What are the Principles of Carbon Management?

As the world grapples with escalating carbon emissions, there is a growing impetus for businesses to prioritise climate action. Even then, enterprises that invest in measuring and reducing their carbon emissions comprehensively, will stand to gain a competitive advantage in a low-carbon economy. However, companies must adhere to three fundamental carbon management principles that will ensure meaningful progress. This article delves into what these principles are, exploring their significance in delivering a greener and more sustainable future.

Understanding Carbon Management Principles

Carbon management is the strategic implementation of activities for measuring, reducing, and offsetting carbon emissions. It encompasses a holistic and interconnected approach that involves a whole-of-organisation effort.

With the worsening climate crisis, effective carbon management is necessary in the global endeavour to mitigate climate change. By systematically addressing the root causes of carbon emissions through targeted measures like direct emission reduction and sustainable practices, businesses can reduce their overall carbon footprint. Synergising global efforts with the principles of carbon management on a business level is essential for achieving meaningful carbon reduction.




Principle 1: Measurement and Assessment

Accurate measurement of carbon footprints is the cornerstone of effective carbon management. It quantifies an organization’s environmental impact, enabling targeted emission reductions. This includes identifying emission hotspots; measuring Scope 1, 2, and 3 emissions; and developing decarbonisation pathways across complex supply chains.

Companies can expedite the carbon measurement process by working with decarbonisation platforms such as Terrascope. From advanced monitoring systems to data warehousing, tools like Terrascope enable companies to understand sources and trends in carbon emissions. By embracing technology, companies can ensure that the assessment process is not only accurate but also adaptable to the realities of diverse data formats across supply chains and Scopes.


Principle 2: Planning and Implementing Mitigation Strategies

Another key principle that can help businesses with carbon management is operationalising emissions reduction and mitigation strategies. Companies can start by creating a mitigation hierarchy uniquely tailored to a company’s circumstances. By implementing this, companies can find the right balance of reduction and mitigation actions in locating a path to Net Zero. Every mitigation hierarchy needs to implement five key actions: prevention, reduction, substitution, neutralisation, and compensation. This strategic approach ensures a comprehensive and responsible pathway for businesses to achieve net zero.

The next step for businesses is to implement their decarbonisation strategy, which can include adopting renewable energy sources, optimising resource usage, and more. By incorporating sustainable strategies across business operations and collaborating with suppliers, organisations become integral components of the broader global effort towards carbon management.

Governments also play a pivotal role in shaping the carbon management landscape. By implementing carbon tax regulations or emissions trading mechanisms, nations can financially incentivise emitters to reduce their greenhouse gas emissions. Australia, Europe, and many countries in Southeast Asia have already implemented carbon pricing instruments.


Principle 3: Offsetting and Carbon Credits

Another key principle that businesses must consider is carbon offsetting, which is the process of compensating for unavoidable emissions by investing in projects that remove or capture an equivalent amount of GHGs. Carbon credits are the units used to quantify these reductions, representing one ton of carbon dioxide equivalent. Companies or nations can purchase these credits from projects supporting renewable energy, reforestation, or methane capture, promoting sustainability and mitigating climate change. These credits act as currency in the carbon offset market and are usually part of a wider cap-and-trade system, where caps are instituted on the total amount of emissions. Credits are “permits” that allow companies to emit a certain amount of carbon, with the total market supply reduced regularly to align with climate strategies.

However, while supporting these projects can help companies balance their emissions, offsetting cannot replace direct carbon reduction. To make a lasting, positive impact on the environment, businesses must primarily focus on emissions measurement and mitigation. Severe reputational risks have even emerged around companies that have disproportionately invested in offsetting to placate consumers, without delivering meaningful, sustainable change.


Terrascope’s Role

The Terrascope solution not only enables corporate and product footprint at scale but also allows for the seamless management of enterprise data. By working with Terrascope, businesses can identify potential opportunities in their supply chain to lower emissions and work towards logistical resilience. Terrascope’s thorough sectoral expertise enables businesses to embrace cutting-edge technologies uniquely tailored to their use case for carbon management. Harnessing the power of AI and machine learning, our end-to-end decarbonisation platform can plug gaps in data, provide granular data, generate reduction simulations, and help keep track of decarbonisation efforts in the long term.



By paying attention to the key principles of carbon management — measurement, implementation, and offsetting, businesses can reduce their emissions and fight climate change. Businesses prioritising innovation and adopting responsible practices can help lay the groundwork for others to follow. It is through shared commitment that businesses and industries can forge a path towards sustainable, environmentally responsible growth.

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