the transition pathway

To express the Bilan Carbone® with a so-called “analytical” view, in coherence with analytical carbon accounting, the trajectory of the organisation as a whole can draw on trajectories by analytical axes. The objectives and reduction potentials will not necessarily be the same depending on activities, teams or any other chosen analytical axes. Each responsible person commits to their own trajectory and to their own emissions. The consolidation of the trajectories and actions envisaged by each responsible person makes it possible to feed or verify the coherence of the overall trajectory.

Reporting of the approach

It is possible to obtain a Bilan Carbone® compatible with the expectations of analytical carbon accounting, by expressing the results (GHG profile and actions) with a so-called “analytical” view (according to axes or analytical categories). This makes it possible to build a Bilan Carbone® at different hierarchical levels (responsibility boundaries), and to steer decision-making via a financial cost and a carbon cost. For this, and in addition to all the Bilan Carbone® deliverables, additional information shall be reported :

• The list of analytical axes selected for the study

• The temporal boundary of the last accounting period

• The list of analytical axes selected for the study, considered per emission category

• The list of accounting codes taken into account and linked to the emission categories

• For each responsibility boundary: the allocation of the emissions profile, the reduction trajectory and the action programme

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