Carbon management for business: A beginner’s guide

Climate change and carbon foot printing are current and real issues for business today. We face many challenges in a world where average temperatures and sea levels continue to rise, affecting food chains, human populations, biodiversity and even insurance premiums. Business can connect on this issue via established environmental management systems such as ISO14001 or BS8555.

Whilst carbon dioxide has had most of the recent media coverage, it is only one of a family of green house gases that causes enhanced climate change. Business must also be aware and account for other green house gases including methane, nitrous oxide and various refrigeration gases. The process of carbon foot printing allows business to account for its carbon emissions and to report on these, however, it is wise to include emissions from other gases in this process.

A raft of legislation now exists in the UK to ensure that the business community responds to the changing climate. This includes the climate change levy, the carbon reduction commitment, the building regulations and the Climate Change Act with its associated carbon budgets. The climate change levy was introduced in 2001 and typically increases business energy costs by up to 10–20 percent although payments of employers’ national insurance contributions offset this increase. The more recent Climate Change Act introduces carbon budgets which will be set before June this year. The most commonly known legislative instrument is of course the Kyoto Protocol, adopted under the UN Framework Convention on Climate Change in 1997 it came into force in the UK in 2005. The UK target is to reduce its carbon emissions by 12.5 percent below 1990 levels over 2008–2012. Targets are met by reductions on domestic emissions or use of flexible mechanisms by trading joint implementation and clean development mechanism credits.

For the larger energy consuming installations the European Union’s Emission Trading Scheme EU ETS provides a mechanism to reduce emissions. All EU member states devised a National Allocation Plan, these set emission allowances and reduction targets. Installations covered by the ETS in the UK are responsible for 46 percent of carbon dioxide emissions. Sectors involved in the ETS include oil refining, pulp and paper, mineral products, and power and heat generation.

For businesses that don’t take part in the ETS, but still wish to respond to the carbon agenda there are a range of management options available. These include implementing an environmental management system, which incorporates carbon management and carbon foot printing, offsetting emissions, undertaking life cycle analysis to reduce resource use and supply chain emissions, implementing waste minimisation and using standards to calculate emissions and to report to stakeholders and shareholders.

There are a variety of standards that business can use to calculate their carbon foot print. The definition of a carbon foot print is the total set of greenhouse gas emissions caused by an individual or organisation, event of product. It is usually expressed in carbon dioxide equivalent or CO2e. The most well known standard is the World Resources Institute and the World Business Council for Sustainable Development, Greenhouse Gas Protocol: A corporate accounting and reporting standard. This is the globally accepted standard for measuring and reporting foot prints, it provides guidance for setting boundaries, categorises emissions sources and be downloaded at ghgprotocol.org.

The International Standards Organisation also has guidance in the form of ISO 14064 and ISO 14065. The ISO14064 provides a specification and guidance for calculating an organisations green house gas (GHG) emissions, and allows for the systematic development and maintenance of GHG inventories. Whereas ISO14065 provides the accreditation requirements for GHG assertions and claims, please visit iso.org for further information on these standards. More recently BSI produced PAS2050 for the carbon foot print of products, this publicly available specification helps business to measure the embodied GHG emissions from products, please visit bsi-global.com for further information.

Steps to producing a foot print
As with the management of any pollution source a clear management methodology will help to reduce risks, and to provide robust and accurate data for reporting:

Define the methodology
- Specify the boundary and scope of the foot print – 
what’s in and what’s out
- Collect emissions data and calculate the foot print
- Verify the results
- Disclosure of the foot print to key stakeholders

Methodology: Whilst there are clearly standards available to follow, a business could choose to create a bespoke computer package to calculate its foot print. The GHG Protocol, ISO standards and PAS2050 provide useful starting points.

Emission Scope: The business needs to decide what will be included in the foot print for example transport emissions, gas and electricity usage, supply chain and waste emissions. The GHG Protocol provides three scopes:

Scope 1: Direct GHG emission – from sources that are owned or controlled by the company.

Scope 2: Electricity indirect GHG emissions – accounts for GHG emissions from the generation of purchased electricity consumed by the company.

Scope 3: Other indirect GHG emissions – an optional reporting category that allows for the inclusion of all other indirect emissions, (Source GHG Protocol).

For business wanting to produce a basic foot print then direct emissions such as on site fuel usage, onsite electricity and gas usage and use of transport will be included. If information on employee travel is known from expenses claims this can be included. A more complex foot print will include supply chain emissions, emission from waste and packaging.

Emission data: The collection of data for the basic foot print can be found on utility bills, staff travel expenses claim forms, and similar documents. In tenant and landlord relationships national benchmark figures for electricity and gas consumption may have to be used in event of real data not being made available – service level charges. There may well be a margin of error in the data collection process, the level of accuracy might be influenced by using assumptions/extrapolations in data analysis.

From gas and electricity bills collect the data in MWh or kWh. Other fuels can be based on litres, kWh and so on. Transport emissions will vary for car, rail, air and boat and so on. However in all forms of transport the mileage or kilometres travelled is required. The kilowatt hours and mileage data can then be converted to CO2e using the global warming potential factors published by DEFRA and also the Carbon Trust. The Vehicle Certification Agency also provides specific conversion factors for a range of makes and models of car at vcacarfueldata.org.uk. The DEFRA conversion factors are available at defra.gov.uk, the Carbon Trust factors at carbontrust.co.uk/energy. For carbon foot printing for events please visit eventsustainability.co.uk which includes a carbon calculator.

Verification of the results: having undertaken the data collection and analysis the results can be independently verified by a third party, such as a consultancy to give credibility to an organisation’s claims.

Disclosing the foot print: If the business decides to go public on the foot print results in a CSR report, website or similar it is important to ensure data is presented in a transparent fashion, provide full information on the methodology, emission scope, data collection, assumptions, and verification sources.

Becky Toal, MD Crowberry Consulting Ltd;
Phone: 01524 510 281 Mobile: 07957622124
email: btoal@crowberryconsulting.com
Visit: crowberryconsulting.com