In this expert Q&A, Osana, Principal Advisor of Audit & Assurance, demystifies the carbon audit process with clear, practical insights. In just 15 minutes, you’ll gain the clarity and confidence to approach your next audit with ease.
Key takeaways
A carbon audit is not a pass–fail test — it’s a structured review designed to build confidence in your emissions data. With the right preparation, it becomes a smooth and valuable process that strengthens your reporting, systems and strategy.
- A carbon audit checks that your data is complete, accurate, and well supported
- Good preparation throughout the year makes the audit faster and easier
- Clear documentation and traceable evidence are essential
- Early clarity on scope and expectations reduces delays and cost risk
- Most audit findings are preventable with simple internal checks
What do clients often get wrong about a carbon audit, and what’s actually involved?
I think one of the biggest misconceptions is that a carbon audit is a test where you either pass or fail. That can make the process feel intimidating, especially for clients going through it for the first time.
In reality, a carbon audit is a review of your emissions inventory, your methodology, your evidence, and the decisions you have made along the way. The purpose is to check that your carbon footprint is complete, accurate, well supported, and aligned with the relevant ISO standards and Toitū programme requirements.
It is also worth remembering that the first audit is often a learning exercise. Most organisations do not have everything perfect from day one, and that is completely normal. A good audit process helps identify where documentation can be clearer, where assumptions need to be better supported, and where systems or processes can be strengthened for the future.
There is usually some constructive engagement back and forth. That is not a bad thing. It is part of building confidence in the numbers and making sure the final verified position is credible.
Having said that, clients still play a very important role in preparing well. The more complete and organised the evidence is at the start, the smoother the audit tends to be. A well prepared audit is usually faster, less stressful, and more cost effective. It also gives clients practical insights they can use to improve their carbon management systems over time.
What does ‘being well‑prepared’ really look like from your point of view?
The best preparation happens throughout the year. It means you have been collecting evidence as you go, keeping records in a logical place, and sense checking the numbers before they are submitted. By the time the audit begins, you should have a good understanding of what sits behind your carbon inventory and why the numbers look the way they do.
For example, if your emissions have increased or decreased, you should be able to explain why. Is it linked to a reduction initiative? A change in operations? A new site, a new business activity, or an event that affected production, travel, freight, or energy use? Auditors do not just look at the final number. We also look at whether the story behind the number makes sense.
Practically, being prepared means you have:
- completed the pre-audit checklist,
- submitted your documentation to Toitū, and
- made sure your auditor has access to the right document storage.
Your evidence should be organised in a way that is easy to follow. Summary sheets are very helpful, but they should be supported by a clear breakdown of the numbers and the source documents behind them. If a figure has been used in a calculation, the auditor should be able to see where that input came from.
It helps to involve the right people across the business early. Carbon data often sits in different teams, such as finance, fleet, facilities, procurement, HR, travel, or operations. Bringing those people in well before the audit helps avoid delays later.
If some data is not available, do not leave that as a surprise for audit day. Let the auditor know early and discuss the best way to approach it. There is usually a practical way forward, but early visibility makes a big difference.
For site audits, preparation also means having a site plan or similar information ready, making sure key personnel are available to answer questions, and, where possible, booking a quiet room where the auditor can work.
In plain terms, a well-prepared client knows their data, knows where their evidence is, and can explain the main movements in their emissions. That makes the audit smoother, faster, and much less stressful for everyone involved.
Why do audit costs sometimes catch clients by surprise, and what can they do early on to avoid that?
Audit costs can become a surprise when the audit takes longer than expected, usually because the size and complexity of the inventory has changed from what the client anticipated. As an organisation’s carbon inventory expands, audit effort can increase too. For example, if you add more emissions sources, more sites, new business activities, additional data sets, or more complex calculations, there is simply more for the auditor to review. That does not mean anything has gone wrong. It just means the audit scope has grown, and the time needed to test and verify the information may also increase.
Another area that can affect audit costs is a change in sustainability personnel. If a new person has taken over responsibility for the inventory, and there is no documented process, standard operating procedure, or basis of preparation document explaining how the inventory was put together in previous years, they may naturally be less prepared. They may need extra time to understand past assumptions, data sources, calculation methods, and evidence trails. This can also create more audit questions, especially if the organisation relies heavily on knowledge held by one person rather than documented systems and processes.
Costs can also increase when evidence is missing, documents are difficult to follow, calculations do not clearly show how the final numbers were reached, or key people are not available to answer questions. In those situations, the auditor needs to spend more time working through the gaps and coming back with follow up questions.
From an auditor’s perspective, the biggest driver is usually the amount of time needed to get comfortable with the information. If the auditor has to keep asking for clarification, revised calculations, or additional documents, the process naturally takes longer.
The best way to avoid cost surprises is to get clear early.
Understand the scope of your inventory, what has changed since the previous year, and what evidence will be needed to support those changes. Use the pre-audit checklist, make sure your documentation is complete before the audit begins, and speak to your auditor early if there are areas of uncertainty, such as missing data, new emissions sources, new sites, changes in operations, changes in personnel, or assumptions you have had to make.
Clients can also help by presenting information in a logical way. A clear summary sheet, supported by the detailed breakdown and source evidence, makes a big difference. It means the auditor can follow the trail from the final number back to the original input without unnecessary back and forth.
