Category Archives: Carbon Basics

Understanding and Protecting Our Coral Ecosystems

Climate change is one of the greatest global threats to coral reef ecosystems — corals die as temperatures rise and cause mass bleaching and outbreaks of infectious disease.

Already, almost 30% of the world’s reefs have been destroyed. The time to act is NOW. Check out this gorgeous infographic shared by Fix about corals and coral bleaching!


Source: Fix.com Blog

Carbon Footprints 101: Why Carbon Footprints Are Failing Us

Yesterday, in “Carbon Footprints 101”  we explored what carbon footprints are and their benefits. But today we’ll talk a bit about carbon footprints’ major shortcomings. We hope you will contribute to the discussion with your comments!

Problem #1. Categories and definitions are open-ended and flexible.

Conventionally, when we think about a carbon footprint, it conjures images of a company’s heating, electricity and travel.  These correspond loosely to the industry reporting framework of “Scope 1 and 2” (fuel you burn, or fuel that is burned to produce your electricity) with a little bit of Scope 3 sprinkled in (e.g. fuel needed for flights and other transportation).  These categories have flexible definitions, and are a very narrow subset of the full scope of emissions that a company enables, either through their own fuel consumption, or by creating the demand for fuel consumption among their suppliers.

 

What’s missing in most carbon footprints. Designed by Carbon Analytics. Please ask for permission before reproducing. info@co2analytics.com

 

While flexibility is usually a good thing, the industry standard reporting framework of “Scopes 1,2, and 3” act like buckets into which companies can pick and choose the activities they want to report. Often, information that is difficult to obtain is excluded — but this overlooks potentially huge emissions-savings! In general, most companies report only their Scopes 1 and 2, but leave out 3, where the majority of emissions actually live. A commonly accepted approach is to report employee travel in Scope 3, even though it should be reported in scope 1.

Sometimes, companies will tailor which activities they report in Scope 3, and may do so when expecting an upcoming decrease in emissions to cast their net improvement in a favourable light.

Problem #2. It doesn’t always lead to greater sustainability in practise.

While carbon footprinting does have huge potential to be a conversation-starter that can lead to improved environmental performance, without a way of identifying and acting on improvements, the change stops there. In the worst case, the footprint becomes just a number: footprints are reported and decrease, but companies actually conduct activities that are increasingly harmful, such as resource degradation and pollution. A company is seen to be doing its part, but doesn’t address broader environmental sustainability. One set of researchers concluded that “the carbon footprint is a poor representative of the environmental burden of products, and [that focusing on carbon footprinting exclusively] runs the risk of inadvertently shifting the problem to other environmental impacts”. (This paper is freely available on ResearchGate.)

Problem #3. Only the biggest companies are expected to use it.

Since the Greenhouse Gas Protocol was launched in 2001, carbon footprinting has been undertaken by thousands of businesses. Most of them are large companies, including many Fortune 500 companies. This is partly due to the fact that many big businesses are obliged to do carbon footprints in order to fulfill various reporting requirements (e.g. of climate change legislation such as EU ETS or CRC), to participate in carbon reporting initiatives such as the Carbon Disclosure Project (CDP), or to fulfill obligations as part of a corporate social responsibility (CSR) programme. This has created an environment where large companies are talking to other large companies, limiting more diverse participation in the process. As a result smaller companies aren’t taking advantage of huge cost savings and opportunities for optimization that come with carbon footprinting, because the process is “locked in” by still being part of a purely environmental space, but not a general business space.  Many business owners don’t realize that there is a whole additional set of tools they could be using to improve.

So where do we go from here?

We have two big ideas that we think can improve the concept and process of carbon footprinting. We won’t harp on them here — the point isn’t to advertise ourselves when you could simply check out our website.

These two ideas are:

  • Including scope 3 emissions in all measures of carbon footprinting — and making these measurements as clear, well-defined, and all-encompassing as possible.

  • Allowing small businesses to be part of the process.

What do you think? Do these suggestions make carbon footprints fool-proof? Or is carbon footprinting just more greenwash? Looking forward to hearing from you in the comments below!

 

For more general information on the definition of carbon footprints, scopes, etc, check out Carbon Trust’s Carbon Footprinting source.

