Carbon Accounting & ESG Compliance (The "Green Ledger")

1. Goal: Turn Spend Data into Sustainability Data

Problem: Companies need to report Scope 3 Emissions (Supply Chain). Currently, this is an expensive consulting project done once a year using averages. Solution: Calculate carbon footprint bottom-up from every invoice line item in real-time.

2. Core Value Proposition

• Compliance: Ready for CSRD (EU) and SEC (US) climate disclosure rules.
• Granularity: "We spent 20 tons of CO2 on Shipping" vs "We spent $1M on Logistics".
• Actionable: Identify high-carbon vendors and switch.

3. Methodology & Data Sources

Data Sources (External)

• Spend-Based Factors: EXIOBASE, USEEIO (Environmentally Extended Input-Output models). These map "Industry Sector" to "kg CO2e per $".
• Activity-Based Factors: EPA (US), DEFRA (UK), ADEME (France). These map "kWh", "Liters", "km" to CO2e.
• Supplier-Specific: CDP (Carbon Disclosure Project) API. If a vendor reports their own verified emissions, we use that specific factor.

Data Requirements (Internal - on the Invoice)

• Spend-Based (Minimum):
  • Vendor Name (to map to Industry).
  • Total Amount & Currency.
  • GL Category (e.g. "Software", "Travel").
• Activity-Based (Ideal):
  • Unit of Measure: (kWh, Liters, kg, miles).
  • Quantity: (e.g., 500).
  • Origin/Destination: (for Logistics/Travel).
  • Gap: If the invoice only says "Services", we cannot do activity-based. We fallback to spend-based.

4. Data Model

CarbonEmissionEntry

• emission_id
• invoice_line_id
• scope: SCOPE_1 (Direct) | SCOPE_2 (Energy) | SCOPE_3 (Supply Chain)
• methodology: SPEND_BASED | ACTIVITY_BASED | VENDOR_REPORTED
• co2e_kg: The calculated amount.
• factor_source: e.g., "EPA 2024", "Exiobase", "DEFRA".

5. UX/UI: The ESG Dashboard

• "The Footprint" Graph: Monthly CO2e emissions trend.
• "Top Polluters": List of vendors contributing most to Scope 3.
• "Intensity Metric": CO2e per $ of Revenue (Efficiency).

6. Integration

• Inputs: Invoice Line Items, Public Emission Factor Databases (API).
• Outputs: ESG Report Export (PDF/CSV) for Annual Report.