How Startups Can Overcome Common CO2 Accounting Challenges

Startups often fail at CO2 accounting – but there are solutions. Common mistakes like poor data quality, insufficient supply chain data, and the use of basic tools lead to inaccurate results. However, with the right approaches, these problems can be solved. According to a 2023 report by the World Economic Forum, over 70% of startups and SMEs struggle to accurately measure and report their carbon emissions, often due to a lack of resources and expertise (source).

Common Mistakes:

• Poor data quality: Manual spreadsheets instead of automated systems. This often leads to inconsistent and incomplete data, which undermines the reliability of CO2 reporting (McKinsey).
• Missing Scope 3 data: Little transparency in the supply chain. For more on Scope 3 emissions, see the GHG Protocol. Notably, Scope 3 emissions can account for up to 90% of a company’s total carbon footprint, especially in manufacturing and retail (CDP).
• Basic tools: No automation, many sources of error. Relying on outdated tools increases the risk of human error and slows down the reporting process.
• Low stakeholder involvement: Little support from suppliers. Without supplier engagement, gathering accurate data across the value chain becomes nearly impossible.

Solutions:

1. Use modern tools: Automated software with AI and GHG standards. Modern platforms can reduce manual workload by up to 60% and increase data accuracy (Deloitte).
2. Apply standard methods: Clear separation by Scope 1, 2, and 3. These methods are outlined in the GHG Protocol and are increasingly required by regulators and investors.
3. Involve stakeholders: Training and clear communication. Building supplier capacity and awareness is key to robust data collection (BSR).
4. Bring in experts: Professionals for ESG strategies and analysis. External consultants can help identify gaps and optimize processes, especially for startups lacking in-house expertise.

Tip: Start by analyzing high-emission areas and set clear CO₂ targets. This way, you can meet legal requirements and operate more sustainably in the long term. For actionable steps, see the Science Based Targets initiative.

4 Main Mistakes in CO2 Calculation

Poor Data Quality

Many startups struggle with accurately capturing CO2 data because they often lack a structured infrastructure. Instead, they frequently use simple spreadsheets, which leads to inaccurate and hard-to-access data. Fragmented systems make consistent data collection difficult and leave gaps in reporting. In addition to internal issues, there are often deficits in collecting external supply chain data. A recent survey by PwC found that 60% of companies using manual processes reported significant errors in their emissions data (PwC ESG Survey).

Missing Data from the Supply Chain

Scope 3 emissions, which originate from the supply chain, are particularly difficult to capture in manufacturing industries. Since these emissions often account for a large share of total emissions, the lack of transparency within the supply chain becomes a major problem. Especially missing direct relationships with smaller suppliers make data collection significantly harder. The CDP highlights that only 37% of suppliers currently provide emissions data to their customers, underscoring the scale of the challenge.

Limitations of Basic Tools

Simple tools for CO2 accounting quickly reach their limits. Manual entries not only take a lot of time but also lead to errors. Without automated processes or ERP integrations, the work becomes inefficient. There is also often a lack of standardized data collection that meets the requirements of the GHG Protocol. According to Deloitte, companies using AI-powered platforms report up to 40% faster reporting cycles and fewer compliance issues.

Low Stakeholder Involvement

If stakeholders are not sufficiently involved, the quality of CO2 accounting suffers. Especially smaller suppliers often lack the resources or expertise to implement effective CO2 management. Different reporting formats and inconsistent methods for calculating emissions make it difficult to compare data. As a result, trust in the sustainability data of smaller companies drops significantly. The BSR recommends targeted supplier training and collaborative platforms to bridge these gaps.

How to Improve Your CO2 Calculations

Use the Right Tools

Use software that delivers accurate CO2 calculations. Choose platforms that comply with the GHG Protocol and cover all emission areas (Scope 1, 2, and 3). Systems with AI support are especially helpful, as they can automatically capture and analyze data, for example by reading invoices. According to Deloitte, AI-powered solutions can reduce manual data entry by up to 80% and improve data traceability.

A good CO2 calculation tool should offer the following features:

With these features, you ensure reliable data as the foundation for your CO2 accounting. For a deeper dive into digital solutions, see McKinsey's analysis on digital tools for carbon reduction.

