Businesses across the world could have a massive ‘Reality Bomb’ to defuse in the years ahead when it comes to carbon emissions, thanks to a lack of clarity and joined up thinking in international carbon emission policy – and IT is not the answer.
Dr Richard Tipper, managing director of Ecometrica – a leading provider of greenhouse gas accounting services – predicts that we are likely to see a step change in company carbon reporting from under 20% (432,000 companies) to over 80% (1.73 million) in the UK over the next 5 years.
A recent PricewaterhouseCoopers (PwC) report (Appetite for Change, published May 2010) revealed that 64% of business leaders support carbon emissions legislation, including taxes and incentives, but believe that governments are failing to provide sufficient clarity and leadership in implementing legislation capable of meeting global targets.
According to the PwC report, most business leaders see the financial benefit in carbon reduction and many will go beyond what legislation requires in a bid to satisfy public demand and protect investor relationships and share prices.
Green issues are becoming pervasive for business – affecting everything from energy reduction plans to decisions on new products and services, investment and sourcing strategies. Data has to be accurate and compliant in order for planning, execution and measuring results to be effective.
Carbon information is rapidly becoming a standard part of the due diligence process for supply chain contracts and investment decisions. Organisations driving demand from the top include many big brands such as Walmart and Tesco, local authorities and government departments. Suppliers and service providers must comply with green policies; such as Walmart’s 2009 requirement for its suppliers to provide information about the environmental impact of their products.
However, for many organisations accounting for greenhouse gas (GHG) emissions represents a major headache in terms of capturing the necessary emissions data and in complying with a raft of emerging regional standards such as CRC, CDP, GRI, DEFRA, ISO 14064, PAS 2050 and 2060, WBCSD/WRI – the list goes on.
Many businesses are turning to business information systems for the answer, but Ecometrica managing director Dr Richard Tipper, co-author of the IPCC report into Climate Change that won the Nobel Peace Prize in 2007, warns that these systems are unnecessarily cumbersome and expensive and will ultimately never quite solve the ‘Reality Bomb’ problem.
“Many enterprise software and IT vendors are now offering “enterprise carbon accounting” (ECA) modules as upgrades to automate carbon accounting,” Tipper explained. “These solutions will output numbers and calculations, but because this software has not been designed from a carbon management perspective, there is almost always something missing.
“Keeping in touch with the huge raft of standards is the first problem. A software module may say it will help you to conform to a standard such as the Carbon Reduction Commitment (CRC), but what it doesn’t tell you is that not only does the CRC only account for site energy emissions, but that the CRC is merely one of almost 20 globally-recognised standards that you could be asked to report on. Consider this issue in a complex multi-national business with hundreds of products and services, each one of them with a different supply chain and lifecycle and all of a sudden you have a major headache. This is what we call the Reality Bomb.”
He added: “Ecometrica sees the future in professional services. We believe that emissions and energy management is a fluid business issue that needs to be fundamentally linked to business strategy and planning – and evolving as new standards and best practices emerge. Our experience is that this is much more about working with specialists and professionals than yet another project for beleaguered IT departments to contend with. It should neither cost the earth, nor take forever for organisations to establish the underlying metrics required to support the process.”
Ecometrica’s vast experience in the development and application of all major standards for GHG accounting, ecosystem change measurement and monitoring has led them to make this expertise available in the form of an easy to use online service called Ecometrica Sustainability.
Ecometrica Sustainability is a unique web-based greenhouse gas accounting service with one of the world’s most advanced GHG knowledge bases at its heart: eCORTEX. The eCORTEX contains tens of thousands of emission factors, unit conversions, guidance rules and benchmarks that is generated, maintained and future proofed by Ecometrica’s team of expert greenhouse gas analysts.
Dr Tipper concluded: “Ecometrica Sustainability has been specifically designed as a support tool for mainstream professional service providers offering energy management and green business services. Ecometrica Sustainability lets Ecometrica’s partners create client-specific GHG accounting platforms for their clients – with our analysts always on hand to provide expert support where and when required. This helps businesses establish and model their carbon metrics much faster and more accurately than conventional approaches.
“We believe that this approach will allow businesses leaders to focus on the real impact of their carbon reduction measures and strategic planning in the knowledge that they are fully compliant and accurate – rather than have them bogged down in IT issues.”
Former CEO of Man Group, smart investor and ‘godfather of UK hedge funds’ Stanley Fink has backed Ecometrica’s approach through two rounds of investment: “Ecometrica’s team has been at the forefront of best practice in GHG emissions accounting since it began in the late 1990s and using modern web-based technology the expertise that the team has built up is now widely available. For some time now business has realised that sound environmental policy is core to future success and Ecometrica Sustainability is a service that will help them achieve that.”
As carbon accounting rapidly becomes a mainstream activity for all organisations, Dr Tipper believes that this ‘light on IT, strong on service’ approach will help organisations defuse their ‘Reality Bomb’.
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Reading Time: 7 Minutes
Date Published: July 7, 2010
Report Your Emissions but Beware the ‘Reality Bomb’