What to expect from a third-party carbon audit

Once you’re familiar with the definitions relevant to a carbon audit of greenhouse gas (GHG) inventories, you can dive deeper into what to expect from the carbon audit process as a whole.

In this article, we’ll cover how to prepare for a smooth carbon audit and how Sustain.Life helps streamline your emissions audit from start to finish so you can focus on emissions reduction strategies.

What’s the point of a carbon audit?

The point of a carbon audit—and, furthermore, GHG assurance—is to demonstrate accountability and transparency.

If you do an audit of your company’s GHG emissions inventory, that audit can be assured by a third party. Why? A third-party carbon audit gives internal and external stakeholders confidence that the inventory is accurate, reliable, and prepared in accordance with recognized reporting standards and guidelines, like the Greenhouse Gas Protocol Corporate Standard. Assurances also build trust in an organization’s ability and commitment to making a positive environmental impact on climate change by managing and reducing its greenhouse gas emissions.

RELATED: Emissions auditing and verification for third-party GHG assurance

What to expect from a third-party carbon audit

The first thing to know about third-party carbon auditors is that they typically will only be able to audit according to the standards they’re familiar with or trained on. Some of the most common assurance standards include AICPA, ISO 14064, and ISAE 3000.

While these standards may vary in requirements and rigor, they will all adhere to a similar process that includes the following:

1. Planning – The auditor and client agree on the scope and objectives of verification (for example, an audit of the company’s indirect emissions) and develop a plan that outlines the activities and timelines for the verification process.
2. Data collection and analysis – The auditor collects and analyzes data from the client’s GHG inventory to ensure that it is accurate and complete and has been prepared following recognized standards and guidelines. For example, Sustain.Life is tailor-made to act as both a company’s carbon footprint calculation engine and the storehouse for any associated underlying data.
3. On-site assessment (reasonable assurance only) – The auditor conducts an on-site assessment of client data collection and reporting processes to ensure they are reliable and accurate.
4. Report preparation – The auditor prepares a report with a “statement of limited/reasonable assurance” that documents the results of the verification process, including any findings or recommendations for improvement.
5. Follow-up – The client implements any recommendations for improvement, and the auditor may conduct a follow-up verification to ensure improvements.

The entire process, excluding the contracting phase, can take anywhere from 4–20 weeks, with typical engagements often lasting 10–12 weeks. Auditors commonly request weekly or bi-weekly meetings to ensure steady progress and that both parties adhere to timelines. Know that these meetings are meant to help you improve your emissions inventory and processes and are not intended to be “gotcha” moments.

Four issues associated with third-party carbon emissions audits

Your third-party carbon auditor will typically keep an “issues log” during their review. This is where they document any findings that need to be addressed by your organization. An emissions inventory review can uncover four typical issues:

1. Material – These findings indicate either a calculation mistake or an incongruence with GHG Protocol or other recognized frameworks—for example, inputting the wrong unit of measure for an emissions source. This finding will require corrective action on your part before completing the audit process.  
2. Explanatory – This finding usually results from a lack of background context from the auditing team. If they have little or no experience with your organizational model or industry, they may not understand why a specific decision was made and seek clarification. After explaining the decision-making process to the auditor, this finding could become material, result in a satisfactory justification, or be noted as a future improvement.
3. Additional data – This finding occurs when a particular data source is unavailable or incomplete. An auditor may request additional documentation to prevent a material finding that requires a change in carbon footprint inventory calculations. Two common examples of this type of request include:
   – Missing bills from office energy consumption used in your calculations.
   – A renewable energy certificate (REC) provided as evidence covers only a partial year when full-year coverage was included in your inventory. ‍
4. Future improvement – These findings, while not material, may be raised by the auditor to make you aware of an instance that could more closely align with the GHG Protocol. Auditors will typically inform you of issues that can be addressed in a future inventory.

Knowing the types of findings that auditors will note will help you better prepare before the process begins.

How to prepare for a third-party audit of your GHG emissions inventory

With proper preparation, an audit of your emissions inventory will be much easier, both for you and your collaborators.

Here are three key activities to ensure the process runs as smoothly as possible:

1. Gather and organize your data – Auditors will request samples of underlying data and sources used to develop your emissions inventory, including monthly utility bills, fuel receipts, or spending data from your accounting department. Make sure you have documentation for each emission source readily available—and that it’s organized—to ensure timely responses to requests from auditors. Sustain.Life allows you to upload supporting documentation and link it directly to the emission calculation, providing a one-stop shop for you and your auditor during the verification process.
2. Develop a methodology document – Also referred to as an inventory management plan (IMP) or basis of preparation, this document outlines the steps taken during the inventory process, including where different datasets came from, what estimation methods were employed and details about decisions. Sustain.Life’s audit and verification features expose the emission factors, dataset resources, and calculation pathways for emission figures, streamlining the quantitative portion of the IMP.  
3. Conduct an internal audit – Reviewing all aspects of your GHG inventory can be invaluable. However, it’s time- and resource-intense to catch and correct common mistakes like incomplete data or incorrect measurement conversions before the audit process begins. Sustain.Life’s carbon footprint calculators and carbon accounting platform eliminates the risk of a human calculation error and automatically notifies users of any data gaps or missing documentation.  

Fortunately, Sustain.Life’s audit and verification features simplify the carbon audit process for clients and third-party auditors. Organizations get instant, organized access to the key data required for verification. Every emission source output is accompanied by source data, documentation, emissions factor, and calculation required by auditors, expediting the verification process. For auditors, there’s no more chasing down clients for supporting documentation from disparate systems and sources—they get full transparency in a comprehensive sustainability reporting software solution.