By Nicky Sinker
With carbon accounting still a relatively new area of specialism, it is not surprising that we see a huge variation in the market in how carbon footprints are calculated. At Auditel we concentrate on using real activity data to calculate your Operational Carbon Footprint. But why is this so important?
Firstly, if you want to achieve Net Zero, you will not get there using spend-based data as that would involve a 90% reduction in your spend, which is not possible for the vast majority of organisations to achieve.
Secondly, and more importantly, without real activity data you do not have the information to make the correct business decisions. If, for example, you are using spend-based data you are driven to the cheapest, not the lowest emitting supplies. Real activity data helps you to identify priorities for carbon reduction activities as well as cost savings. Using this information gives you what you need to identify the levers for driving reductions in emissions.
For a number of businesses which have started their carbon footprint journey scope 1 and 2 will be based on activity data as the majority of the information is provided on your energy bills. However, scope 3 is the majority of an organisations’ carbon footprint. It is also the area which most organisations are currently focused on in terms of improving the coverage (ensuring all categories of emissions are included) and quality (moving away from spend-based/benchmark data to real activity date) of information. This is particularly the case for supply chain emissions, but also business travel and employee commuting and homeworking emissions.
Using your data to drive change
Your journey to net zero is a long-term one, it is not something that most organisations will achieve within the next five years. That means that you can use the data to map out your reduction journey over time. In the first year, you can therefore concentrate on actions which are quick wins (reduce emissions, do not cost money and are easy to implement) or which save you money. These savings can be used to invest in longer term actions to reduce your emissions.
But what actions can you take to reduce not just your emissions, but also costs? The actions will vary by business but some examples are:
- Adopt the principles of reduce, reuse, recycle:
- Do not buy certain items. The easiest way to reduce your emissions and costs is to stop buying things which are not really needed for your business, such as paper (moving to digital), branded merchandise, or magazine subscriptions.
- When you do buy things, ensure they are not single-use. For example, move away from disposable cups, cutlery and crockery in your offices to reusable alternatives.
- When things have come to the end of their useful life within your office, recycle them. There are so many different options for this, not just ensuring that items are not going into general waste. You can also donate to schools and charities or give IT equipment to providers who can remanufacture them to extend their lifecycle.
- Consolidate supplies (for example, rather than purchasing different stationery supplies from two different companies, consolidate into one provider for all stationery which reduces the number of deliveries and often gives you better pricing).
- Turn things off when not in use. Depending on your equipment, you will be using huge amounts of power even when things are on standby. Make sure monitors, printers, lights etc are off when not in use. Motion-sensor lighting and auditing settings on equipment are easy ways to achieve this. Communicating with employees to change their behaviour at work and at home to reduce bills is also key.
- Reduce business travel through a sustainable travel policy, this will include not just reducing travel but also moving to green forms of transport which are often cheaper e.g. taking public transport rather than a taxi, using video conferencing rather than travelling unless absolutely necessary.
- Monitor occupancy and usage. With ways of work changing since the Covid pandemic, offices and equipment are often not utilised as much as they used to be. Monitoring usage and making adjustments is therefore an easy way to reduce costs and emissions. For example, many organisations have made significant reductions in the number of printers they have in their office, or have looked to have only one area in the office open on low occupancy days. This brings the added benefit of colleagues interacting with teams they wouldn’t normally sit in close proximity to.
Additional considerations
In calculating your carbon footprint it is important to be clear about what you are covering: the boundary of your footprint. Without this, the data is meaningless and decision-makers who are using the information will not know what it includes. Some key elements to consider:
- Which organisational unit is the information covering, one entity or the whole company group (including branches and subsidiaries), for example?
- Are there any gaps? For example, certain data sources which are not currently available (information from employee expenses or a significant supplier)?
- Are all the scopes and categories covered or are there some which are to be calculated in future years as you improve the data collection?
Alongside your carbon reduction journey you will be working on improving the data for your carbon footprint over time. This can involve moving to a new employee expenses platform which enables the capture of activity data required for your carbon footprint calculation, or enabling new fields in your current system. It could involve enhancing your existing process (moving to a new firmwide travel provider for example). This data improvement process will often result in the re-baselining of your previous year’s carbon footprint calculations. This is important to ensure that your trajectory as an organisation is accurate over time.
Concluding remarks
No data is perfect, but do not let the pursuit of perfection prevent you from starting your carbon reduction journey. By obtaining activity data which is available and putting in place a data improvement plan alongside your carbon reduction plan you can improve the quality of your carbon footprint over time while starting your journey to Net Zero.
Understanding the carbon footprint of your organisation and reducing your emissions over time are critical business activities, not just to ensure you meet the requirements of evolving ESG regulations, but also to meet the expectations of your clients and employees, It will also drive efficiencies in your business and minimise risks. The most carbon efficient businesses are also very efficient businesses and therefore the annual process of measuring your emissions and reducing your carbon are key aspects of operational resilience and success.
