Special report: GHG management and reporting - a view from the front

4th October 2010


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IEMA

Environment and sustainability professionals fulfil an essential role in helping the transition to a green, low carbon economy. They deliver energy and emission reductions and build a culture of change across organisations. Launched this week (from 4 October) IEMA's Special Report on GHG Management & Reporting* captures the views and experiences of these practising professionals. Here IEMA's Nick Blyth presents a picture of GHG management and reporting activity in 2010, along with some of the key challenges and opportunities moving forward.

In response to our major survey this year, IEMA members indicate an encouragingly high level of activity on carbon and GHG reduction by organisations, with two-thirds of respondents citing this as a leading or important part of their work. For those actively engaged in GHG management, over half (57 per cent) indicate their organisation is publicly reporting GHG footprints.

Over the past 10 years there has been an increase in GHG reporting across organisations of all sizes and across sectors, with the rate of growth increasing over the period. Manufacturing and major corporates held the largest percentage publicly reporting on GHGs at the start (in 2001).

Public Administration also exceeded the survey norm and made an earlier start. Construction was initially behind but has caught up, with annual growth rate 10 per cent ahead of the survey norm in 2009-2010. The level of GHG reporting by consultancy and professional services is lower by comparison although now increasing (this sector also indicates the largest percentage not publicly reporting on GHGs at 48 per cent).

Overall, IEMA Members have indicated a high level of ambition within their organisations on addressing climate change. Eighty-five per cent of organisations have ambitions beyond achieving legal compliance, with the majority seeking to build a positive reputation as a low carbon leader, become a low carbon leader in their field, or make transformational change to their business model. This level of ambition is critical if the UK is to meet its national carbon budgets, and needs to become widespread across the economy.

Drivers for action and barriers to progress

Understanding drivers and barriers is critical for environment and sustainability practitioners. Those already engaged in GHG management indicated that the strongest drivers were cutting costs and financial efficiency (47 per cent), organisational values (45 per cent) and legal compliance (45 per cent).

For those whose organisation is not yet active, new legal requirements are by far the greatest driver that would result in action (53 per cent). Although drivers can combine, a single business driver will often act as a tipping point. The CRC is a significant current driver, with almost half of active participants' organisations (44 per cent) falling within the scheme's requirements.

A wider range of barriers to progress were identified. The most significant were ‘other competing priorities in the organisation that are either business critical or legally required' (ie which overshadow GHG management). Other important barriers included lack of access to capital and funding and internal pressures to generate returns on investment over short time periods.

Framework for action

Figure 1: The greenhouse gas management hierarchy*

Members are using a wide range of methods to reduce carbon and GHG emissions such as energy management and reductions on site, improvements to buildings and premises, staff engagement and awareness campaigns. The frequency of measures identified closely aligns with the IEMA GHG Management Hierarchy (Figure 1).

The GHG management hierarchy is a policy guide to help organisations focus on and address their priority direct and indirect effects whenever decisions are being made on approaches to reducing GHG emissions. The challenge to avoid emissions will be a central one over coming years and requires an increased focus.

The value of GHG reporting

Reporting is viewed by members as an important enabling tool that helps build, embed and sustain a strategic organisational approach to carbon and GHG management and is identified as having a significant role to play in overcoming barriers. A correlation is apparent between organisational ambition on GHG emission reductions, and public reporting of performance. Over time, robust accounting and transparent reporting helps ensure that organisational approaches are relevant and effective in securing GHG reduction and associated wider business benefits such as cost savings, competitiveness, and corporate reputation.

Members' responses regarding corporate ambition for organisations, relative to the type or level of GHG reporting taking place, are depicted in Figure 2. A relationship is clear with organisations that are publicly reporting having greater ambition and more likely to be seeking transformational change. A similar relationship is noted in relation to the greater numbers achieving GHG reductions in public reporting companies relative to those only reporting internally.

Mandatory GHG reporting

Figure 2: Corporate ambition and types (levels) of reporting

A key finding of this survey and report is that a significant majority of IEMA practitioners (over 80 per cent) support GHG reporting becoming a mandatory requirement under the provisions of the Climate Change Act 2008 (this set a requirement for Government to use powers under the Companies Act to make GHG reporting a mandatory requirement for companies or to explain to Parliament why it has not done so by 2012).

Given the scale of the climate change challenge and the identified value and benefits of GHG reporting, IEMA supports the principles of a mandatory GHG reporting requirement being rapidly introduced for large companies. For other companies, consideration should be given to a phasing in mandatory reporting and prioritised based on GHG emission footprints. The Defra/ DECC 2009 GHG reporting guidance for organisations has become widely used and offers the basis for a mandatory reporting standard.

Further challenges

Managing and reporting of GHG indirect emissions in supply chains and across product life cycles (Scope 3 emissions) is a significant challenge for practitioners. Only eight per cent of active practitioners' organisations were addressing all their significant Scope 3 emissions.

A level of pressure is starting to be seen in supply chains, with 39 per cent of active practitioners facing pressure to manage or report on GHG, and 28 per cent placing pressure on their suppliers. It is clear that emissions through the wider supply chain are a growing concern and that businesses can not simply contract out their GHG emission footprints. Wider issues are also outlined in the report including members' experiences and views on green tariff electricity and carbon offsetting.

Future outlook

The Committee on Climate Change in its second annual report to Parliament on progress in meeting carbon budgets, found that carbon dioxide emissions fell by only 0.6 per cent annually in the period prior to the recession. This contrasts with the 2-3 per cent annual cuts required in the period to 2020.

For practitioners a range of challenges exist and the extent of future pressures on organisations will in large part depend upon the speed of progress towards a low carbon and, importantly, a less discussed ‘low energy' economic model.

Whilst debates continue, forward thinking organisations have started. Environment and sustainability professionals are essential in this transformation, helping to achieve the low carbon businesses and organisations that will thrive and make up the future green economy.

The Special Report draws on a comprehensive survey completed by 1,674 IEMA members in April 2010 into the state of GHG management and reporting within the profession. This was followed with eight workshops attended by 200 practitioners. As such, the report represents a substantial body of evidence of interest to professionals and invaluable to policy-makers. To read the full report click here.

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