There are so many questions an organization needs to ask when it is starting its carbon accounting journey. Getting a grip on all the different acronyms and calculation methodologies, as well as selecting the best carbon accounting software to fit your business needs, can be daunting, to say the least. Setting net zero goals and tracking progress towards them are made much easier with carbon accounting software, but ensuring you are asking the “right” questions in a request for proposal (RFP) or request for information (RFI) to find the best carbon accounting software can be overwhelming in such a nascent field. However, not to worry; we at Persefoni understand the complexity and want to offer our perspective to help guide you through that process to make it as seamless as possible.
“Framing” the RFP Process: Defining Your Business Objectives
When your organization is starting its carbon accounting journey, the first thing you need to define is your business objectives.
What are you trying to accomplish regarding carbon management and decarbonization?
Are you looking to be an industry leader in emissions reductions?
Are you trying to provide greater visibility in response to investors’ and stakeholders’ requests? Are you working to comply with current or anticipated regulatory requirements?
Are you assessing your climate-related risks and opportunities?
Understanding your organization's goals can help provide clarity during the RFP process. During this “framing” phase, your organization should also consider a range of factors such as:
the size and structure of your organization
the jurisdictions in which you operate and the regulatory requirements that apply or are proposed in those regions,
how ambitious your organization's carbon measurement and reduction targets are.
It is also essential to define and understand what your organization wants to accomplish.
Is your organization trying to measure Scope 1, 2, and 3 emissions?
Will you need integrations with other applications for data collection and aggregation?
Does your organization want to be aligned with the Science Based Targets Initiative (SBTi) or Partnership for Carbon Accounting Financials (PCAF), or others?
By defining and understanding all of this, your organization can make a better-informed decision about its priorities and the right partner for the job.
Questions to Ask Before Starting the RFP Process
Once your organization has defined its expectations, we would suggest asking the following questions of potential software providers:
1. Which industries does the platform support?
The measurement of greenhouse gas emissions is highly sector-specific. Therefore, you must ensure that the vendors on your shortlist support companies in your sector.
2. What Scope 3 categories does the platform support?
Scope 3 emissions are the indirect emissions in your company's upstream and downstream value chain, which typically comprise the majority of companies' emissions. Under the GHG Protocol, there are 15 categories of Scope 3 emissions. Knowing if the software platform supports the categories pertinent to your business is essential if you plan to calculate your Scope 3 emissions.
3. What unique calculations are in the platform?
Carbon accounting has many sector and geography-specific calculations and emission factors. You should ensure the calculations relevant to your company are included in the carbon accounting software or on their near-term road map.
4. What mechanisms are in place for auditability at the granular level tied to reporting frameworks and emission factors on the platform?
Recent developments in carbon accounting standards and proposed regulations have increased the demand for third-party assurance or audit of a company’s GHG emissions. We suggest asking vendors how the emissions data can be audited - and asking for a demonstration so you can see what that audit trail looks like.
5. Does the platform provide the ability to track all relevant emissions?
It will be important to know if the platform supports the full spectrum of emissions your company wants to measure, whether they are the direct emissions from your company's building and vehicle fleet (Scope 1), the indirect emissions from the energy you buy (Scope 2), or the indirect emissions from things like your investment portfolio (Scope 3).
6. Does the vendor have experience working with financial institutions, banks, or portfolio managers? If so, provide any case studies or examples.
Financial institutions have a specific methodology for calculating their emissions. The significant majority of financial institutions’ emissions come from financed emissions, which are the emissions from loans, investments, and financial services. The Partnership for Carbon Accounting Financials (PCAF) is the gold standard for measuring financed emissions. Therefore, to ensure financial institutions can measure the majority of their emissions on the platform, they should make sure the platform has codified the PCAF standard.
7. Does the platform provide industry benchmarking capabilities?
Measuring decarbonization progress against competitors and peers in your industry or geography is crucial for assessing progress. Additionally, calculating the carbon footprint across investments in a portfolio is essential functionality for investors.
8. Can the platform integrate with Workiva, CDP, Refinitiv, or other platforms?
Integration with other software platforms through an application programming interface (“API”) - or a direct data feed - can save significant time and cost, reduce the risk of data entry errors, and facilitate real-time updating of your carbon data. We encourage you to ask providers whether they have APIs with your utilities, financial systems, and other key data sources.
9. How is the vendor ensuring consistent product updates to ensure the platform meets the future needs of its users?
It is vital to ensure the platform has a strong roadmap and can adapt quickly in response to customer requests for new features. When investing in a new piece of software, you are not only buying the product as is but also investing in the future strategy of the platform.
10. Does the platform enable you to create/upload custom emissions factors? Is it integrated with Ecoinvent?
Certain organizations need a very specific set of emissions factors relevant to their products or services. If you are one of those organizations, you’ll need a platform that can support bespoke emissions factors. Ecoinvent is a database with very granular emissions data. A platform integrated with Ecoinvent will enable you to find the emissions factors relevant to your products and services.
11. What is the estimated return on investment of this product?
Recent research put the costs of measuring and disclosing climate-related information at around $533,000 in the first year of reporting. However, with software, these costs are likely to decrease significantly. We encourage you to ask vendors about the potential savings their carbon accounting software can provide and their mechanisms for measuring the ROI.
12. How can the vendor ensure data privacy and security?
Knowing how a software platform protects your data from getting into the wrong hands is essential. You should ask vendors questions like; Do they align with key data protection audit frameworks like ISO 27001? How do they authenticate users onto the platform? And what policies are in place to identify, measure, mitigate, and manage data risk?
13. What support does the vendor offer clients for onboarding and throughout the agreement?
Carbon accounting is a niche skill. It will therefore be essential to know that you will get the right level of support to ensure you are getting the most out of your vendor and using the best practices to accurately measure your carbon footprint and track towards your decarbonization goals.
14. Does the platform enable bulk and intelligent upload/deletion of data as well as third-party integrations for data upload?
Historically carbon accounting has been performed on spreadsheets using manual field inputs. A carbon accounting software should enable simple data uploads by merging existing data from spreadsheets or through integration with other business applications like SAP Concur, NetSuite, Expensify, TripActions, Coupa, SAP Ariba, and Amazon Web Services.
Choose the Right Climate Solution for Your Business
These are just some of the questions you should be asking your carbon accounting software vendor shortlist to determine which best fits the unique needs of your business.
Typically, the RFP process takes up to 8-12 weeks from inception to delivery. This timeline should be considered when creating your RFP, plus the possible additional 8-12 weeks to deploy any carbon accounting platform.
In a quickly-evolving, nascent field with many carbon accounting software providers available to choose from, the RFP process is vital to ensure the final vendor selection is the best suited to the needs and requirements of your business. To conduct an RFP with Persefoni to see if we meet the requirements of your business, you can schedule a demo here.
By getting in-depth answers to these 14 questions, your organization is on the way to understanding which carbon accounting software can help you meet your carbon and business needs.
© 2022 Persefoni AI Inc. All rights reserved. This presentation is the exclusive property of Persefoni and may not be copied or distributed, in whole or in part, without the express permission of Persefoni.
Persefoni is a leading Climate Management & Accounting Platform (CMAP). The company’s Software-as-a-Service solutions enable enterprises and financial institutions to meet stakeholder and regulatory climate disclosure requirements with the highest degrees of trust, transparency, and ease. As the ERP of Carbon, the Persefoni platform provides users a single source of carbon truth across their organization, enabling them to manage their carbon transactions and inventory with the same rigor and confidence as their financial transactions.