Carbon footprints 101: Why they’re a great tool for any business

At Carbon Analytics, we think carbon footprints can change the world by making businesses more transparent and accountable to the effects they have upon the environment. But we also know that carbon footprints are not perfect and that some issues need to be addressed. Here we’ll see what carbon footprints do and what they offer. In another post — “Why Carbon Footprints Are Failing Us” — we’ll discuss the major shortcomings of carbon footprints and how they can be solved.

What is a carbon footprint?

A carbon footprint measures the greenhouse gas emissions caused by a person, organisation, or product. It is measured in units of tonnes of carbon dioxide equivalent (tCO2e), allowing different greenhouse gases to be compared. Carbon dioxide equivalent is based on the global warming potential of these greenhouse gases.

Six

Six greenhouse gases. From Earth Untouched.

 

Types of Carbon Footprinting

A footprint can measure the emissions of an organisation or a product. Organisational footprints show the emissions from all the activities of an organisation, such as the energy used to heat and cool offices, industrial processes, or company travel. Product activities show emissions over the whole life cycle of a product, from the extraction of raw materials to final disposal.

Here, we are going to focus on organisational footprints.

Scopes in Carbon Footprinting

The Greenhouse Gas Protocol is a widely used standard that sets out how to account for greenhouse gas emissions for organisations, splitting up emissions into three groups called “scopes”:

 

scopes.jpg

Scopes 1-3 in the Greenhouse Gas Protocol. Designed by Carbon Analytics. Please ask for permission before reproducing. info@co2analytics.com

 

Why bother? What are the benefits?

There are multiple benefits to getting a carbon footprint.

  • It’s a gateway to improvement.
    Reporting on carbon emissions can be the introduction to wider work to reduce carbon emissions. Putting a number to something often makes it easier to track progress compared to a benchmark, develop a plan, and hit targets over time. By quantifying your emissions, you can see how your organisation contributes to global emissions and what opportunities you have to reduce them.
    Beyond what happens within your four walls as an organization, a carbon footprint also shows you what’s happening within your supply chain.  Proactively managing impacts in your supply chain can help you build a more resilient business, and puts your purchasing power to positive use. Engaging your supply chain is also a great way to engage your employees – encouraging them to be on the look-out for more sustainable alternatives, or working together with suppliers to improve your footprint.
    Carbon footprinting can lead to unexpected insights and action. For example carbon footprinting analysis has generated global conversations around decreasing meat-eating over the past few years. While animal rights campaigns of the past three or four decades appealed to some, explaining the high carbon footprint of a meat-based diet has helped even more people make a change to lower meat consumption. (More info here and here.)

  • It starts conversations and builds awareness for your business.
    Talking about how to reduce a carbon footprint becomes part of a bigger conversation on environmental change-making and cost reduction. These conversations have the potential to have far reaching changes in the supply chain, as suppliers are engaged in not only improving their carbon footprint but helping them identify and eliminate inefficiencies in their own processes.

  • Reducing cost.
    Knowing where and how you spend energy can help you reduce costs. This is not necessarily limited to your electricity provider. Footprinting can also point to inefficiencies in the way a process is done, and can result in cost savings in waste and packaging as well.

  • Increasing brand value.
    Companies that measure their footprints increase their brand value, especially among eco-conscious customers and investors.

Carbon footprinting is a valuable exercise for companies to undertake, but the process has shortcomings and flaws that need to be overcome. Now check out our post “Why Carbon Footprints are Failing Us“!

 

For more general information on the definition of carbon footprints, scopes, etc, check out Carbon Trust’s Carbon Footprinting source.

 

Blurred Lines — How do we know when it’s corporate responsibility or greenwash?

The introductory paragraphs are NSFW if you click the videos. Otherwise SFW content!

Remember that song?

The internet and conversations exploded when it came out. Some people thought that the lines weren’t blurred at all, and that the song was plain rapey and misogynistic. This camp inspired the following excellent parodies:


Some people agreed that the song was indeed racy but liked the catchy tune and pointed out that it really wasn’t that much more misogynistic than most other pop songs — both lyrically and visually. Women’s rights had a lot further to go in 2014 and Robin Thicke wasn’t the only problem.

And many people didn’t see a problem with the song at all.

We have the same diversity when it comes to corporate social responsibility — big companies undertaking initiatives to show their concern for environmental and social issues. We have companies that generally do try to make a difference in the way they operate in order to promote better environmental practices. We have companies that are great at putting out a positive message but not so good at delivering on it. And we have companies that don’t think they are doing anything wrong.

