Pitfalls and benefits of carbon management explored

Chris Davenport, environmental services director, McKinnon & Clarke looks at the changing face of carbon management.

Many organisations are looking towards managing their carbon emissions. The driving forces are threefold; first the increasing cost of energy, second, the growing level of regulatory pressure, particularly in the Member States of the European Union (EU) and third the growing interest being taken by banks, investors and non-governmental organisations (NGOs) acting on behalf of the general public in the environmental performance of the largest and most high-profile organisations.

For example, one of the largest organisations in the world the United Kingdom National Health Service has published a strategy to meet the carbon budget targets set by the Government in the Climate Change Act.

In the private sector, many of the largest companies in the world particularly those based in the leading economies are also voluntarily disclosing data to initiatives such as the Carbon Disclosure Project [1](CDP) and other tracking mechanisms such as the Dow Jones Sustainability Index and a number of FTSE indices such as FTSE4Good.

However, in order to meet these challenges an active carbon management strategy is required.

M&C define the first stage on this journey as accurate measurement. There is a very relevant adage that can be applied here, 'if you don't measure it you can't manage it'.

This is very true of carbon and there are number of rational ways of measuring and reporting what is now popularly known as a Carbon Footprint.

Very many organisations are reporting emissions and environmental performance under these schemes and are reaping the benefits that such close scrutiny of greenhouse gas emissions can generate, including reduced energy costs, improved brand image and a clearer picture of the potential threats from climate chain to raw material supplies and distribution networks.

A multinational manufacturing company based in the Netherlands which operates from approximately 40 facilities across the globe saw last year's disclosure to the CDP was commended as one of the best submissions of a new entrant to the scheme and the actions being taken to mitigate climate change put it amongst the leaders in this area in the Netherlands.
The popular term Carbon Footprint is now common parlance for organisations.

A carbon footprint is the total amount of greenhouse gases (GHG) expressed in the terms of mass of carbon dioxide equivalent (expressed as tonnes CO2e). Depending upon the scope and the boundaries, an organisation, a product or service or a project can have a carbon footprint.

An organisational carbon footprint (OCF) is primarily based upon energy used on site and generated offsite to the more comprehensive approach such as those based upon the widely accepted GHG Protocol [2] which takes into account the full effect of the GHG emissions from across the upstream and downstream supply chain.

A more detailed approach which is finding growing interest is the product carbon footprint (PCF). This is a relatively new area in which business to business (B2B) and particularly business to consumer (B2C) companies are exploring as a means of differentiating their products or services in an increasingly competitive marketplace by using 'carbon labels' as part of the promotion of benefits.

There are several methodologies that are recognised and used by M&C, including Footprint Expert (developed in the United Kingdom by the Carbon Trust and widely used by high profile B2C companies such as Tesco, Müller, Boots, British Sugar and Tate & Lyle) and Bilan Carbone (developed by ADEME in France).

Once measurement and reporting are established upon accurate measurement and active reporting, a strategy can be formulated for the journey towards a low carbon future.

The first stage of implementing this strategy may be the efficient use of energy used by the organisation. For example, as part of a programme of carbon emissions reductions, M&C works to identify opportunities at with real cost-savings in 'hard cash'.

It is through a comprehensive carbon management approach that such savings can be realised. Whilst these savings go straight to the 'bottom line' the less tangible benefits will enhance corporate reputation and protect image and brand value.

Once an organisation has set to work reducing its energy intensity (the energy used for a unit of production or service) then the next challenge is to decarbonise the energy supply by using renewable energy in place of fossil fuel or electricity generated from fossil fuel.

This can be done either within or outside the organisation but it does require either investment in on-site renewable energy or paying a premium for zero carbon 'green' energy supply via the public grid as part of the commitment.

However, it should be pointed out that this latter approach does not eliminate carbon emissions from energy in some of the footprinting methodologies so care must be taken here.

The last stage in carbon management is to consider carbon offsetting.

There has been much discussion about the credibility of various carbon offsetting schemes that are available but M&C believe that for those wishing to offset their emissions the approach taken needs to show demonstrable reductions in overall tCO2e released.

This means Government approved schemes to offset carbon emissions with Kyoto-compliant credits and schemes which deal only in Certified Emissions Reductions or EU Allowances both of which are internationally verified.

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