Many organisations will be no stranger to energy and carbon reporting. There has been a slew of mandatory (and voluntary) reporting schemes that have come and gone in recent years, such as the Energy Savings Opportunity Scheme (ESOS)) and Carbon Reduction Commitment (CRC) scheme (now retired).
Mandatory carbon reporting schemes set by the government can often be viewed solely from a perspective of meeting their compliance requirements, rather than as an opportunity to review and reduce an organisation’s energy use and associated carbon footprint.
At Energise, we are happy to help organisations with their energy and carbon related compliance obligations, but we don’t just want to help our clients tick boxes. We want to engage with organisations to not only show where they are now, but where they can get to, and then equip them with the tools to achieve their goals.
We’re aware of the scale of the climate change challenge that all of us face together as a planet and we are eager to do our part and empower others to do theirs!
WHERE TO START
“Begin with the end in mind...” Stephen Covey
Creating a robust carbon footprint is the first step on the Pathway to Net Zero. Organisations that are required to report on their carbon emissions through a mandatory scheme may have a solid carbon footprint in place but may only cover the required scope of the legislation. This could result in missed opportunities for energy and carbon reduction in areas which contribute massively to an organisation's true carbon footprint, but that slip through the reporting net.
Setting a meaningful scope of your carbon footprint is key in being able to use it to gain insight from your operations and form the basis of your energy and carbon management plans , or Pathway to Net Zero.
In order to gain the most insight from your carbon footprint, it will not always be enough to just focus on the requirements of a scheme with which you need to comply. This should be viewed as the minimum requirement, not the goal.
Ask yourself, ‘What do we think are our biggest energy users?’ and then include these in the scope and boundary of your annual footprint. If the data is not available for these areas, start reporting on what you can and estimate the usage for the areas if possible, whilst making plans to collect the actual data for inclusion in future years.
Maintaining a detailed and accurate carbon footprint provides a powerful tool for the driving of energy efficiency and carbon reduction action and a means for tracking the success of these actions. More information on compiling a carbon footprint can be found on the .gov.uk website and the GHG Protocol website, which provides leading global standards free of charge.
For assistance in setting up your first carbon footprint, or help with updating or maintaining your existing one, please contact us.
Generally, in order to meet legislative requirements (where relevant), your organisation will need to compile data to provide high level figures at an organisational level. The methods listed below could help provide additional insight:
Depending on the structure of your company and the outcomes that you want from your carbon footprint, it could be beneficial to establish multiple reporting levels. Breaking your reporting levels down could help with targeting your highest areas of carbon use, identifying opportunities to reduce them and then monitoring progress moving forward.
Some examples are shown below:
5 site organisation – report carbon data at site level
300 site organisation – report carbon data at region/operational unit level
Portfolio with complex mix of sites/operations – report carbon data at fuel level
Setting a reporting structure that will support your objectives around carbon management at an early stage will have great benefits. Detailed site or divisional reporting is voluntary, so it can be added at any stage, and it’s never too late to start!
Organisations that have been reporting their carbon footprint in previous years will have data that can be used for comparison, but when you are compiling your first annual carbon footprint this forms your baseline year.
Once a baseline year has been established it can be used for comparison for as long as the baseline period matches your organisation’s operations. When changes occur to your organisation that significantly impact your energy use and associated carbon emissions (such as a merger or acquisition), a re-baselining exercise should be considered to allow for ongoing carbon footprint comparison with a similar period.
Year-on-year comparison reporting is a requirement of SECR, however this only needs to cover the most recent three years. Therefore, by comparing your annual carbon footprint against a baseline year, you can access an additional layer of insight that could be missed where organisations only report based on the requirements specified in legislation.
Organisations complying with SECR must report their carbon emissions as an intensity ratio based on an appropriate metric (such as turnover or employee numbers), as well as absolute figures. The metric is chosen by the organisation and should be directly related to end energy use/carbon emissions.