So how do we sort out the “good guys” from the “bad guys”? Where do we draw the line?

The short answer is that the line will always be blurred. But here we hope to focus on a few positive examples that inspire us but also need to be questioned, and to share a few more examples that we think need some more thought on whether they are performing well.

Patagonia is a company well-known for its efforts in sustainability, from its famous “Don’t buy this jacket” ad. In this ad (below), the company admitted its own environmental failings and discouraged consumerism. Patagonia also set up its own system where its owns staff and an external auditor monitored the supply chain of their down from egg to slaughter. Patagonia iis a company that is well known and admired for its consistent efforts to reduce its environmental impacts by making durable, high-quality products that are monitored from cradle to gate and sometimes even beyond (in the case of recycling old jackets).

Patagonia’s 2011 ‘Black Friday’ ad in the New York Times.

IKEA is a complicated case. Steve Howard, the company’s head of sustainability, recently half-joked that the west had reached “peak home furninishings” as part of a more serious point that western consumption had resulted in global peak oil, meat, sugar, and other “stuff”. IKEA has also introduced a series of environmental policies over the past year, such as pledging to invest £755 m in renewable energies and helping poorer communities deal with climate change impacts; it has also pledged that all the energy used to power its shops and factories will come from clean sources by 2020. It missed its target by getting 70% of its energy from renewable sources by 2015 by only two months. However, the company made news in 2013 for using a whopping 1% of the world’s wood while at the same time setting a target to double its sales by 2020 — meaning more than doubling the volume of products its sells. Although IKEA has made some efforts to make its use of wood more sustainable — for example by using recycled materials or woods usually discarded — it bought an entire forest in Romania. There are huge issues with deforestation worldwide and in Europe, and in Romania in particular. The company seems likely to use this forest purely to increase the volume of available wood used to make furniture, and not to maintain the delicate ecological balance of the system or to maintain its biodiversity.*

A forest in Romania. Image by Horia Varlan, 2009.   goo.gl/QX91MJ. Creative Commons License 2.0.

A forest in Romania. Image by Horia Varlan, 2009.
goo.gl/QX91MJ. Creative Commons License 2.0.

Fossil fuel companies are notorious for attempting (and often failing) to engage with environmental concerns — this is difficult to do by the very nature of their environmentally harmful business. But these companies are also criticised for the great deal of deception inherent in many of their attempts at sustainability which, upon closer inspection, turn out to be greenwash. Many fossil fuel companies, such as Shell and Total, have built marketing campaigns based on their investments in renewable energy — but these investments usually turn out to be tiny, or do not develop into long-term or successful programs. Fossil fuel companies funded the recent climate talks in Paris (COP21), and came under fire for significantly skewing the discussion and outcome of the Sustainable Innovation Forum.

Photo used (with permission) from www.brandalism.org.uk

Photo used (with permission) from www.brandalism.org.uk

Photo used (with permission) from www.brandalism.org.uk

Photo used (with permission) from www.brandalism.org.uk

Photo used (with permission) from www.brandalism.org.uk

Photo used (with permission) from www.brandalism.org.uk

Many other, less obvious, examples of greenwash exist in abundance. In this short blog post we have tried to some black and white examples companies that are doing their best and those that are not. But very often it isn’t clear who are the “good guys” and who are the “bad guys”. It’s up to us to make sense of the blurred lines between corporate responsibility and greenwash.

* We are making this claim based on our general knowledge of corporate ecosystem management, but do not have proof or citations. We welcome commentary and information on this point.

Carbon Credits 101: What they are, why they’re controversial, and implications for COP 21

Climate change is now a common topic of conversation, and global society is realising that we need to incorporate climate and broader environmental issues into our social and economic systems.

One of the tools that has been used over the past couple of decades is that of carbon credits.

Understanding carbon credits is important because it is part of a global attempt to mitigate climate change by tieing the cause of the climate change — an economic system dependent on consumption — to reducing emissions. At the same time, the concept and use of carbon credits has come under a lot of scrutiny. The next climate conference–COP21 in Paris–is expected to drastically change the way this and other tools work.

Here’s your chance to finally understand all this business about carbon credits you may have heard floating around occasionally but never got around to getting to grips with!

Where did carbon credits come from?