In simple terms, audit cost is closely linked to audit readiness, audit complexity, and how well the organisation has documented its process. The better prepared you are, and the earlier you understand what has changed in your inventory, the smoother the audit is likely to be. That usually means fewer delays, fewer surprises, and a more cost effective process overall.
What are the most common gaps you see during audits — and which ones are actually the easiest to fix with the right preparation?
The most common gaps are usually not because clients have done anything deliberately wrong. They are often simple process, documentation, or sense checking issues that can be fixed with better preparation.
- One common issue is missing data. For example, a client may have 12 months of activity in the reporting year, but only 11 months of electricity, fuel, travel, freight, or waste data has been included. Missing months can be easy to overlook, especially when data is coming from different suppliers or internal teams.
- Another common gap is spreadsheet error. This can happen when a formula has been copied across cells incorrectly, a row has been missed, a cell is linked to the wrong source, or a manual adjustment has not flowed through the rest of the workbook. These errors are often easy to fix, but they can take time to find during the audit if the spreadsheet has not been reviewed properly beforehand.
- We also see issues with evidence trails. The final number may be included in the inventory, but it is not always clear where that number came from. A summary sheet is useful, but it needs to be supported by the underlying breakdown and source documents. The auditor should be able to follow the number from the inventory back to the original invoice, report, supplier statement, system extract, or calculation.
- Another area is the use of emission factors. Clients should make sure they are using the correct and most up to date emission factors for the reporting period and the relevant activity. Using outdated or incorrect factors can affect the final emissions result and may require corrections.
- Sometimes gaps also arise when changes are made during the audit, but the inventory report is not fully updated to reflect those corrections. This is especially important where the report discusses trends, reductions, base year movements, or changes in operational performance. If the numbers change, the commentary needs to be checked too, so the story remains accurate and consistent.
The easiest way to prevent many of these issues is to build in a review before the audit.
Ideally, someone who was not involved in preparing the data should check the workbook, formulas, months included, supporting documents, and key movements. A fresh set of eyes can pick up simple errors that the preparer may miss.
Even where the data process is automated, I would still recommend doing spot checks back to supporting documents. Automation is helpful, but it does not remove the need to confirm that the source data, mapping, formulas, and emission factors are working as intended.
In plain terms, many common audit findings are preventable. A good internal review, clear evidence trail, complete data set, and up to date emission factors can make a significant difference to the quality of the audit experience. It also helps clients feel more confident that their inventory is not only audit ready, but useful for decision making.
Auditor guidance can feel technical or overwhelming. If you had to explain your expectations in plain English, how would you put it?
Auditor guidance can feel technical because the audit itself is performed against technical ISO standards and Toitū programme requirements. That structure is important. It means every audit is assessed using the same standard, the same quality expectations, and the same level of professional judgement.
In plain English, I would say this: we are looking for a carbon inventory that is reasonable, complete, consistent, and clearly prepared. We want to understand the decisions behind the inventory, especially where judgement has been applied, and whether those decisions are appropriate for the organisation and the reporting period.
We are not expecting clients to become audit experts. What we do expect is that clients understand their own inventory, can explain the main movements in their emissions, and are open to discussing areas where assumptions, estimates, or changes have been made.
A good way to think about it is this: the audit is there to bring confidence to the final result. It helps confirm that the inventory has been prepared in line with the required standards and that the outcome is credible.
So while the standards behind the audit are technical, the practical expectation is much simpler: know your inventory, be ready to explain key decisions, and engage early if anything is unclear!
How does getting clear early — on scope, expectations, and evidence — change the experience of the audit for everyone involved
Getting clear early makes the audit feel much more manageable. When the scope is understood upfront, clients know what emissions sources, sites, activities, and reporting boundaries need to be covered. When expectations are clear, they know what level of preparation is needed and where judgement or assumptions may need to be explained. And when evidence is organised early, the auditor can work through the information more efficiently.
It also reduces surprises. If there are gaps in data, changes in operations, new emissions sources, or areas of uncertainty, these can be discussed before the audit rather than becoming issues during the audit.
For everyone involved, early clarity usually means fewer follow up questions, fewer delays, less rework, and better cost control. It creates a smoother process and gives clients more confidence that the audit is supporting the quality and credibility of their carbon inventory, rather than simply adding pressure at the end.
If you could give one piece of advice to a client ahead of their upcoming audit, what would make the biggest difference?
Come into the audit with a positive attitude, be well prepared, and be open to learning from the experience.
A carbon audit is not just a compliance step. It is an opportunity to strengthen your systems, improve the quality of your data, and build confidence in your carbon inventory. The more prepared you are, the easier it is for the auditor to understand your approach and focus on the areas that matter most.
It also helps to approach the process as a constructive conversation. There may be questions, clarifications, or corrections along the way, and that is normal. Those discussions are often where the most useful insights come from.
My advice would be to treat the audit as part of your improvement journey, not just something to get through. Good preparation, an open mindset, and a willingness to engage with the process can make the audit smoother, more valuable, and more positive for everyone involved.
The result is credible carbon data with real business value. It gives you a clear view of where your emissions are coming from, supports better decision-making, and puts you in a stronger position when responding to stakeholders. Verified data also enables more effective reduction planning and helps demonstrate progress over time. It’s important work that can ultimately reduce costs, minimise business risk, and strengthen long-term resilience.