We all know that reducing your company carbon footprint is good for our planet and the temptation can be just to get started with doing things, but you won’t realise all the business benefits of reducing your footprint unless you measure it first. Why? Because ‘your’ carbon footprint is not just yours, it is also someone else’s. Let me explain:
When we think of a company carbon footprint, we often think of the direct emission sources - the lighting and heating used in your offices, fuel used for transport in company vehicles and for manufacturers, other fuels used to produce their goods. These types of emissions are known as a company’s ‘scope 1 and 2 emissions’.
But there are also a large number of indirect emissions (known as ‘scope 3 emissions’) that fall into your company’s footprint. These include things like emissions from waste and employee commuting, but importantly, they also include emissions from ‘purchased goods and services’, which in layman’s terms are the emissions associated with the production and delivery of everything that your company buys, from the laptop/mobile you’re reading this blog from, to the carbon emissions produced by your accountant.
What this means is that every individual company’s footprint forms part of a bigger chain of company footprints, much like in a food chain. It’s because of this that there are three main benefits from measuring your GHG emissions now.
1. You can help your customers and investors to measure their carbon footprint.
Customers are responsible for the carbon emissions of the products/services they buy from you, and investors (if applicable) are responsible for the carbon emissions of your business, proportionate to the size of their investment. For both large companies and investors there are regulatory drivers requiring them to report their GHG emissions, including those of their supply chain. They can measure these without your input, by using what is known as industry emission factors and the spend based method, but this is not very accurate and makes it difficult for them to reduce their emissions (you can read more about this here). If you are one of the companies able to provide them with information on your carbon footprint you will help them with their carbon reporting, providing extra value to them that they may/may not get from your competitors.
2. You can help your customers and investors to reduce their carbon footprint.
In a similar vein to the above, customers and investors can only demonstrate that they have reduced their supply chain/portfolio emissions if they have two sets of data from their supplier/portfolio company – the emissions starting point (known as the baseline) and current performance. If you implement reduction measures before establishing your baseline, your reported numbers, and those that your customers and/or investors get to report, will not show any emission reduction. You will have done right by the planet, but you won’t be able to externally demonstrate this. Measuring emissions first negates this issue.
3. The sooner you start to measure carbon emissions the easier they are to reduce.
Of course the old adage of, ‘what gets measured gets managed’ applies here but there is also something else at play. We know that the easiest ways to reduce GHG emissions are the ones that companies implement first – the ‘quick-wins’ such as switching to renewable energy and using technology already available such as electric cars – and that the rate of emission reduction gets harder, and thus slower, over time. As your company carbon footprint is related to that of other companies, if you start measuring your emissions now, you can benefit from high rates of emission reduction by other companies during this initial phase of quick-wins. For example, your company emissions will reduce as your car fleet becomes more efficient (even new petrol/diesel vehicles are more efficient than older models), as your third party data centres installs solar panels and as the national grid decarbonises, all without you changing anything about the way you operate. If you don’t measure your emission first, none of these reductions get captured in your reported numbers.
Measuring GHG emissions can be readily done in-house for scope 1 and 2, but it does require some expert input (and likely some paid-for data sets) for scope 3. Contact us here to find out how Rawstone can help you measure your company’s GHG emissions.
Authored by Caroline Johnstone.