Carbon credits were introduced under the Clean Development Mechanism (CDM) under the internationally-recognised Kyoto Protocol. The Protocol recognised that developed countries are principally responsible for the current high levels of GHG emissions that cause climate change, and thus placed a greater responsibility on them to address this problem. [4]

Under the mechanism, a country with an emission-reduction or -limitation commitment with the Protocol can implement an emission-reduction project in developing countries to compensate for an emission made elsewhere. These projects would earn saleable certified emission reduction (CER) credits (also called offsets).

What is a carbon credit?

A carbon credit is a financial investment that represents 1 tonne of CO2, or other greenhouse gases whose effects are equivalent to 1 tonne of CO2 (CO2e), that has been removed or reduced from the atmosphere under an emissions reduction project.

Carbon credits are associated with removing existing CO2/CO2e emissions (for example by planting trees) or by reducing future CO2/CO2e emissions by implementing renewable energy or energy efficiency projects that displace fossil-fuel powered generation production or industrial processes (e.g. by constructing a wind farm).  Each activity has a different “methodology” that accounts how much carbon is avoided.

How do carbon credits work?

There are several actors involved in creating a carbon offset project: there is a verification body that validates how many tonnes of CO2 a project avoids, the the registration body that operates the registry where a buyer can look up your projects, and the company that ultimately buys your credits. In general, to get carbon credits a business needs to calculate its carbon savings against a very specific methodology and get an official body to validate the project.

There is some strategy to the way businesses choose their methodologies, or how they assemble carbon-saving activities into verifiable carbon offset projects. A very “green” manufacturer may seem to be constantly coming up with new “projects” every time they make a batch of green goods that saves X amount of carbon.

What are the regulated markets and the voluntary markets?

In addition to the regulated markets under the Clean Development Mechanism and some regional compliance markets in the USA and Australia, there are voluntary markets and compliance schemes. One of the biggest is Verified Carbon Standard (VCS).

The voluntary markets allow individuals, companies, or non-profits to purchase carbon credits on a voluntary basis to satisfy personal or CSR objectives. As a company or non-profit getting carbon credits for the first time, it is generally easier to get credits on the voluntary market. This voluntary market operates similarly to eBay. [5] Unlike the regulated market, carbon credits on the voluntary market are not actively traded. [5]

As of January, the World Bank valued emissions trading at  $30 billion [6]. When including the voluntary market, carbon trading is worth more –about $176 billion in 2012 [6].

What are some of the problems with carbon credits?

The system of carbon credits has historically been criticised for being “essentially a 
permission slip with a cash value that allows a country or company to emit a certain amount of greenhouse gases” [6] and for promoting, rather than preventing, carbon-intensive industrial activities. The argument is that this allows rich countries to feel better about harmful behaviour, rather than encouraging governments to correct that behaviour [6]. Beneficiaries of the CDM included industrial gas producers (nitrous oxide, refrigeration gases) and dam construction projects. [2]

Carbon credits are also vulnerable to fraud, and are susceptible to not delivering on the promises of low emissions in the future [6,9]. This is largely due to the fact that carbon credits are fundamentally based on carbon, which is not really tangible/palpable.

In August 2015, a study from the Stockholm Environment Institute found that the majority of carbon credits generated by Russia and Ukraine did not represent cuts in emissions and that these credits may have actually increased emissions. [7,8]

For these reasons, credits have fallen in price over the past few years. [1] The European Union’s market, which used to be the main outlet for the Clean Development Mechanism, was restricted and then shut down. [2]

What does the COP21 — the climate talks in Paris — mean for carbon credits?

Over the years, the Clean Development Mechanism has been discussed and various amendments and solutions have been proposed. However, little progress has been achieved because positions on the issue are so radically discordant: while wealthy nations that are high emitters endorsed the continuation of market-based mechanisms, developing countries adopted divergent and contrasting stands. [1]

Some groups have suggested the creation of a “New Market Mechanism” (NMM), involving the implementation of sectorial and cross-sectorial measures, thus scaling up market-based mechanisms beyond project level activities. The USA and Japan have supported the “Framework for Various Approaches” (FVA), which aims at ensuring flexibility for Parties to create a set of components and rules that will ensure an individual crediting systems that helps fulfil internationally agreed targets. [1] Other groups have attempted to draw attention to a non-market GHG reduction solution in correlation with REDD. [1] None of these proposals have yet been able to gather broad consensus. [1]

The COP21 is expected to test business and government commitments to tackling climate change, and is seen as the last chance to come up with a deal to avert 2 degree warming that scientists say is the tipping point to irreversible fallout.

