BUSINESS STANDARDS
is the quarterly magazine of BSI Group, highlighting the vital role that standards play in today's business environment. Regular features include interviews with leading business figures, as well as news on the latest developments in management systems and standards.
Viewpoint
Question: Do companies need to verify their carbon footprint?
Unless a business is regulated by some form of greenhouse gas (GHG) reporting and/or cap-and-trade regulation (as is the case for some 12,000 installations in Europe), rarely is there the need to either calculate or verify the accuracy of a carbon footprint.
With the time and cost involved in carbon footprinting and verification - why would a business voluntarily verify its carbon footprint?
The answer is quite simple. Just as unaudited financial accounts lack the credibility of those reviewed by a reputable independent accountancy firm, carbon footprint assertions that have been verified by an independent third party are more credible - and thus more useful - than those that are not. Consequently, ?as companies strive to meet the expectations of shareholders, the independent verification of emissions data is of steadily growing importance? (Source: www.climatechangecorp.com).
Additionally, with the increasing use of cap-and-trade regulation and thus the growing importance of emissions trading, a tonne of carbon has become monetized and commoditized. As a result, there is now an established (albeit fluctuating) price for a tonne of CO2 and where a business can prove the reduction or avoidance of CO2 emissions, there is the potential for financial gain.
As with any commodity, businesses are recognizing that there is financial value in quantifying and verifying carbon footprints. In addition to the financial value (often significant) in verifying and selling emissions reductions, there are a number of other benefits from verifying a carbon footprint.
Verifying a carbon footprint will:
> provide independent assurance that a carbon footprint is complete, accurate, consistent, transparent and without material discrepancies;
> strengthen the integrity of GHG management, quantification and reporting activities which will improve data quality;
> increase senior management confidence in GHG data and thus improve investment and strategic decision-making;
> reduce the risk of material data discrepancies and reduce the risk of reputational, operational and financial risk that such discrepancies can cause;
> ensure credible and reliable participation in voluntary GHG registries, or reporting initiatives such as the Carbon Disclosure Project, which in turn will enhance reputation and improved access to capital;
> provide the independent third-party verification often required to receive credit for early action prior to impending regulated reporting requirements;
> improve internal accounting and reporting practices; and provide practice and experience in the verification process prior to regulation.
Jackie Harvey-Watts, GHG scheme manager, BSI Management Systems UK
Tesco has joined a number of companies measuring the carbon footprint of their products and services and working to reduce them over time. Since April 2008, it has been using the Carbon Trust's Carbon Reduction Label to communicate this information to consumers. The label uses BSI's draft standard PAS 2050 Specification for the assessment of the life cycle greenhouse gas emissions of goods and services, which is being piloted as part of the labelling scheme. To date, it has been trialled by Walkers, Boots, Innocent Drinks, Continental Clothing and Halifax. Mey Selections and Morphy Richards have also committed to launching labelled products shortly. Consumer feedback has been positive: 70 per cent of consumers say that the label makes them more aware of the environmental impact of the products and services they buy, according to research by Walkers. By enabling consumers to make informed buying decisions, we believe that companies will find significant efficiencies in the supply chain. This will help businesses reduce costs, empower consumers and significantly reduce carbon emissions.
Euan Murray, general manager, carbon footprinting, Carbon Trust (www.carbontrust.co.uk)
Verification of a carbon footprint is an interesting development and would be a helpful step forward. However, before this can be of any real benefit to consumers, the issue of how and where boundaries are drawn needs to be addressed.
For example, a UK-produced cement might have 800 kg CO2 direct emissions per tonne. If the transport of raw materials and electricity are included in the footprint, then this would be a slightly larger number.
A cement produced in a similar plant in China would have the same direct emissions, but the CO2 from transporting this tonne could add a further 160 kg/tonne of CO2 emissions.
An importer could therefore draw their boundary around the port and claim a very low carbon footprint for a product that has 20 per cent greater global warming potential. This side of the story is essential and needs to be addressed in any discussion of carbon footprint verification.
Iain Walpole, company environment manager, Castle Cement Limited
Business Standards © 2007. Editorial produced by Caspian Publishing in association with the British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.
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Question: Given the state of the environment, should issues like energy management in business be more regulated and closely monitored instead of voluntary?
Climate change is such an urgent issue that some might argue the only answer to this question is "Yes". However, creating laws that achieve their goals in precisely the right way is challenging and time consuming at the best of times. And when it comes to climate change, the factors involved are varied - too many for any one law or set of laws to cover adequately.
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