How to Use Sustainability Accounting to Pinpoint Carbon Hotspots in Your Operations

As the global focus on decarbonisation intensifies, the oil and gas sector faces mounting pressure to reduce its greenhouse gas (GHG) emissions. Sustainability accounting offers a practical approach to identifying and addressing the carbon-intensive aspects of your operations. By systematically measuring and reporting environmental data, it’s possible to uncover the specific areas or  “carbon hotspots” that contribute most significantly to your emissions.

Here’s how sustainability accounting can help you pinpoint and address carbon hotspots to drive meaningful decarbonisation.

Step 1: Understand the Scope of Your Emissions

Sustainability accounting categorises emissions into three key scopes, as defined by the Greenhouse Gas Protocol:

• Scope 1: Direct emissions from owned or controlled sources, such as combustion engines or on-site flaring.
• Scope 2: Indirect emissions from purchased electricity, steam, heating, or cooling.
• Scope 3: Indirect emissions across your value chain, including transportation, supply chain activities, and product use.

Why It Matters:

Understanding these scopes provides a comprehensive view of your carbon footprint, helping you determine where emissions are generated both within and beyond your immediate operations. Rio offers a free consultancy call to help you define your scope

Step 2: Implement Robust Data Collection Systems

Accurate data is the foundation of sustainability accounting. Use advanced monitoring technologies to measure emissions across your operations. Common tools include:

• IoT Sensors: For real-time monitoring of energy use and emissions.
• Software Platforms: Platforms like Rio help aggregate and analyse environmental data.
• Energy Audits: To assess energy consumption and inefficiencies.

Practical Tip:

Standardise data collection across sites and operations to ensure consistency and comparability.

Step 3: Conduct a Materiality Assessment

A materiality assessment helps you prioritise the emissions sources that have the greatest environmental, financial, and reputational impact. Evaluate your operations based on:

• Emission Intensity: Which processes or facilities emit the most carbon?
• Regulatory Risks: Are there activities subject to strict compliance requirements?
• Stakeholder Concerns: Are there hotspots that investors or the public are particularly focused on?

Why It Matters:

Focusing on material hotspots ensures you allocate resources to areas where they will make the biggest difference.

Step 4: Map Your Supply Chain Emissions

Scope 3 emissions often represent the largest share of an oil and gas company’s carbon footprint. Use sustainability accounting to:

• Analyse emissions from suppliers, contractors, and distributors.
• Evaluate the carbon intensity of raw materials and transportation methods.
• Engage suppliers to improve their sustainability practices.

Practical Tip:

Collaborate with supply chain partners to share data and implement joint decarbonisation initiatives.

Step 5: Visualise and Analyse Your Data

Data visualisation tools like Rio can help you identify trends and patterns in your emissions. Use dashboards, reports and surveys to:

• Highlight emissions hotspots across operations, facilities, and supply chains.
• Compare performance against industry benchmarks and targets.
• Simulate the impact of potential interventions, such as energy efficiency upgrades or process optimisations.

Why It Matters:

Clear and actionable insights make it easier to prioritise and implement decarbonisation strategies.

Step 6: Take Action to Address Hotspots

Once you’ve identified carbon hotspots, it’s time to implement targeted solutions. Common strategies include:

• Reducing Flaring: Minimise methane emissions during extraction and production.
• Energy Efficiency Upgrades: Replace outdated equipment with more efficient alternatives.
• Renewable Energy Integration: Transition to solar, wind, or other renewable sources.
• Carbon Capture and Storage (CCS): Capture emissions from high-intensity facilities.

Practical Tip:

Set measurable targets for emissions reduction and track progress over time to ensure accountability.

Utilise Rio's Data Visualisation Tools to Pinpoint Hotspots 

Pinpointing carbon hotspots through sustainability accounting is a critical first step in reducing emissions and meeting decarbonisation goals. By understanding your emissions, prioritising material hotspots, and implementing targeted solutions, you can make meaningful progress toward a low-carbon future.

Start leveraging the power of sustainability accounting today to identify your carbon hotspots and lead the way in the energy transition.