References

[1] “COP21 and the Clean Development Mechanism: Deciding the Future of International Carbon Credits.” Climate Policy Observer, 29 July 2015.

[2] Aline Robert (tr. Samuel White). “COP21 Will End a Decade of Failed Climate Finance.” EurActiv, 18 November 2015.

[3] Lauren Hepler, “COP21 and Decoding the Economics of Climate Change.” GreenBiz, 6 August 2015.

[4] “Kyoto Protocol.” United Nations Framework Convention on Climate Change (UNFCCC), n.d.

[5] Chris Lang. “Why You Should Not Buy Voluntary Carbon Credits as an Investment: A Carbon Trader Explains.” REDD Monitor. 22 April 2013.

[6] McKenzie, “The Hack That Warmed The World.” Foreign Policy, 30 January 2015.

[7] McGrath, M. “Carbon Credits Undercut Climate Change Actions Says Report.” BBC News, 25 August 2015.

[8] Arthur Nelsen, “Kyoto Protocol’s Carbon Credit Scheme ‘Increased Emissions by 600m Tonnes.” Guardian, 24 August 2015.

[9] Ryan Jacobs. “The Forest Mafia: How Scammers Steal Millions Through Carbon Markets.” Atlantic, 11 October 2013.

Your company is great, be great to the climate too

What Every Business Can Do for the World Today

With all the noise around sustainability, the importance of just doing something often gets lost. As a small business it is incredibly hard to focus on anything but bringing in sales and the many fires one has to fight every day. So while we think it’s great to go for ambitious greening, we think it’s equally important that there is a path that is viable for every single business to do, now. Let’s rise the tide and lift all boats.

This path must be simple to understand, fast and cost-effective to implement and applicable across wildly differing business scenarios. We’ve used our experience working with businesses of every size to remove the wheat from the chaff and hone in on the three things EVERY business can and should do TODAY. These three things have real impact, meaning and heft and will be recognized by anyone you do business with as sensible, responsible and a sign of a quality organization. They will also provide incentive for those businesses that are in position to go greener to do so and lay the foundation for your business to be a great green business.

1. Understand (your impact)
2. Act (on what you can)
3. Grow (the movement)

Understand:
To be a responsible, well run business, you should know your impact on the world. The first step is to determine, at minimum, your carbon impact – including of your supply chain, where likely 90%+ of it is. You can do this through Carbon Analytics or through another service, but you should find out where you stand. Know your business. As a bonus, understanding where your impact comes from can often help you find ways to save money and make you more resilient.

Act:
Renewable energy prices are plummeting and there is now no reason not to switch. In fact, it might save you money. For at most an extremely nominal price, your business can be 100% renewable powered, great for the planet and great for marketing. This builds the market and prepares your business for the day when the whole world is renewable. If your business can afford it (and most any can) buy renewable energy.

Grow:
While your business may not be huge, it can have an outsize impact if it helps grow the low-carbon community. There is no better way to do this than to tell those who are most eager to work with you that low-carbon is something you want to see in your suppliers, both for ethical reasons and for the risk reduction in having zero carbon suppliers. Tell your top 5 suppliers about your low-carbon preference. There are likely easy things they can do to reduce their impact, and in turn, yours.

THAT’S IT. We (and that planet) would love if you do more: change your light bulbs to LED’s, buy green products, offer green services, use recycled products, educate your staff, become a B-Corp. But as long as you are doing these basic three things, you are good. You are doing the most important, most impactful things you can as a small business and are part of a growing movement that will change the world. If every company did just these 3 things, we’d have global warming quickly licked, clean our air and achieve a more just, verdant world for all.

debate

Criticisms & Counterpoints – Why manage carbon?

A question we often hear from advocates and critics alike is why small businesses should bother investing in sustainability, and specifically managing carbon?

The question is understandable – there is less negative pressure on small companies to take responsibility for their environmental impacts, and it is negative feedback that the general population has come to associate as the driver for CSR programmes. We know that individually big companies represent the most sizeable chunk of carbon emissions and other impacts, and so its easy to focus efforts there. Legislation is aimed toward companies with a minimum turnover, and non-profits like Greenpeace or Friends of the Earth similarly focus campaigns on companies with household names.

