Accounting for Carbon

Many productions in Canada are now required to submit a carbon footprint report. Understanding the basics of carbon accounting and how it can be used to reduce emissions is a key part of a producer’s and accountant’s responsibilities.

All productions* should plan to measure their carbon footprint as a minimum climate action standard. We recommend that all producers make this a mandatory action in all Green Production Plans.

If you repeatedly make similar content (e.g.: a TV series), your first footprint (on a season or episode) can be a useful baseline that will help you identify areas for improvement and track your progress over time. It’s through this measuring and reviewing that you will become comfortable, familiar, and eventually, expert at assessing your production’s sustainability efforts.

*In some cases, animation studios or others may find it more productive and realistic to measure their annual studio footprint.

What is Carbon Accounting?

Carbon accounting, aka “measuring your carbon footprint”, is a new field that is essential in the fight against climate change. Put simply, it is the quantification of the greenhouse gases emitted as a result of the organization’s operations, or a project’s production process.

Unlike financial accounting, which measures the financial impact of a project - carbon accounting measures the climate impact of a production. Carbon accounting is the foundation of carbon reporting, carbon footprints, sustainability planning, and emissions reduction targets (like net zero).

What is a carbon footprint?

A carbon footprint is the output of the carbon accounting process. A carbon footprint represents the total of a company or individual production’s greenhouse gas emissions and serves as the basis for the producer’s emissions reductions goals and progress.

Several free industry specific calculators exist for producers to use, while some companies may wish to adopt enterprise level paid-tools depending on their reporting needs. The free tools available in the motion picture industry do a great job, but they may not be sufficient to measure all of your business activities, nor accurately capture all of the factors relevant to your activities. Publicly traded entities may need to plan for emissions reporting in line with the Greenhouse Gas Protocol Corporate Standards which may require a different set of tools.

How are emissions calculated?

Carbon emissions are calculated by multiplying a quantifiable business activity (number of flights, or an electric bill, for example) by an Emissions Factor (EF) or the average emissions generated by that activity. Emissions factors are frequently pulled from national databases, like the Department of Environment and Natural Resources in Canada or the Department for Energy Security and Net Zero (DEFRA) in the U.K. Emissions factors are updated frequently in line with current science. The key benefit of using a pre-made carbon calculator or carbon accounting system is that the complicated task of choosing emissions factors is done for you.

Emissions calculations usually fall into one of two categories:

Spend-based. Spend based calculations estimate emissions using the dollars spent on an activity or purchase (e.g.: the dollar amount of a gas or electricity bill).
Activity-Based. Activity based calculations use the metric from the activity itself to calculate emissions (the litres of fuel purchased or kWh used on an electricity bill.).

Activity-based calculations are almost always more accurate (and therefore useful) than spend-based estimates and should be the default where practical. Using spend-based carbon calculations is a perfectly acceptable method if activity-based data is unavailable.

Often the key to using activity-based calculations rests in the data your team is able to collect. It’s a near certainty that spend-based data will available as productions already track costs. However, new processes may need to be put in place in order to capture good activity-based data as it won’t be the default set up for most productions to capture it efficiently.

Measurement Timeline

By now you’ve heard us say ‘start early’ enough, but it bears repeating and applies particularly well to the subject of carbon accounting. Here is an overview of how you might expect a carbon accounting process to unfold over the course of a production:
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Soft-Prep & Pre-Production:

Schedule a kick off meeting with accounting, business affairs, coordinators and other departments as needed to define the footprint boundaries and timelines
Define what data is available and required for your measurement and assign responsibilities for collection. Set up a system for audit trails if required.
Choose a carbon calculator and set up templates and methodologies for data collection and recording.
Prepare a carbon budget and share with applicable teams.

Talk to departments about collecting and recording the data you need.

Production:

Check in mid-way into production to ensure data collection is being done properly and correct any issues.
Use carbon accounting templates or software to enter data as it’s ready to relieve the burden on teams during wrap.
Build in an approvals process for completed datasets to ensure there are no gaps or issues prior to entry into the carbon calculator.

Wrap:

Finish your draft carbon footprint and submit for final checks and approvals. Complete any audit trail requirements.
Tie carbon emissions with budget spends so that producers can connect climate action with upsides like budget-savings and production efficiencies.

Schedule a final wrap meeting to hand off datasets / responsibility for completing reporting and footprints. (e.g.: if data is not all available prior to crew wrap).
Compare your final footprint against your carbon budget, if available.

Creating a carbon accounting system

Setting up a good carbon accounting system can be tricky and take more time than you or your accountant would like. Even modest productions will find they need a dedicated staff member over several weeks to collect the data necessary for footprint calculations. Starting early and planning ahead are key strategies to make the process more manageable.

If your company is subject to regulatory or voluntary oversight (including all public companies, as well as many private corporations and any company considering an IPO or private equity investment), look for a climate accounting provider that routinely works with large, regulated companies and can provide the level of depth, granularity, and quality that regulators and investors require.

For the rest of us: most of the data required for a carbon calculation already exists in accounting records, such as the amount spent on fuel, or how many vehicles were rented, and so on. For the average production, the accounting, business affairs and sustainability teams should work closely together in pre-production to devise a process that works for them and the needs of production and any compliance requirements. Carbon tracking processes should be in place at the very start of prep or sooner. Building your carbon data-sets at the end of production will be far more onerous on the production teams who are already tired and trying to wrap, and result in a less accurate footprint.

“Collecting the right data was more complicated and time consuming than we expected. Using the calculators is the easy part! We spent a lot of time defining the scope of the data we’d need and created templates for production footprints and our studios and corporate operations. We worked closely with our accounting teams to create a system that integrated with our accounting software (tags, extra fields) which saves a lot of time and doesn’t put as much pressure on the accounting teams when they’re at their busiest.”

Marsha Newbery

VP Sustainability & Business Affairs, Thunderbird Entertainment