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Energy & Carbon Reporting - Why It Matters

It can be difficult to keep up with the diverse range of environmental and sustainability measures that businesses are under pressure to implement. From ESG and carbon offsetting through to energy and carbon reporting – there is a growing expectation for organisations to identify unsustainable practices take action to change them.

We spoke to Joe Oughtred, , co-founder of Axiom Consultancy to find out why measuring carbon emissions is such an important part of this process, and the benefits it can deliver for your business.

Sustainability – It’s Essential

This pressure to be sustainable is growing. Climate change is an ever-present topic that is only set to increase in importance. We’re already at the point that sustainability is no longer optional – it’s an essential and unavoidable part of doing business. Reducing the impact on the planet is something that every organisation should be doing.

How do you showcase your sustainability and environmental credentials and prove you’re making positive change?

One way of doing this is through energy and carbon reporting. In addition to providing transparency, reporting is intended to encourage the implementation of energy efficiency measures.

Streamlined Energy and Carbon Reporting – What Is It?

The UK government’s Streamlined Energy and Carbon Reporting (SECR) policy was implemented on 1 April 2019 – forcing businesses in scope to comply for financial years starting on or after this date. These new regulations required an estimated 11,900 companies incorporated in the UK to be transparent about their operations by disclosing their energy and carbon emissions.

Energy and Carbon reporting is mandatory for a certain group of businesses that are already obliged to report under mandatory greenhouse gas reporting regulations. It also includes all businesses classified as “large” under the Companies Act 2006. This includes all quoted companies.

Although it is not compulsory for smaller businesses, measuring and reporting is an effective way of accelerating the journey towards sustainability. It equips business owners with a comprehensive overview of their emissions and environmental impact – which can be used to track progress.

Private sector organisations that lie outside of the scope of SECR are encouraged to voluntarily report.

Exploring Scope Emissions

The energy usage and associated greenhouse gas emissions that companies are expected to report on as part of SECR are divided into three Scopes: Scope 1, Scope 2, and Scope 3.

Scope 1 covers emissions from owned or controlled sources, Scope 2 is indirect emissions from the generation of purchased steam, electricity, heating and cooling, and Scope 3 comprises any other indirect emissions that happen within an organisation’s supply chain.

Scope 3 can encompass anything from waste disposal processes you don’t control through to the emissions arising from business travel on a plane or train. It includes all the emissions generated by your suppliers in creating and delivering the products and services they supply to you.

Given the range of emissions this covers, it’s no surprise that this Scope represents the largest source of greenhouse gasses. For most businesses, Scope 3 emissions can be 80% or more of total emissions.

Why Measure Energy and Carbon?

Measuring energy and carbon allows you to identify where in your business your main emissions are, both within your business and in your supply chain. This highlights areas of unsustainability and shows areas in need of improvement. In turn, this allows you to implement real change and replace outdated or inefficient practices.

Whilst this is great for boosting your green credentials from an ethical and reputational standpoint, it can also benefit your business in other ways. Recognising unsustainable areas within your organisation broadens the scope for compliance. It can also help you save money in the long-term buy replacing inefficient practices and driving innovation.

Measuring emissions also equips you with tangible, clear data that can inform your decision making. This presents an opportunity for company growth, as it encourages suppliers and businesses who share the same environmental ethos to collaborate with you.

If you recognise disproportionate emissions in your value chain, you can also help suppliers with sustainability initiatives, or carbon insetting. This could be practical or financial intervention – advising them on new ways to do business or investing in new technologies that will help them hit their sustainability targets.

About the Contributor: Joe Oughtred is the co-founder of Axiom, a consultancy that specialises in sustainability and supply chains underpinned by a powerful cloud-based platform that helps businesses monitor, analyse and improve sustainability performance in order to achieve its sustainability goals.

The have developed a specialist Supply Chain Emissions Calculator. This enables you to easily measure Scope 3 emissions, estimate the carbon footprint of your suppliers whilst streamlining the reporting process. This gives you an overview of the key areas and industries impacting your emissions through tangible data and reports – establishing a valuable foundation for further analysis and supplier engagement which can inform your decision and make your carbon reduction strategy far more effective. Get in touch via their website to find out more.


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