That said, the face of sustainability is changing. CSR is no longer a pure risk-management strategy. Companies like Patagonia show stewardship much more out of mission alignment and for maintaining positive brand and reputation than they do for avoiding being targeted by a Greenpeace campaign.  Responsible companies gain another dimension on which to market their products and services, are able to tap into a market of environmentally-aware buyers, and enjoy popular public support. In the fight against global warming and climate change, it’s fun root for the underdogs, which at  lease at this point, are the progressive companies that are doing everything within their realm of control to push the economy towards more sustainable practices.

Given the advantages of managing environmental performance, namely:

  • Positive brand and reputation,
  • Ability to appeal to a selective audience of environmentally-aware buyers (where there is arguably less competition),
  • Efficiency associated with environmentally-friendly practices (e.g. lower energy bills, a more robust supply chain, etc.),

Small business, particularly young small businesses, can start out with their best foot forward and bake environmental performance management in from the get-go rather than waiting until it’s a problem that needs to be dealt with reactively.

Having briefly laid out some of the motivations for why these companies should, I would like to dig into common criticisms then ask, why not?

Criticism #1: It’s too expensive

This was true when the only way to measure a carbon footprint was to hire an expensive consultancy that harbours technical expertise. But beyond shameless endorsement for our own product, there are several solutions on the market that allow companies to understand their performance on the cheap (and of course we love it when companies do choose to manage their environmental performance with us!). We’ve intentionally kept the price down for small businesses, and if proactively managing environmental impacts can drive even £120 of additional sales the investment is paid off. In the worst case, consider it a down-payment towards future risk management.

Criticism #2: There’s nothing I can do!

I think this tends to derive from the common conception that (a) your environmental impact is limited to business travel and direct energy consumption (e.g. lightbulbs), and (b) you are only doing something when you directly reduce these activities.  In truth, the act of measuring itself is already doing a great deal, especially when your company shares that with the world. It shows leadership and sends a strong signal to other companies that carbon management is important.

Check out this TED Talk about how it takes two people to start a movement.  Being a fast follower has profound effect on making something acceptable to the masses.  Even if you are constrained in what suppliers you can choose, and what energy reductions are within your control, some of the companies who see your example are bound to have an efficiency that’s easier to root out or more influence over their supply chain.  Your suppliers, for example, seeing your company’s conviction may up their own game to stay in your favour.

Criticism #3: I don’t have the time

Think of environmental reporting like financial reporting. Sure, you can’t feel the effects on your business as much as making a sale, but having transparency into your company’s performance provides clarity on how your previous strategies are panning out and what you should do next. Once carbon-management is baked into your company it becomes another almost sub-conscious behaviour. When you are looking for new suppliers you will naturally pay more attention to their environmental credentials.  These low-effort acknowledgements have the potential to pay huge dividends.  Given two equal suppliers, wouldn’t you choose the one that takes the extra effort to take care of their community and their environment?

The benefits are like knowing another language

Don’t you wish you had invested the time as a child to learn more languages?  If you’ve waited until now to start learning you likely have more conflicting priorities, but can see how speaking another language would nonetheless offer new opportunities not currently available to you, even if difficult to quantify.  Managing carbon and languages alike can be intimidating at first, but ultimately open opportunities for discourse and can solidify new business relationships. And whereas a new language may take a year to speak fluently, you can become fluent in environmental performance in the span of a few weeks.

Give it a try and make a first-hand judgment!

There are tons of opinions out there on the merits of sustainable business.  We recently introduced a 30-day free trial of our product so that businesses can see for themselves that this really can be easy.  If you’re curious to see for yourself what carbon management looks like you can create your account here.  If you use Xero you can be up and running in less than ten minutes (allow yourself a few more minutes if you need to run/upload a report from a different bookkeeping system).  If you think we’ve exaggerated we’d love your feedback to learn how we can make things even easier. Hit us up in the comments or send us an email at info[at]co2analytics.com.

footsteps-on-the-beach-wave

Walking the walk: Our first environmental & social performance report

Today we are pleased to announce the publication of our first ever Environmental & Social Performance Report! (click to download)

Setting our values in writing last year was a major milestone for our company.  They have provided clarity at difficult decision points, and allowed us to rally behind the things that matter most as we build Carbon Analytics.  Following in the spirit of those values, we wanted to be transparent about our environmental and social goals. It helps to keep us accountable, and brings more people and more ideas into the conversation about how to be the best performing company we can be. It also has given us the opportunity to use our own product in a new context, and understand how it can be improved to facilitate this process.

