Using your EMS to cut GHGs

11th November 2011


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IEMA

Paul Suff investigates how an environmental management system can help organisations report and manage their greenhouse-gas emissions

We will know shortly whether or not the government is to press ahead with mandatory reporting of greenhouse-gas (GHG) emissions by businesses. Affirmation of the introduction of such a duty, which will be linked to changes in the narrative reporting requirements for companies, will see Regulations coming into force in October 2012. The first disclosures will appear in 2013.

If the government decides to adopt option 3 in Defra’s recent consultation, as many as 31,000 organisations will have to supply data. At the other end of the scale, it may simply opt to encourage more voluntary disclosure.

Whatever the outcome, there will be increasing pressure on companies from the government, and others, to report emissions. Companies new to GHG disclosure – and the latest figures from the Carbon Disclosure Project (CDP) reveal that one-third of the UK’s largest firms (FTSE 350) failed to respond to its request for information on emissions this year – will have to establish the processes to collect, account, report and verify the data. A good place to start is an environmental management system (EMS).

A systems approach

Organisations with a certified EMS already have the processes in place that may form the basis for GHG accounting and management. Both environmental management standard ISO 14001 and the European eco-management and audit scheme (EMAS) support the measurement and reporting of GHG emissions. Both apply the “plan-do-check-act” framework to manage environmental responsibilities, including monitoring and collecting data (see below).

Those with an EMS that are also covered by existing regulatory measures, such as the Carbon Reduction Commitment Energy Efficiency (CRC) scheme and/or the EU emissions trading scheme, may already be using their systems to manage compliance. The 14001 standard requires certified organisations to maintain an inventory of relevant legislation. It is best practice to regularly audit compliance, although there is no formal requirement to do so.

EMAS goes further, making it obligatory to demonstrate full legal compliance and to routinely conduct a compliance audit. The revised EMAS Regulations (1221/2009), which came into force on 11 January 2010, make monitoring and reporting on all six main GHGs – CO2, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride – a core indicator of performance. Registered organisations must report annually on their GHG performance and be able to demonstrate continuous improvement.

Ania Campbell, environment audit and compliance officer at Leeds City Council, which has been EMAS-registered since 2002, confirms that the standard ensures the council actively reports its emissions. “EMAS helps with reporting emissions because it forces organisations to focus on these issues. Having a registered EMS means the organisation is familiar with gathering and reporting data, so the processes are already in place to report on emissions,” she explains.

Until recently, local authorities in England have had to report emissions from their own estates and operations under national indicator 185 (NI 185). “When NI 185 came in, it required us to actively report our CO2 emissions, something we had been doing through EMAS anyway,” adds Campbell. “It asked for a bit more data, but we already had the reporting framework in place thanks to our EMS.”

Long-term thinking

To obtain the maximum benefit from managing GHG emissions through an EMS, organisations need to make more creative use of their certified systems. At the same time, many existing arrangements may require some tweaking in several areas.

Only half (52%) of organisations publicly report their emissions through 14001 or EMAS (for example, in a corporate environmental report), according to a recent poll of IEMA members. And only one-third of those do so regularly.

The 2010 poll, on GHG management and reporting, also found that IEMA members would like to see a closer link between 14001 and GHG reporting, possibly via guidance on how to link the two.

IEMA plans to publish a briefing note by the end of the year on the link between 14001 and GHG reporting. It has already set out its GHG management hierarchy, a planning and conceptual tool to assist practitioners and organisations when developing and implementing strategic approaches to reducing carbon and other GHG emissions.

Nigel Leehane, managing director and technical lead for environmental management and climate change services at Conestoga-Rovers & Associates, says the first step to improving an existing system is to map it against emissions-reporting frameworks such as the GHG Protocol, the Defra reporting guidelines or ISO GHG accounting standards, to identify what needs to be done in order to report emissions more effectively.

That is a start, and while GHG emissions can, and should, be included in the EMS environmental aspects and impacts register, some experts are of the opinion that organisations should go further and adopt a more strategic approach.

Nick Blyth, senior climate change adviser at IEMA, suggests that the urgent need for global emissions to peak in order to stabilise the global temperature increase at no more than 2°C, the level needed to avoid dangerous climate change, alters how organisations should think about their own significant environmental aspects – that is, an organisation’s activities that impact on the environment. “Fifteen years ago, when 14001 was launched, climate change and managing GHG emissions were not always identified as significant aspects by organisations,” Blyth explains.

“What level of significance should you place on emissions today as global emissions continue to rise and we approach environmental limits?” he asks. “It is now fully appropriate to regard further emissions as both cumulative and increasingly significant. It’s a different perspective when assessing the significance of environmental aspects.”

IEMA policy director Martin Baxter agrees: “Achieving the UK’s fourth carbon budget, which includes halving carbon emissions by 2025 compared with 1990 levels, and the long-term 80% reduction goal by 2050, requires businesses to act. Companies’ carbon-reduction goals will play a big part in the UK meeting its emissions objectives, so their targets and timescales should mirror the government’s. It’s not good enough in most cases for the EMS to generate short-term targets of, say, three years, when long-term planning and thinking are necessary.”

Baxter gives the example of a decision to invest in capital equipment with a relatively long lifespan: “If you don’t think about the equipment’s environmental performance 10 or 15 years down the line, it risks being a ‘stranded asset’, having become obsolete because its impacts are too great. The EMS needs to support long-term thinking, so we know we’re moving in the right direction.” Recent data from the CDP suggest that few companies are taking a long-term view – just 15% of 236 FTSE 350 companies it surveyed had emissions-reduction targets stretching beyond 2020.