Apply Standard Methods

Record emissions clearly separated by Scope 1, 2, and 3 and work with actual consumption data instead of estimates. Define precise system boundaries to ensure data quality. This structured approach makes collaboration with partners much easier. For detailed guidance, visit the IPCC for insights into climate change mitigation strategies and the GHG Protocol for practical methodologies.

Strengthen Collaboration

Close cooperation with stakeholders is crucial to improve data quality. A sustainability manager at CHAPS Merchandising GmbH emphasizes:

"Excellent onboarding, comprehensive platform and continuous support"

Successful partnerships can be strengthened through the following measures:

• Regular data exchange with suppliers
• Training employees on CO2 data collection
• Clear communication of sustainability goals

Industry leaders recommend using collaborative digital platforms, such as those outlined by BSR, to streamline engagement and data sharing.

Leverage Expert Knowledge

Experts can significantly simplify the CO2 accounting process. For example, LCS Cable Cranes not only created their first CO2 balance sheet with professional support but also discovered optimization opportunities.

Experts help with:

• Developing individual ESG strategies
• Conducting life cycle analyses
• Implementing reporting systems
• Employee training

Seibert Media GmbH highlights the benefits of external support:

"Efficient collaboration for CSR report and corporate carbon footprint."

With this support, you can make informed decisions and set clear sustainability goals. For more on the value of expert involvement, see EY's perspective on sustainability reporting.

Shaping Change Sustainably

Once you have improved your CO2 calculations, the insights gained should be permanently integrated into your business decisions. According to Harvard Business Review, companies that embed sustainability data into strategic planning outperform peers in risk management and innovation.

Integrate CO2 Data into Decisions

CO2 data can be an important foundation for strategic decisions. Companies should analyze their emissions data in a targeted way to identify high-emission areas. AI-powered systems help by automatically capturing and evaluating data from various sources. The McKinsey Global Institute notes that AI-driven analytics can identify emission hotspots and recommend actionable interventions.

Here are some examples of how CO2 data can be used effectively:

Targeted analysis of this data enables the implementation of effective measures.

Define Clear CO2 Targets

The federal government has set ambitious climate targets: a 65% reduction in CO2 emissions by 2030 and climate neutrality by 2045. Companies, especially startups, should align their own goals with these targets. Many companies are already guided by science-based targets (SBTi). As of 2024, over 4,000 companies globally have committed to SBTi, demonstrating the growing momentum for science-based climate action (SBTi Companies Taking Action).

Frank Siebke, CEO, emphasizes the importance of a comprehensive approach:

"To ensure the transformation succeeds, we approach it with an interdisciplinary team and support companies not just at individual points but holistically on their path to climate neutrality."

Clear objectives also make it easier to fulfill legal reporting requirements. For more on aligning with regulatory frameworks, see EY's guide to CSRD and ESG reporting.

Comply with Reporting Requirements

The new requirements from CSRD and ESRS are increasingly affecting smaller companies, especially in the supply chain. To meet the regulations, companies should:

• Document emissions by Scope 1, 2, and 3
• Disclose decarbonization measures
• Involve CSR or ESG managers if needed

There is still significant need for improvement in the manufacturing sector. Although supply chains in this area often cause high emissions, reporting on Scope 3 is lowest here. Thorough data collection and evaluation are therefore essential to remain future-proof. For a comprehensive overview of the latest reporting requirements, visit the European Commission's CSRD page.

Next Steps

Based on the previous optimization measures, precise CO₂ accounting is an important step for startups. Here you’ll learn how digital tools and strategies can make this process more efficient. Discover our marketing tech consulting for startups.

Fiegenbaum Solutions offers a platform that automates CO₂ accounting using AI. The key features and benefits:

This solution simplifies invoice capture for CO₂ accounting. It also supports report creation according to standards like VSME, ESRS, and GRI.

To get started, startups should first analyze their highest-emission areas. Based on this, measurable goals can be defined, for example by using renewable energy or working with environmentally conscious suppliers.

FAQ: CO₂ Accounting for Startups