This allows organisations to report on performance over time by normalising emissions based on activity. For example, if a company turnover doubles in a year and their carbon emissions also double because of the extra work this results in, when normalised this will show as the same intensity ratio when compared to the previous year.
Using intensity ratios allows organisations to more accurately assess their carbon performance over time. For compliance purposes, only one ratio is required, however setting up multiple intensity ratios can provide more insight.
Some organisations will have various operations that have different drivers for carbon emissions, such as employee numbers or floor area for office buildings and number of deliveries for vehicle fleet. Using an overall ratio of total tonnes of carbon/total turnover will not provide as much insight to the ongoing performance of these activities as having additional separate ratios of ‘buildings carbon/# of employees (or floor area)’ and ‘vehicle carbon/# of deliveries’.
Existing Key Performance Indicators (KPIs) may already be in place within your organisation that could be used as a foundation for setting up additional intensity ratios to help track carbon use for different operations and look for opportunities to reduce carbon at a more granular level.
Carbon factors are used to convert energy use into carbon emissions, converting raw units of fuel and energy data to either kg or tonnes of Carbon Dioxide equivalent (kgCO2e / tCO2e). Carbon factors are published annually in the UK by the Department for Environment, Food & Rural Affairs (DEFRA) and are available here.
Changes in carbon factors will have an impact on how much carbon your organisation reports each year. This is particularly relevant to electricity data which has a carbon factor that consistently reduces each year as more renewable, low carbon technology contributes to our electricity supply.
The scope 2 electricity carbon factor recently published in June 2020 is nearly 50% lower than the electricity factor published in June 2015. So, when comparing carbon emissions from electricity between years it can appear that performance in relation to electricity is improving, whereas this could solely be the result of the carbon factor decreasing. Whilst this is accurate for carbon reporting requirements it does not provide the best insight for monitoring electricity performance on an ongoing basis.
This can be addressed by reporting on both energy and carbon use in your carbon footprint report by converting all energy and fuel use data into kilowatt-hours (or megawatt-hours) as well as tonnes of carbon. This is a requirement of the SECR scheme but also has benefits for any organisations that are voluntarily compiling a carbon footprint.
Drawing a distinction between carbon and energy figures removes ambiguity associated with factors changing – you can see exactly where energy has increased or decreased. This can drive decisions as to where attention should be focused to make improvements.
It can take a lot of time to compile an accurate carbon footprint, depending on the organisation’s size, activities, availability of data and understanding of scheme requirements. But once a good carbon footprint has been created, there is so much insight that can be derived from it.
Many organisations compile a carbon footprint to generate a handful of numbers which are entered into their annual report and then no further action is taken until the following year when the same exercise needs to be completed.
Be curious with the footprint, don’t just use it for compliance. Look at the footprint and ask yourself some questions:
Which scope has the highest carbon emissions (1, 2 or 3)?
Which fuel has the highest carbon emissions?
Which site/operation/group has the highest emissions? Is this expected?
Are there similar sites or operations that are similar in activity/output but have vastly different emissions? If so, do you know why?
Has the overall intensity ratio gone up or down compared to last year? Do you know why?
Is the intensity ratio giving you enough visibility of the performance of your activities? If not, should additional ratios be added?
What activities are missing from the footprint? Do you have a large amount of business travel that hasn’t been included as it’s not mandatory? Could this be added next year?
If you are unable to answer some of these questions, this highlights areas where additional information could be held in the report in order to help you get more insight out of it in the future.
A lot of data is required to compile a good carbon footprint and often it will have been compiled from a variety of sources that are then held in a single place. Why not make the most of this information?
The more you investigate your carbon footprint the more you will get out of it; insight, opportunities, savings.
For more information about our Carbon Footprinting or SECR services, and how you can benefit from the reporting available within the Net Zero Hub, please contact us.
Kris Nicholls is the Principal Consultant at Energise. You can connect with him on LinkedIn.