Enabling carbon management - robust measurement and reporting
Expert comment by Gyles Scott-Hayward, Greenstone Carbon Management
Creating a carbon footprint report has become a commonplace activity for many businesses. It is increasingly expected that larger law firms will participate in voluntary carbon reporting initiatives, of which there are an ever growing number, including the likes of the Carbon Disclosure Project (CDP), and Global Reporting Initiative (GRI), as well as compliance reporting obligations, such as the CRC Energy Efficiency Scheme (CRC). Many companies - large and small - are finding they are also required to report their footprint when tendering for new business.
With increasingly complicated reporting methodologies coming into effect and carbon legislation for businesses looming, more sophisticated, and accurate methods of calculating a carbon footprint have come to the fore. Carbon accounting software has led to businesses engaging in their emissions in real time and in far greater depth. This has led to a greater appreciation and awareness among business leaders of the costs and perhaps more importantly the opportunities of successful carbon management. Businesses that develop a carbon management programme can reap a range of benefits.
Reducing your footprint is good for business
While businesses are becoming more carbon savvy, so are the media. With increasing carbon footprint reporting, there is growing scrutiny of progress in achieving real carbon reductions.
Businesses that are able to demonstrate such savings will be able to generate positive media coverage and enhance their brand perception. This is not only beneficial in terms of client interest, but is also increasingly important for the workforce. Companies that are able to demonstrate that they take these issues seriously make more attractive employers with greater staff morale.
In the current economic climate, companies are focused on increasing efficiencies and driving down costs. The use of energy and services such as travel and transport are typically the largest contributors to a company’s footprint, and often represent some of the most significant business costs. Developing ways to reduce these requirements and still operate a successful business, will consequently not only save money, but also reduce the company’s carbon footprint.
Preparation for legislation
If new tax structures or other costs are being applied in a region in which a company operates, they would of course be entirely prepared for the day they take effect. The same should be the case for carbon legislation, be it reporting structures, cap-and-trade markets or taxes. By putting in place a fully functioning carbon management strategy, companies are placing their business in a position to thrive in a tougher market. This, as we have mentioned, is not only achieved through measuring and reporting emissions, but also taking action to reduce them.
Business sense and climate sense
Moving beyond carbon reporting not only makes business sense by preparing for what is to come but also makes climate sense. In the same way that acting in 10 years time will cost the business financially through the ever increasing price of carbon, it too will cost the climate dear. This is because any greenhouse gases (GHGs) emitted into the atmosphere now will remain for many years. Carbon dioxide has an atmospheric lifetime of approximately 100 years, with other GHGs lasting for less time but having a more serious impact on warming. In addition to environmental concerns, a changing climate also poses serious future business risks as countries are forced to adapt to a changing climate in their infrastructure and delivery of key services.
Developing a climate strategy
The springboard for a climate strategy is the assessment of the company’s emissions profile, or carbon footprint. This is a basic level of carbon reporting but it is essential that it is accurate and extensive in order that a company can understand what kinds of direct and indirect GHG emissions are being created, from what sources, and in what quantities.
Having a clear appreciation of the business’ emissions profile means that risks posed by emissions from operations can be easily identified. From this position it is easy to establish what options are available for reducing emissions. From looking at the emissions profile low cost emissions reductions can be identified and implemented and may even be cost negative.
Setting goals and targets is often seen as one of the most important areas of a carbon strategy. These should be set over an appropriate time period and can be set as an efficiency or reduction target. Setting the right reduction target and monitoring progress towards it is essential. An ambitious target can be beneficial in inspiring action and encouraging creative thinking in finding new ways to reduce emissions.
But, the company must be careful to keep track of its performance. It is important to identify any issues early, while there is enough time to make changes to the strategy. If published targets are not met, it can not only demoralise staff, it can lead to negative media coverage and potentially accusations of ‘greenwash’.
Accurate forecasting is the future
As well as getting short-term forecasting right, it will be increasingly important for companies to develop accurate and achievable plans to consistently reduce their energy consumption and carbon emissions. This is extremely difficult to do unless companies are able to monitor their detailed energy usage over time and produce a meaningful analysis which can used to build models for emission reduction. This kind of functionality is built in to carbon accounting software, but is very complicated to replicate in a spreadsheet-based system. While many companies have seen the effect of carbon reporting legislation coming, and planned accordingly, many have yet to realise the associated risks that can be mitigated by developing a proactive carbon management programme.
Gyles Scott-Hayward is an analyst at Greenstone Carbon Management