Carbon Accounting + ESG

Whether you are required to report on your carbon footprint or your clients demand it as part of their financial reporting obligations, Westcourt is well placed to help you manage your carbon accounting obligations through:

Help you understand your Scope 1, 2 and 3 carbon emissions.
Measure, track and record your carbon footprint.
Report on your carbon footprint with audit-ready support documents.
Assure your carbon footprint.

What is carbon accounting?

Carbon accounting is the process of tracking, recording, and reporting the carbon dioxide equivalent of your business’s carbon emissions. Your carbon footprint is reported within your financial reports and by applying Australian Accounting Standards.

From 1 January 2025, large businesses must comply with the Australian Accounting Standards Board AASB S1 and AASB S2.

The accounting standards are:

AASB S1 – General requirements for Disclosure of Sustainability Related Financial Information (voluntary)

AASB S2 Climate-Related Disclosures (mandatory).

The AASB S2 will incorporate the requirements of International Financial Reporting Standard S2 (IFRS S2) with some modifications for Australia.

Large companies’ obligations to report their carbon footprint within their financial statements will apply to their entire supply chain, so many Perth small to medium businesses are now being requested to measure, track, and report on their carbon accounting footprint, as large companies are now being required to report on this accounting measure.

At Westcourt, we are a Trace Carbon Accounting Partner that integrates your business accounting and carbon accounting programs into one location. We have tried and tested a range of carbon accounting solutions to create leading-edge carbon accounting services that can help a business family better engage with and manage its customer relationships.

Measuring carbon accounting

Your carbon emissions are measured through your cloud accounting software programs. At Westcourt, we apply 6 different steps to report on your carbon accounting footprint:

Determine boundaries
Identify emission sources
Select your carbon accounting calculation approach
Collect data and choose your carbon accounting emission factor
Apply your calculation tools
Prepare your audit ready carbon accounting report to outsiders.

Importantly, integrating your carbon accounting journey with your cloud accounting software programs is a critical step in controlling the carbon accounting and reporting workload your finance team will need to manage the additional workload for their carbon accounting journey.

Carbon accounting reporting

Many Perth SME’s are already being asked to prepare carbon accounting reports for their major suppliers. The accounting standards take a staged approach to forcing medium-sized businesses to report their own carbon emission footprint directly within their financial statements.

From 1 January 2025

Your business passes two of the three tests

You employ over 500 people.
Your gross assets exceed $1bn
Your revenue is over $500m.

From 1 January 2026

Your business passes two of the three tests

You employ over 250 people.
Your gross assets exceed $500m.
Your gross revenue exceeds $200m.

From 1 January 2027

Your business passes two of the three tests

You employ over 100 people.
Your gross assets exceed $25m.
Your gross revenue exceeds $50m

While none of our clients are mandated for the 2025 date, we have clients who will be directly impacted from 1 January 2026 and, moreso, 1 January 2027.

Many of our Perth SME clients are asked about their carbon accounting reports as part of large companies’ supply chains. And that is where Westcourt is helping – getting Perth SME’s carbon accounting footprint ready to use in tender documents with their larger clients to win business.

Scope 1, 2 and 3 Emissions

Understanding your different types of carbon emissions is a critical step in starting your carbon accounting journey.

Scope one emissions

These are the emissions your business directly produces from using company vehicles and the power you consume to create your product.

Scope two emissions

These are the indirect emissions you create in making your product – this will include the electricity created to power your office as part of your overhead

Scope three emissions

These are the emissions indirectly created by you through your suppliers. So, if you outsource your manufacturing to an outsider, your carbon accounting footprint created by the outsourced manufacturer will still be your responsibility.

If your supplier does not have any carbon accounting work done-you will be assessed at the highest rate of carbon emissions for that supplier-making that person in your supply chain damaging to your overall business model.

There are factors to consider beyond carbon emissions, such as cost and practicality.

However, to a certain degree, businesses can choose whether their fleet has low or zero carbon emissions to determine how their buildings are heated and for manufacturers to explore ways to reduce the carbon footprint of their production processes.

That said, a soft drink producer cannot control how consumers dispose of plastic bottles, just as an appliance manufacturer cannot dictate whether customers use the most eco-friendly settings on their laundry machines.

Quantifying emissions for scopes 1 and 2 tend to be more straightforward. For instance, companies can gather data on direct purchases of gas and electricity and convert it into a value representing the related greenhouse gases.

However, for many organisations, scope 3 emissions represent the most significant proportion of total emissions, and unfortunately, they are often the most difficult to reduce. A company can collaborate with suppliers and customers to identify and implement solutions to lower these emissions.

At Westcourt, we work within your business to understand your carbon needs and create structured and simple steps with cloud accounting software solutions so your carbon accounting reporting becomes an opportunity (not a cost).