Do you understand your carbon commitment?

Richard Shaw, director at GenNorth
X The Business Desk

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Organisations should be encouraged to set ambitious carbon reduction targets but need to understand their starting point before so doing says Richard Shaw, Director at GenNorth.

Although already very much to the front of mind for business leaders’ and the public at large, the recent COP26 conference in Glasgow has added additional focus and scrutiny around how organisations are approaching carbon reduction and the wider sustainability agenda.

Net Zero is a term that is regularly banded around but what does it actually mean and how can an organisation achieve it? Net zero carbon and carbon neutral are very different standards which require different approaches and very different budgets to achieve. Before making specific commitments, Boards should understand the implications of their stated ambition.

‘Net zero’ is when activities to reduce carbon emissions are paired with sequestration (tree planting, carbon capture and storage, etc.) to balance them to zero. This applies to both the embodied carbon in the materials and products included in the construction and operation of the buildings together with ongoing energy use.

According to the GHG (Greenhouse Gas) Protocol corporate standard, a company’s greenhouse gas emissions are classified in three scopes. Scope 1 and 2 cover an organisation’s direct emissions and indirect emissions from the generation of purchased energy respectively, whereas Scope 3 covers the supply chain and it is this element that is hardest to measure.

Strong leadership, commitment and an ambition achieve a meaningful reduction are key to success together with a realistic set of science-based targets which are critical to a credible approach and which may even become a legislative requirement for large organisations in the not too distant future.

Before setting any targets, there are two key questions a Board should ask itself:-

  1. Why are we doing this? Are these targets primarily for marketing purposes and to provide a perceived competitive advantage or is this something we really believe in and intend to drive throughout our organisation? The answer might seem obvious but when the commercial implications of the latter option kick in, the decision is likely to be tested!
  2. What kind of an organisation are we? Do we have a large property portfolio, a large workforce and complex supply chain? If so, then level of assessment needed to establish the baseline and the level of intervention needed to reduce it will be proportionately higher than a relatively simple organisation operating from a small number of buildings.

The next step is to understand your starting point. Surprisingly few organisations measure their carbon baseline but is not possible to set a valid target without a legitimate starting point. A net zero (science-based) target requires a baseline, as does a weaker incremental year on year target.

There are an ever-increasing number of free and low cost online carbon measurement tools which can be an excellent resource, particularly for organisations with small property portfolios. For more complex organisations and those that have a genuine focus on reducing their carbon footprint, these tools may still have their place but need to be supplemented by specialist expertise to aid in establishing robust science-based targets with appropriate boundaries, to analyse the data and to account for the nuances that make every organisation different.

Engaging with a relatively modest amount of specialist expertise in property and sustainability can provide an organisation with a robust carbon baseline. It can also help set a clear strategy for reduction centred on challenging but deliverable targets. These will assist in providing real credibility to support engagement with customers, colleagues and wider stakeholders which, in turn, may provide competitive advantage.

Professor Simon Pringle, an Associate Fellow at Chatham House and Managing Director of specialist management consultancy, Project Rome agrees ‘The are some fantastic examples of organisations that really understand their own carbon footprint and that are proactively working toward materially reducing their impact. Whilst this is encouraging we have a long way to go to address the climate emergency with the urgency that it demands. We need to be working from a common understanding and a position of transparency in order to drive real change at scale.’

The Climate Action Plan that was recently published by the Yorkshire and Humber Climate Commission also supports this approach through its Framework for Change and in particular its stated action to ‘Rethink Progress’ through comprehensive measurement.

The drive towards a reduction in carbon across the full spectrum of public and private sector organisations is crucial for the UK to make process towards its 2050 Net Zero target and shorter-term ambitions whilst continuing to drive the economic prosperity of the nation. However, it is critical that this is based on a measurable and viable plan rooted in a valid understanding of the starting point.

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