Ah yes, the controversial C word.
We all know it’s crucial. We all know we have to get our heads around it and we all know we have to drastically slash it.
I’m talking carbon emissions of course. That C word. Up there with other equally dreaded C words like ‘calories’ and ‘carbs’. All things we have to count and reduce but don’t particularly want to.
This is the time of the low carbon diet.
And this kind of carbon counting is becoming increasingly mandated as the world urgently tries to reign in greenhouse gas emissions (GhG) in an effort to meet the goals of the Paris Agreement (the legally-binding treaty on climate change that was signed by 196 countries at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015).
What is the goal of the Paris Agreement? To limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius (which is pretty much where we are now so some believe that ship has sailed, barring a miracle, so batten down the hatches because climate schizz is gonna get real).
A warming planet creates a wide range of risks for humanity and other species. For businesses in particular, risks include disrupted supply chains and labour challenges. Climate change and extreme weather events such as droughts, floods and fires, can impact all businesses worldwide. Like, duh.
According to latest scientific data the world is on the path to exceed global warming of 1.5°C and 2°C during the 21st century unless deep reductions in CO2 and other greenhouse gas emissions occur in the coming decades (IPCC Sixth Assessment Report). Global emissions should be cut to 45 per cent below 2010 levels by 2030, and the world would need to achieve net zero carbon dioxide emissions by around 2050, in order to limit global warming to 1.5°C above pre-industrial levels.
LOW CARBON DIET
But the bottom line is, carbon reporting is getting increasingly mandatory as we try to meet these targets. One factor driving the expansion of mandatory carbon reporting, aka carbon accounting, is increasing awareness of the risks posed by climate change and the role that businesses play in contributing to it. Investors and other stakeholders are increasingly demanding transparency around carbon emissions and other environmental impacts, and governments are responding by mandating reporting requirements.
The future of mandatory carbon reporting globally will continue to expand and become more stringent. Many countries and regions, including the European Union (EU), United Kingdom, Japan, Australia, New Zealand, and several U.S. states, have already implemented mandatory carbon reporting requirements for large companies, and others are expected to follow suit.
In the EU, for example, the European Green Deal is a set of policy initiatives introduced by the European Commission in 2019 aimed at making the EU climate-neutral by 2050. It is an ambitious plan to transform the EU’s economy, with a focus on reducing greenhouse gas emissions, protecting biodiversity, and transitioning to a circular economy.
One key component of the Green Deal is the EU’s commitment to reduce its greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
With this goal in mind, the EU has implemented a number of regulations aimed at improving carbon reporting, including the EU Emissions Trading System (ETS) and the Effort Sharing Regulation. The ETS is a market-based mechanism that puts a cap on the total amount of CO2 that can be emitted by power plants, factories, and other large emitters, and allows companies to buy and sell emissions allowances. The Effort Sharing Regulation sets binding national emission reduction targets for sectors not covered by the ETS, such as transport, buildings, and agriculture.
And this is just the start.
B CORP UPDATES
Here in B Corp world, the new standards for being a B Corp Certified business, to be implemented from 2024, will almost certainly include mandatory carbon reporting for all businesses.
While the proposed changes are still in draft form and under discussion, the intention is to urge B Corps to take action in accordance with science to combat climate change and its impacts. It is proposed to make three Climate Actions mandatory for B Corps namely:
- CA1 Your company tracks its GhG emissions annually.
- CA2 Your company implements a climate transition plan to ensure its fair contribution to keep global warming below 1.5 °C.
- CA3 Your company has a track record of climate action. Scope: Your value chain, and all people and communities affected by your company, directly or indirectly.
CARBON REPORTING FOR SMES
For small companies, it can be hard to know where to start when it comes to carbon tracking and reporting. Here at Grow Good, we can help with that but if you want to DIY it, here are several steps a small company can take to report its carbon emissions:
- Define the scope of the emissions: The company needs to determine what activities are producing carbon emissions, such as energy use, transportation, waste disposal, etc.
- Collect data: The company needs to gather data on its carbon emissions. This can involve analysing utility bills, fuel receipts, and other relevant documents.
- Calculate emissions: Once the data is collected, the company can calculate its carbon emissions. There are several online tools and software available that can help with this process, like this free toolkit from the New Zealand government.
- Develop a report: The company should develop a report that outlines its carbon emissions, including the methodology used for calculating them. The report should also provide information on the company’s carbon reduction goals and any measures it is taking to achieve them.
- Submit the report: The company can submit its report to relevant stakeholders, such as customers, investors, and regulatory bodies. Why not publish it on your website on your B Corp or Sustainability page?
It’s important to note that there are various reporting frameworks that a small company can use to report its carbon emissions, such as the Carbon Disclosure Project (CDP), the Global Reporting Initiative (GRI), and the Sustainability Accounting Standards Board (SASB). These frameworks provide guidance on how to report on carbon emissions and other sustainability metrics.
Through small and large changes and actions, B Corps are weaving a future when business as a force for good is the way everyone does business.
Are you Ready to B Better?
Ready to take the plunge towards becoming a B Corp business? Let the Grow Good team guide you through the process either through 1:1 coaching or group coaching on one of our regular cohort programmes.