Download Managing your carbon footprint: choosing the right option for your

Managing your carbon footprint: choosing the right option for your
business
Jill Barker, EcoSecurities
Organisations across all sectors are realising the effects that climate change can have
on their business, and the importance of developing a robust carbon management
strategy.
Benefits of a carbon management strategy include:
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Cost savings: actions to reduce emissions often involve improved efficiency
Differentiation: addressing the environmental impact of your products/services
can provide a powerful means of making your brand stand out in a crowded
marketplace
Increased engagement: with both internal and external stakeholders i.e.
employees, customers, investors).
Increased public awareness of climate change: combined with increased
expectations of high Corporate Social Responsibility standards
Good preparation for impending regulation of GHG emissions
A carbon management strategy will depend on several factors:
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Size of business
Type of business
Budget available
Current or imminent carbon compliance regulations
Priorities of your shareholders and stakeholders
The bottom line for corporate strategy around climate-change risks and opportunities is
one of timing. When will the cost of carbon become financially material, and just how
material will it be?
Many companies face two very different risks:
- Being “too late” to respond, resulting in higher compliance costs and competitive
disadvantage
- Being “too early” to respond, risking the misallocation of limited funds and resources
Setting your goals
Regardless of which type of category your business falls into, it is essential to consider
the following areas when setting your carbon reduction goals:
• Any deployment of a carbon management strategy should be undertaken as part of a
longer term strategy to ultimately drive down your organisational impact year on year –
any initial stakeholder engagement you achieve will be lost if you cannot demonstrate
ongoing commitment and real reductions.
• Are you aware of all the options available to you, from how you can significantly reduce
your footprint, to choosing the right projects to offset your residual emissions? Many
multinational organisations are not fully aware of the range of opportunities to develop
emission reduction projects within their own operations.
• How ambitious do you want to be? Do you want to simply comply with industry
regulation or be a pioneer in your industry? Is your goal to be carbon neutral? Your
ambition levels will determine what kind of elements your carbon management strategy
should contain, and what weight will be given to internal abatement measures and the
use of carbon offsets from external projects.
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What is most important to your stakeholders? What do they want to know
concerning an organisation’s environmental policies? Identify what is most
relevant to your key stakeholder groups (employees, customers, investors,
partners etc.) to ensure that your activities are applicable to your target audience.
• Have you performed adequate due diligence regarding the array of carbon related
products and services on the market? Unlike the compliance market, the voluntary
carbon market, which includes companies who measure their carbon footprint and
voluntarily offset their emissions, is not regulated by any one body and there are various
carbon offset standards in use. Therefore, it is vital that you partner with a supplier which
has credible experience – the recent ENDS Guide to Carbon Offsets 2008 recently rated
170 carbon offset providers worldwide, to create a comprehensive directory of the Top
30.
Furthermore, you are more likely to achieve your carbon reduction goals if you ensure
that:
• Your stakeholders and senior managers have a long term desire to promote and
prioritise the issue of sustainability throughout your business operations
• Your goals are flexible and can adapt to internal and external developments i.e.
changes in legislation, competitor activity, changes in the economy
• You select a choice of emission reduction activities that complement each other and
are appropriate and supportive in achieving your corporate objectives
• Your goals align with the culture and brand values of your organisation – for example,
Ben & Jerry’s “Lick Global Warming” and “Carbon Neutral from Cow to Cone” campaign,
and their climate “hoofprint”.
• You communicate your goals clearly and accurately both internally and externally
• You engage with, and encourage buy-in from your employees by implementing
appropriate educational and awareness raising activities
• You reinforce and reward sustained behavioural change
• You measure and track the impact or your activities on sales performance, market
share and shareholder value
Assessing your carbon footprint
A GHG footprint is often a necessary first step on the way towards broader carbon
management and mitigation strategies.
Which footprint do you need?
Corporate GHG footprints can simply inform management, set the stage for identifying
emission reduction opportunities, or establish a baseline against which to measure GHG
emissions reduction commitments. Depending on a firm’s goals, and the characteristics
of the company in question, GHG footprints can be very straightforward for some
companies and very complex for others. Establishing the appropriate boundary for a
footprint is always a critical first step. As Clean Air Cool Planet’s recent report ‘Getting
to Zero: Defining Corporate Carbon Neutrality’ pointed out, determining where exactly a
company’s carbon responsibilities begin and end is not easy. Measuring emissions up
and down the value chain remains an inexact science, so transparency about what is
and is not covered in a footprint is essential.
Other key variables include: the industry sector, size and scope of operations,
information availability, how the footprint will used, what competitors are doing, and
available budget.
When choosing a footprint supplier, questions to ask yourself include, does their
approach demonstrate:
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A sufficiently broad footprint boundary?
A high level of accuracy and depth?
Adherence to internationally recognised standards and guidelines?
