Climate change is an issue of critical importance to business. Many companies are seeking to manage their exposure to climate risks and exploit the growing opportunities through developing a strategic carbon management strategy. It is often difficult to decide how to prioritise actions and to assess which approaches provide the best environmental and financial outcomes.

EPA has developed carbon management principles (the principles) to provide a step-by-step framework that organisations can use to drive good environmental and business outcomes. The principles reflect a continuous improvement model. Regular review is essential to ensure you make the most of new practices and technologies as they emerge over time. 


You can’t manage what you can’t measure — what are you emitting?

The first step in managing carbon emissions is to develop a greenhouse gas (GHG) inventory to measure your carbon footprint. Your carbon footprint is the total set of GHG emissions caused directly and indirectly by your business. Understanding your carbon footprint will help you identify your major sources of GHG emissions, and manage and reduce them over time.

Best practice carbon footprint measurement can be made using the World Resources Institute/World Business Council for Sustainable Development's Greenhouse gas protocol corporate accounting and reporting standard.

It is best practice to have your inventory verified by an independent third party, to ensure reliability and confidence in the data. An increasing number of companies are publicly reporting their GHG emissions to demonstrate transparency.

Set objectives

What do you want to achieve?

A key step in your carbon management strategy is to set goals or targets to manage GHG emissions.

Develop your goals by assessing the carbon risks and opportunities for your business. This will give you a starting point on what goals are appropriate for you.

Set clear and measurable short or long-term goals in line with your company’s strategic objectives. Use your emissions inventory to report and track progress towards your goals.

Compare your emissions profile to others in your industry sector. Benchmarking will help you identify best practice and provide the opportunity to strategically position your company as a leader on climate change.


Can you avoid generating emissions?

The best way to reduce your carbon impact is to avoid generating GHG emissions directly from your site and indirectly from energy use. Avoiding GHG emissions also helps minimise other environmental impacts and reduce energy and other resource costs. It also may help to reduce carbon exposure and business risk.

You may be using energy or emitting GHGs unnecessarily. Look for opportunities to turn off equipment when it is not in use. Consider walking instead of driving, and videoconferencing rather than travelling to meetings.

Reduce (modify–recover)

Can you change your activities to reduce emissions?

After measuring your carbon footprint and determining objectives, identify actions that can reduce your GHG emissions. Steps that reduce emissions while reducing costs can be found in most areas of operations, from building design to employee behaviour.

Your approach to emissions reduction will depend on your circumstances. Modify processes or equipment to ensure they run efficiently. When buying new equipment look for high efficiency ratings. Recover energy or GHG emissions from a pre-existing process. For example, reuse heat for co-generation or capture methane from landfills.

Switch (renew-exchange)

Can you switch energy sources so they are less greenhouse-intensive?

Look for opportunities to ensure that the primary energy source you are using is being delivered in the most GHG-efficient way. This can be delivered through renewable sources, or by exchanging fuel sources to minimise GHG intensity. The three primary areas are:

  • direct renewables, such as installing solar panels at your home, office or facility
  • purchased renewables from an accredited electricity retailers through the GreenPower scheme
  • exchange a fossil fuel energy source for one with a lower carbon content, e.g. switch from coal-fired electricity to natural gas.


Should you consider sequestering your emissions?

Another component of carbon management can be to reduce atmospheric GHG concentrations through natural or artificial GHG (usually carbon) sequestration.

Bio-sequestration is the natural absorption and storage of carbon by plants, and can be a business opportunity for farming enterprises. For most businesses, however, these projects will involve purchasing offset credits through offset providers. Carbon capture and storage (CCS), or geo-sequestration, involves direct capture of carbon dioxide from the combustion of fossil fuels or from industrial processes and the long-term storage of these emissions beneath the earth’s surface. This technology has not been applied commercially in Australia to date, but it is being tested at demonstration scales for application in the stationary energy sector.

While CCS also has the potential to be developed for other industrial processes that emit GHG gases, it is likely to have limited application in the short to medium term outside the stationary energy sector.


What are your residual GHG emissions? Determine whether you have reached your goal.

Now that you have gone through the process of reducing GHG emissions onsite and from activities associated with your business, refer back to your original objectives. If you are not meeting your objectives, there may be reduction opportunities you have not considered.


Can you offset your residual GHG emissions?

A carbon offset is any project that indirectly ‘reduces’ GHG emissions at one source by investing in GHG emissions reductions elsewhere. Offset products most typically involve projects that invest in renewable energy, energy efficiency and reforestation.

Offset credits should be purchased from an accredited offset scheme provider. Before purchasing carbon offsets, organisations should conduct appropriate research to ensure that products have been appropriately verified as delivering the environmental outcomes claimed. Key considerations when choosing offsets include:

  • additionality
  • permanence
  • leakage
  • double counting
  • timing of emissions reductions
  • monitoring and verification
  • co-benefits. 


What can you do differently?

Carbon management is not a static process. Regular review is essential to ensure you make the most of new practices and technologies as they emerge over time. Energy and other costs (including the cost of offsets) will change over time, needing regular review and continuous improvement of your carbon management strategy.

As the implementation of avoidance and reduction actions increases, the need to sequester or offset your GHG emissions should decrease, increasing environmental and business benefits with time.


How EPA manages our greenhouse gas emissions

Australia’s clean energy legislation 

National greenhouse accounts (NGA) factors (Department of Industry, Science, Energy and Resources)

Greenhouse gas protocol corporate accounting and reporting standard (World Resources Institute/World Business Council for Sustainable Development)


Australia's climate change strategies (Department of Industry, Science, Energy and Resources)

Read next

Lower your business's environmental impact

Improve your business's resource efficiency

Resource efficiency case studies

Voluntary environmental improvement plans


This page was copied from EPA's old website. It was last updated on 24 August 2017.

Reviewed 27 October 2020