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Calculate your carbon footprint
Posted by Kathy Gibson in Carbon Emissions | 0 comments
The call for companies and individuals to reduce their carbon emissions is becoming louder, and there is a real appetite among South African companies to do so. However, it's impossible to properly plan and manage such an exercise without knowing exactly where users stand in terms of emissions.
Alex Hetherington of Carbon Calculated points out that a number of policies relating to carbon emissions, taxes and national commitments are starting to filter down to company level.
However, he says, no-one can manage something that hasn't been measured and so companies are urged to start their green journey by determining their carbon footprint.
Emissions can be direct or indirect, he points out, and so it's important that a proven methodology be used.
South Africa is currently in a period of voluntary carbon disclosure, where the country's biggest companies have been asked to measure their emissions. Soon, large companies will be required to do so, and eventually all companies will need to make some kind of carbon disclosure – even if it's just to prove themselves exempt from the proposed carbon tax.
Hetherington explains that carbon footprint is measured on three planes.
Scope one measures carbon generated directly by the company, from its facilities and vehicles; scope two measures the company's electricity usage (which could be as much as 80% of a company's carbon footprint, depending upon the industry); and scope three measures indirect emissions from the company's supply chain.
The last scope, with is voluntary, measures both upstream and downstream supply chain emissions, factoring in things like business travel, paper consumption, employee commuting, couriers and logistics.
Hetherington points out that there are many sound reasons for measuring a company's carbon footprint.
The sustainability angle is obvious, and this will become more important in the future, especially when the carbon tax becomes a reality.
However, measuring carbon footprint also has important financial implications. With energy becoming a more costly resource, financial directors will also benefit from information that points to energy usage, and recommend ways of reducing it.
"If you bring a financial modelling component into your carbon reporting, it will get the interest of the top managers," he says. "Companies can start looking at their carbon footprint not just from a sustainability perspective, but from financial perspective as well."
Some examples of unexpected benefits can be found in the healthcare industry, he says, where heavy emissions in a particular region or pertaining to a particular activity have helped companies pinpoint where there are operational inefficiencies.
Currently, however, he warns that most South African companies are completely oblivious to their own carbon footprints, and are in no position to start managing emissions.
"Most companies are driving blind," says Hetherington. "They have no measurement, no management and no cost control. They are completely unprepared to start managing carbon emissions."
Most are in a state of ignorance simply because there is no incentive to unravel the truth, he says. However, this may well change once the proposed carbon tax is implemented, but there is little clarity yet on which companies will be affected.
A few companies are reporting their emissions to comply with regulations like King III, but few are managing or monitoring reductions.
What's needed, Hetherington says, is for companies – especially the largest companies – not only to measure their carbon footprint, but also to manage it.
Robbie Louw from Promethium Carbon adds that managers need to start getting to grips with their companies' carbon emissions soon – or they may be out of a job. If companies don't do the reports, they can never get to the point where they can take action. The manager who doesn't know about carbon cannot be a manager in two or three years' time – and this includes CEOs and financial managers.
"Climate change is the biggest dilemma mankind has ever faced," Louw adds. "It's about the survival of the species."