Carbon Accounting: Scopes, Baselines & Targets
A company can announce a shiny net-zero target and still be unable to answer a simple question: where did last year’s emissions actually come from? Carbon accounting is the discipline that turns climate ambition into a measurable business system - boundaries, data, baselines, targets and accountability.
- Carbon accounting measures greenhouse gas emissions in CO2-equivalent terms across a defined business boundary.
- Scope 1 is direct emissions from owned or controlled sources; Scope 2 is purchased energy; Scope 3 is value-chain emissions.
- A baseline is the reference year or period against which future emissions reductions are measured.
- A good inventory needs five building blocks: boundary, activity data, emission factors, calculation method and assurance trail.
- Targets can be absolute, intensity-based, renewable energy or net-zero; never confuse them.
- Scope 3 is usually the hardest because it sits outside direct control - suppliers, logistics, product use and end-of-life.
- In interviews, answer carbon accounting like a business control system, not like a CSR slogan.
Big Picture: Carbon Accounting Is a Management Control System
Think of carbon accounting like financial accounting for emissions. The company first decides what is inside the boundary, then collects operational data, applies emission factors, builds an inventory, and finally sets reduction targets.
Core Explanation: Scopes, Baselines and Targets
The big idea is simple: you cannot reduce what you have not defined, measured and normalised. Carbon accounting has three layers that interviewers expect you to connect - scopes, baselines and targets.
1. Scopes: where emissions sit in the business system
The Greenhouse Gas Protocol is the dominant global standard used by companies for corporate emissions accounting. Its Corporate Accounting and Reporting Standard classifies emissions into Scope 1, Scope 2 and Scope 3.
Scope 1 and 2 are usually easier to measure because the company has invoices, meter readings and fuel purchase records. Scope 3 is harder because the company often needs estimates from suppliers, customers and industry databases.
In India, SEBI introduced the Business Responsibility and Sustainability Reporting framework for listed entities, and the BRSR format asks companies to disclose Scope 1 and Scope 2 greenhouse gas emissions (SEBI circular, May 2021). So carbon accounting is not only a sustainability topic - it is increasingly a reporting and governance topic.
2. Baselines: the starting line for every target
A baseline is the reference year, or average of years, against which future emissions reductions are compared. If a company says, “we will cut emissions by 50%,” the immediate follow-up is: 50% from which baseline?
A credible baseline should answer four questions:
This is where consulting-style problem definition matters. If the boundary is vague, every later recommendation becomes weak - the same discipline you use in defining the problem before solving it applies directly to carbon baselines.
3. Targets: the promise to reduce emissions
Targets translate the baseline into a time-bound commitment. A strong answer distinguishes four target types instead of using “net zero” as a loose buzzword.
Key Measures to Track in Carbon Accounting
In interviews, do not stop at “measure emissions.” Name the measures, formula and interpretation. The exact benchmark depends on industry, but these are the 4-6 metrics a good candidate can speak to confidently.
Worked Example: turning electricity use into Scope 2 emissions
Assume a warehouse consumes 1,000 MWh of grid electricity in a year. If the applicable emission factor is 0.70 tCO2e per MWh, then:
Scope 2 emissions = Activity data × Emission factor = 1,000 MWh × 0.70 tCO2e/MWh = 700 tCO2e.
If the warehouse reduces consumption to 850 MWh through efficiency, emissions become 595 tCO2e, before considering renewable electricity procurement. The interview lesson: always separate activity reduction from emission-factor reduction.
Definitions You Can Say in One Breath
- GHG Protocol - Scope 1: Direct GHG emissions occur from sources owned or controlled by the company.
- GHG Protocol - Scope 2: Scope 2 accounts for GHG emissions from generation of purchased electricity consumed by the company.
- GHG Protocol - Scope 3: Scope 3 covers other indirect emissions that occur in the company’s value chain.
- SBTi - Science-based targets: Targets provide companies a clearly defined pathway to reduce emissions in line with the Paris Agreement goals (Science Based Targets initiative).
- Baseline: The reference year or period used to measure future emissions reductions.
- CO2e: A common unit expressing different greenhouse gases by their warming impact relative to carbon dioxide.
Case Study: Infosys Makes Carbon Accounting Operational
Infosys is a useful Indian example because it connects climate ambition to operating levers such as efficiency, renewable energy and residual-emissions treatment in its ESG disclosures.
Situation. For a large IT services company, emissions are not mainly about smokestacks. They come from electricity used in campuses and data infrastructure, business travel, employee commuting, purchased goods and the wider operating ecosystem. That makes carbon accounting a coordination challenge across facilities, procurement, travel, finance and sustainability teams.
The move. Infosys publicly describes its ESG approach around reducing environmental impact, improving resource efficiency and using renewable energy and offsets for residual emissions (Infosys ESG page). The strategic logic is important: first build the inventory, then reduce demand through efficiency, then decarbonise energy, and only then address residual emissions.
Outcome and lesson. The case shows that credible carbon accounting is not a one-time spreadsheet. The primary driver is operational discipline - measuring energy and emissions at the right level of granularity. Supporting drivers include renewable electricity procurement, governance ownership, supplier engagement and transparent ESG disclosure. The “so what” for interviews: carbon accounting becomes valuable only when it changes decisions in facilities, procurement and capital allocation.
How AI Changes Carbon Accounting
AI is changing carbon accounting in three practical ways, but it does not remove the need for judgment, controls and auditability.
Student workflow: load a company’s annual report, BRSR disclosure and sustainability report into NotebookLM, then ask it to extract Scope 1, Scope 2, baseline year, target year, main reduction levers and unclear assumptions. Use ChatGPT or Claude next to convert that into a two-minute interview answer. If you want to practise the conversation format, use AI as a mock interviewer and ask follow-up questions on boundary, data quality and target credibility.
AI can accelerate classification and drafting, but it cannot magically verify emission factors, supplier data or assurance evidence. In carbon accounting, explainability matters as much as speed.
Interview Relevance
“A manufacturing client wants to announce a net-zero target. How would you help them build a credible carbon accounting baseline and target?”
Use the phrase “decision-useful carbon accounting.” It signals that you understand this is not only reporting - it must guide capex, procurement, operations and supplier negotiations. The next step is learning decarbonisation levers, much like learning how to recommend cost reduction without killing growth.
Common Mistake
The most common mistake is jumping straight to “net zero” without defining scopes, baseline and data quality. It costs candidates because the answer sounds aspirational but not executable. One-line fix: always start with boundary → inventory → baseline → target → levers → governance.
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