“You can’t manage what you don’t measure”
Peter Drucker believed that in management it is imperative to measure in order to improve. Broadly this applies to all sciences, including environmental. In a world beginning the transition to a sustainable economy, companies need to disclose and reduce their carbon emissions and environmental impact more now than ever before. Measuring business impact is the start of a journey towards a sustainable future for our society, the way of doing business and our world in general.
Multiple studies have come to show that the benefits from sustainable initiatives in business, like carbon footprint measurement go far beyond environmental and social benefits. Such sustainable initiatives can also offer businesses major financial, operational and competitive advantages worthy of serious consideration, even by the CFO’s standards.
What is Carbon Footprint Measuring?
Carbon footprint is the total of greenhouse gas emissions (GHG) that are directly or indirectly produced by an individual, organisation, product, service or event, and is often reported in terms of carbon dioxide equivalent, CO2e. This equivalent translates based on their Global Warming Potential (GWP) the following emissions into 1 unit of CO2e to make their measurement and management simpler:
- Carbon Dioxide (CO2)
- Methane (CH4)
- Nitrous Oxide (N20)
- Hydrofluorocarbons (HFCs)
- Perfluorocarbons (PFCs)
- Sulphur Hexafluoride (SF6)
Measuring the carbon footprint of a business entails identifying the source of emissions in a business and value chain, collecting either activity data or spend-based data of the business activities and translating it into carbon footprint. This is does according to methodologies and standards such as the GHG Protocol, GR, ISO and others in order to arrive to a scientifically sound and accurate measurement of your organisation’s carbon footprint.
Reasons to measure a business’ carbon footprint
Measuring your carbon footprint enables you and your business to gain advanced insights into your company’s environmental impact as well as into the operational efficiency of your processes and resource allocation. The reason to measure a company’s carbon footprint expands beyond environmental and social responsibility, into business strategy and operational efficiency.
Improve transparency and engage with stakeholders
Customers, employees, business partners, investors and other stakeholders are increasingly expecting companies with which they have a relationship to not only communicate and claim environmental and social intentions, but to instead report and disclose those efforts in a sign of transparency, trustworthiness and implication with the interest of all stakeholders.
Studies show that sustainable management practices such as Carbon Footprint measurement were used to build lasting stakeholder relations. From increased customer loyalty, to attracting and retaining talent, shedding light into your company’s environmental impact may send a sign to all stakeholders that your company is responsible and remains accountable for its activity.
Enhance Brand Value
Demand for products and services from sustainable brands is on a constant upward trend, and unlike other trends, this one will not fade. Sustainable consumption will become the norm due to both consumer demand and fast incoming environmental and social regulation that dictates the minimum sustainability of businesses, products and services.
The companies leading the way towards a sustainable future and taking steps to measure, reduce and communicate their carbon footprints will enhance their organisations’ legitimacy and perceptual value of their offering.
Comply with current and upcoming regulation
The regulatory environment is continuously changing and adapting to the new scientific findings and varies among different countries. What we know for certain is that new-coming regulations will be stricter and tighter on the environmental and social disclosure fronts in order to push towards a net zero emissions economy while promoting equal opportunities and development.
For example, the new proposal for the Corporate Sustainability Reporting Directive (CSRD) in Europe that intends to implement environmental and social impact disclosures for smaller-sized business inside of the EU. Staying ahead of new regulations is proof of commitment for business, improves relationships with local governments as well as leading the change in your sector.
Optimise your company’s value chain and resource allocation
Measuring the carbon footprint of your business can expose areas of improvement with potential for optimisation that can make the entire value chain more efficient while reducing the impact that it has on the environment and on the community.
From identifying energy intensive assets to raw materials that could be updated for more sustainable ones, measuring the carbon footprint of all processes, products and services is the first step towards optimal resource allocation.
Measuring a business carbon footprint doesn’t have to be difficult
Constantly changing regulation, heavily technical reporting frameworks, scientific methodologies are all factors that make business and people reluctant to measure their environmental and social impact even if they do have the intention to be more sustainable.
With the technology in our hands and all the knowledge that the scientific community has provided us, there has never been a better time to start the journey towards sustainable practices. That journey starts with measuring impact.
With Agora’s proprietary technology, data and ratified methodologies, Agora can accelerate the transition towards sustainable practices and level up the sustainability of all business.
Accelerate your business towards a sustainable future
If you are searching for a partner to embark upon with in your sustainability journey, from measuring your carbon footprint, to offsetting and reducing your impact all the way to communicating it to relevant stakeholders, get in touch with our team to take your sustainability to new heights!
Sources:
European Commission Sustainable Finance Package