Accounting for Climate Change: A Case Study. Extension of Existing Financial Infrastructure in an ERP System to Estimate, Determine, and Allocate GHG Emissions
The Paris Agreement of 2015 sends a clear message to decarbonize the economy to stop climate change and carbon accounting can play a key instrument in reducing the carbon footprint of companies. It can be helpful for the purpose of comparison between costs and emissions to base information about the latter on existing financial infrastructure. Enterprise resource planning systems (ERP systems) have been identified to provide much of the information which is required to calculate the carbon footprint of products on a larger scale. Despite the high potential of ERP Systems, neither a practical carbon accounting approach is directly implemented in an ERP system, nor an approach based on existing financial infrastructure. Therefore, a case study was conducted in an ERP system vendor to fill this gap. This qualitative exploratory research describes the extension of the preliminary and final costing in an ERP System with the goal to estimate respectively determine the emissions of products. The extension of financial accounting would enable storing of primary data of suppliers, which would offer the full functionality of cost center and cost object accounting for emissions. Additionally, if every link along the supply chain extended the financial accounting in the ERP system, only the direct emissions of each link must be calculated, which would increase the quality of the data as well as the accuracy of the calculation and additionally reduce the calculation effort.