How to influence the quality
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Use accurate and verifiable data sources (bills, audited financial records)
Use a robust calculation method
Use internationally recognised emissions factors (WRI/WBCSD)
Facilitate third party auditing of footprint
Obtain external seal of approval
Choosing a credible strategy
Once an organisation has established its footprint, the next step surrounds the strategy
that should be used to reduce emissions. Many companies have adopted the concept of
a hierarchy of carbon reduction options in developing their carbon management
strategies.
Forum for the Future advocate the ARRO model:
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Avoidance of emissions
Reduction through energy efficiency
Replacement of high-carbon energy sources
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Use of high-quality Offsets
Most carbon strategists would agree that the main emphasis within a credible carbon
management strategy must be on avoidance, reduction and replacement options, which
must be exhausted before offsetting is used to neutralise any unavoidable emissions.
Reducing your emissions
Taking steps to reduce your internal carbon footprint can provide multiple benefits:
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Some measures are very low cost and can actually save your company money in
the long-term
Active steps to reduce internal emissions can help forestall less cost-effective
regulatory measures
Reducing your operational emissions shows your employees, customers,
investors and stakeholders that you are serious about reducing your
environmental impact
Identifying the main sources of your company's carbon emissions can offer a wide range
of opportunities for reducing your carbon footprint in the context of your business
strategy and operational profile – including energy sourcing, travel, supply chain logistics
and procurement.
Offsetting
Once internal measures have been implemented, external measures can be considered.
Offsets from external projects worldwide can be used to cost effectively balance your
carbon footprint, as they can offset the emissions that you currently cannot reduce by
internal abatement measures alone. Carbon offsets are generated as the result of a
greenhouse gas emission reduction project, located anywhere in the world, delivering
measurable reductions in emissions through a variety of technologies, including
renewable energy, waste gas to energy and forestry. The projects create emission
reductions by displacing more fossil fuel intensive activities or by reducing the direct
release of GHG into the atmosphere.
Why offset?
Factors which lead many companies to offset include:
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Commitment to employees, stakeholders and customers to reduce emissions or
become carbon neutral
Preparation for impending emissions regulation
As part of a new carbon neutral product offering
As part of a CSR policy focusing on environmental impact improvement
Need to promote brand recognition/differentiation
Positioning your company as a climate leader
Offsetting allows companies to address their environmental impact quickly – whereas
internal abatement measures often require the development of new technology or
operational processes which can take time. However, when dealing with offsets, it is
imperative that companies take the high road and pursue offsets with integrity that have
been subjected to rigorous third party monitoring and verification procedures.
How can you ensure quality?
Make sure that offsets have been developed under recognised Voluntary Standards:
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Gold Standard, VCS, VCS2007, CCAR,VER+
Pre-registration CDM VERs (generated from Kyoto projects prior to registration
point)
Make sure you research offset providers’ reputation within the market, considering the
following:
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Track record in the market – ask for testimonials and case studies
Experience dealing with additionality (the concept which ensures that reductions
would not have been made without investment from projected offset sales)
Delivery risks: if you are buying forward what assurance can the provider give
regarding delivery?
Employee and customer engagement
Underpinning any successful climate change mitigation strategy is the need to fully
engage both internal and external stakeholders, including employees, investors and
customers. The cornerstone to this process is the effective planning and deployment of
an integrated communications strategy, which delivers meaningful and relevant
messages which reflect the brand values and culture of your organisation.
EcoSecurities top tips for climate change communication with stakeholders:
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Be open, honest and transparent. Be clear about your motivations and ensure
they will stand up to scrutiny. Every claim should be backed up by easily
accessible information.
Make sure your company’s green messages effectively filter from board level to
front line staff.
Educate employees and stimulate behaviour changes to guarantee buy-in and
ensure employees are communicating your green business values appropriately
Ensure that the messages conveyed to your stakeholders and employees are
coherent and that your internal and external faces are aligned.
Examine your customer base: what environmental issues are important to your
customers today, and how has their environmental behaviour changed over
time?
Reduce the ‘gap’ between what environmental messages consumers expect and
what companies provide: apply your consumer knowledge to create messages
that grab the attention of your target audiences.
Be consistent, coherent and holistic – eliminate contradictory signals.
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Make it simple and easy for consumers, understand their level of knowledge and
avoid jargon - speak a language that stakeholders will understand to add value to
your brand and environmental efforts.
Get the channel (or mix of channels) and the timing right. Utilise the expertise
held across the business on what will appeal to customers.
What green communications are going to stand out in a marketplace saturated
with green messages? Look at innovative tools to ensure your messages are
conveyed effectively e.g. StonyField Farm, a US organic dairy company include
green messages on their yoghurt cup lids.
Be in step with your consumers’ concerns or take them with you.
Useful links:
‘Getting to Zero: Defining Corporate Carbon Neutrality’
http://www.cleanair-coolplanet.org/
The ENDS Guide to Carbon Offsets 2008
http://www.endscarbonoffsets.com/
Jill Barker works in the Global Marketing Team at EcoSecurities, a leading climate
change services firm www.ecosecurities.com