We are early in the evolution of understanding what it means to set meaningful environmental & social goals, and to be able to track them effectively. As we evolve we’ll continue to publish our performance reports so that companies in similar stages can benefit from  our journey.  Already we have noticed that pure measurements of electricity and water, for example, will naturally increase as our company grows – benchmarking these items per capita, or per pound of revenue will likely be a more meaningful way to understand our progress in the future.

We’re excited to be publishing our environmental and social performance, and we hope you are too!

Now-What

So you’ve got a carbon footprint. Now what?

Many businesses we encounter decide to measure their carbon footprint because they believed it is an important thing to do, but aren’t quite sure what to do with the information once it is front of them.

We like to think about environmental action across three categories: Measurement, Reduction and Leadership.  This simple framework can be used to help organize your business around environmental performance goals.

Reduction is the often the first area that comes to mind with any environmental metric.

reduction framework

Much of the current guidance around carbon emissions is specifically focused on internal carbon and energy reductions, and this is where you can find the most abundant information online. Consider what investments you can make in new, efficient equipment and processes. Examples can range from changing your lightbulbs to reducing bottlenecks in a manufacturing process. While these areas require up-front investment, they yield savings over time, and often can pay for themselves within a matter of months. However, investing in new equipment and processes isn’t the only way to reduce your impact. You can also enable reductions in your supply chain. Can you find alternative, green suppliers?  For inputs to your product or service, consider whether your current supplier have a green product line or tariff?  You can also collaborate with your suppliers  - help them to find areas where they can improve, and share successful initiatives that have worked for you.

Better measurement, like reduction, can happen both internally as well as among stakeholders.

measurement framework

Increasing the frequency at which you update your emissions measurements, for example, can reveal new insights like peak consumption patterns to help you diagnose an area for reduction. Within the supply chain, soliciting more information from your suppliers can also reveal new areas for reduction, and help you determine where you can apply your influence most effectively (even small companies have influence on big companies in large numbers!).

Beyond measurement and reduction, there are great opportunities to demonstrate leadership.

leadership framework

You can share your carbon footprint with customers and investors, offering greater transparency to the way you conduct business.  This can be as informal as a blog post or tweet, or presented more formally in shareholder updates.  Sharing helps to activate the community around you, using your sphere of influence to get more businesses measuring their own environmental performance, and pushing us closer to a low-carbon economy.

We encourage you to adapt our framework for your own business, and think of creative ways to apply the new information you’ve learned about your business.

Carbon Basics

Carbon Basics (Part II): Factoring Carbon into Business Decisions

Our customers often ask how they can factor carbon emissions into their day-to-day decisions. Which project is greener? Which supplier should I choose? What transportation method should I use?

The answer, for some of the biggest companies, is simple – put a price on carbon emissions. This is how companies ranging from Microsoft, to Exxon Mobil have begun to address the cost of CO2 emissions.

How do you put a price on carbon? Some economist choose to measure in terms of the equivalent damage that one tonne of green house gases causes when released to the atmosphere.  This is called the “social cost of carbon” and encompasses things like infrastructure costs for dealing with severe weather and agricultural events.  Estimates vary, but you can find a price of approximately $50 per tonne here.

Once you have set a suitable carbon price, you can start to analyze suppliers in terms of their relative “carbon intensity” – i.e. how many tonnes of green house gases are released for every $1000 you spend on that company.  The result is a dollar figure that you can factor in to your normal cost analysis.

Take an example.

You are a considering buying services from a new supplier who charges $1000, and has an intensity of 0.40 tonnes of CO2 / $1000 spent.

That means spending $1000 will result in 0.40 tonnes of CO2 (and other green house gases) being released to the atmosphere.

At a carbon price of $50, this is equivalent to $20 of CO2 damage.

The net cost of buying from your supplier can now be budgeted as $1020.

The power of a carbon price is that it puts things in perspective, by putting it in the language of price.

By putting emissions in price terms, you can give yourself an “apples to apples” comparison of the trade-offs that you face when choosing greener options. So whether it’s a small project, or a large new investment, you have the tools you need to understand and optimize the impact of your decisions.