As the global economy travels (rather too slowly) towards a greener horizon, growing numbers of companies find themselves navigating the difficult terrain of climate reporting. Driven by mounting pressure from key stakeholders, firms are increasingly compelled to disclose their environmental performance.
Climate reporting is complex, comprising both mandatory and voluntary aspects, contingent on the organisation’s jurisdiction and scale. Historically, the focus of such reporting has primarily rested on quantifying and divulging a company’s greenhouse gas (GHG) emissions. However, demands for better strategic information have ushered in new requirements that encompass not just emissions but also the provision of a strategic transition plan that underpins the carbon accounting report.
Put simply, a transition plan is a corporate roadmap towards a more harmonious relationship with the environment. It lays out the route an organisation will follow to contribute to the future low-carbon economy, where emissions and negative ecological impacts are minimised.
Furthermore, these plans detail how companies intend to flourish in a future shaped by the forces of climate change. This broader framework of corporate responsibility and commitment is firmly in the territory of ‘environmental and social governance’, a cornerstone of modern organisational management.
Scaling down
Historically the domain of larger corporations, transition planning involves scrutinising the supply chain, which for large organisations usually includes a number of small and medium-sized enterprises (SMEs). SMEs, owing to their interdependence with larger entities, are being inexorably drawn into the orbit of transition planning and producing roadmaps of their own.
The crux of the challenge for SMEs lies in the scarcity of tailored guidance commensurate with their scale. Many are enthusiastic to embark on this journey but are left floundering, unsure of the initial steps. Meanwhile, those that have ventured into transition planning seek approval of their efforts. IEMA’s new Transition Planning for SMEs guidance is designed to support hesitant SMEs and offer fresh insights to those already navigating this transformative terrain.
In shaping this guidance, the project team consulted with SMEs to identify their core challenges. The result is a practical set of recommendations, culled from real-world case studies of organisations of varying sizes but written for a target audience of SMEs.
Reporting requirements
A frequently reported difficulty was understanding the different reporting requirements, and the guidance proposes a foundational approach specific to SMEs that can later expand in tandem with the organisation’s growth or evolving reporting standards.
Overcoming resistance from senior management and securing resources for the transition is a common stumbling block for SMEs. Within the guidance, valuable insights gleaned from case studies suggest how SMEs can articulate a compelling business case for transition planning. The agility of smaller organisations often emerges as a hidden asset once the decision to act is made.
Target-setting rationales
Setting pertinent targets is another puzzle for SMEs. IEMA’s guidance gives SME-specific rationales for target setting, surveys diverse initiatives for setting benchmarks and offers advice on tailoring the approach to each organisation.
Understanding scope 3 emissions embedded within supply chains is a herculean task for SMEs. The guidance steers SMEs through boundary definitions and suggests further reading for establishing a robust greenhouse gas (GHG) inventory. Case studies illustrating how organisations tackle GHG emissions within their supply chains provide SMEs with scalable and transferable blueprints for action and planning.
Lastly, the guidance reviews different reporting formats and the questions of verification and validation.
The guidance is available for members at www.bit.ly/SMETransitionPlanning
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