Baxter says it is not simply a case of the EMS setting a long-term target and working backwards in two- or three-year time periods. “We need to think more about the actual targets, set clear objectives, the building blocks to get there and how the EMS will drive action.”

Data accuracy

Although there is an expectation that performance data are accurate and complete, there is no explicit requirement in 14001 for such precision, so much will depend on the level of accuracy demanded by the government if it proceeds with mandatory reporting.

The CRC data must be within a 5% margin of error, for example, with participants fined £40 for each tonne of CO2 incorrectly reported. Any mandatory reporting requirement will be through the Companies Act and may demand a similar level of accuracy.

Baxter agrees that the precision required is likely to be set high, as is the case with financial data. But he says data used internally to identify where improvements can be made might not need the same degree of accuracy, and can rely more on estimations. “It’s about what you are going to use the data for. You need to ask yourself whether it is fit for purpose.”

The current Defra guidelines on GHG reporting say that reports should aim to achieve sufficient accuracy to enable users to make decisions with reasonable assurance as to the integrity of the reported information.

Campbell at Leeds City Council says that as a result of the reporting requirements of NI 185, initial meetings took place between key players to establish where responsibility for data collection would lie and to clarify and discuss any issues in collecting data. These meetings, she explains, provided the groundwork for establishing the structure of data collection and provided a forum for exchanging ideas. To help visualise how the data are collected, the council has developed the use of flow diagrams. As a result, most of the information needed to report emissions is now relatively easy to gather.

Campbell says that Leeds wants its data to be as reliable as possible, so the EMAS team tries not to make too many assumptions, preferring to go back to the data providers to ensure accuracy and reliability in order to fill in any gaps. “However, there will always be inaccuracies. For example, if a council worker uses a pool car but does not put in a claim, then the data are incomplete. We try to ensure that they are as accurate as possible,” she comments.

She also says the EMAS team is good at spotting anomalies. “Because we’ve been doing it for a while, you can often spot when the data look suspicious. We always check the data against the previous year’s submissions. Last year we had a harsh winter so that skewed the energy data, while a long-running strike by refuse workers in 2010 affected the transport figures, as there were fewer refuse trucks on the road. Ultimately we have confidence in the data.”

The data are collated in a central spreadsheet that only the core EMAS team can access. Campbell says that, over time, the data providers know what is required of them, and when. “We now just send email reminders to the data providers, alerting them to the deadline. They know what to do,” she says. “The process only needs to alter if we decide we need more information.”

As well as gathering accurate data, organisations also need the competence to analyse effectively the information to determine the focus for ongoing activity and deliver continuous reductions.

“An organisation may be good at collecting the data, but someone has to be able to properly interpret it to support decision making. What you do with the data is key,” advises Baxter.

Leehane agrees that user competence is crucial if the data are going to help organisations better manage their emissions. He advises training key personnel in specific auditing and analytical skills, so that decision-makers can have confidence in the data. He adds that it is important that decision-makers themselves understand how emissions-reduction initiatives will support management objectives.

Third-party auditors also need to be competent in managing and reporting GHG emissions if they are to help clients to both comply and meet their own targets and objectives.

Finding the answers

ISO 14001 and EMAS demand continuous performance improvement, but both standards are pretty vague on how to generate improvement ideas. Leehane believes that energy standards can help with GHG emissions reporting and reduction, particularly with identifying ideas where improvements can be made. “An energy standard like ISO 16001 [and now 50001] can be fairly easily integrated into 14001, as it is based on the plan-do-check-act model,” he says.

“It might help solve the problem of how to identify areas for improvement, as 16001 contains requirements such as comparing energy performance indicators with those of similar organisations, to assist such activity.” He says the guidance in Annex A to the 16001 standard is particularly useful, providing more detail on identifying, managing and measuring energy-related practices. Leehane also advises organisations to keep an eye on sector initiatives on managing and reducing emissions, as they should provide relevant guidance and ideas.

The Carbon Trust standard and similar mechanisms, including Achilles’s certified emissions measurement and reduction scheme and BSI’s kitemark for energy reduction verification, also support emissions disclosure and can help identify where to target improvement activity. Other international standards, such as ISO 14064, provide criteria for quantifying, monitoring and reporting emissions and reductions.

The enduring axiom that you can’t manage what you don’t measure certainly applies to GHG emissions. Existing environmental management systems provide the starting point for effective evaluation, and with a little tweaking can constitute a powerful tool to help organisations make significant reductions.

The number of UK organisations with a certified-14001 or EMAS-registered EMS is relatively small. ISO reports that in 2009 (the most recent figures available) there were 4,985 14001 certifications in the UK, while the latest EMAS figures from the European Commission show that at the end of September 2011 only 60 organisations and 291 sites in the UK were registered to the European standard.

They, at least, should have a head start when it comes to accounting and reporting GHG emissions.


GHG emissions and the plan-do-check-act model

The plan-do-check-act modelVarious aspects of the plan-do-check-act model, which underpins both ISO 14001 and the EU eco-management and audit scheme (EMAS), provide plenty of opportunities to monitor, collect data, set targets and reduce greenhouse-gas (GHG) emissions.

Plan: At the outset, a statement on tackling GHG emissions can be included in the environment policy that is a necessary requirement for both 14001 (clause 4.2) and EMAS. The environmental policy outlines the organisation’s mission and the driving force behind the objectives, targets and management programme for the EMS. Clause 4.3.3 of 14001 focuses specifically on objectives, targets and implementation plans. GHG emissions can be included in the environmental aspects and impacts register that is required by 14001 (4.3.1). These are drawn up following an assessment of how the organisation interacts with the environment, identifying those aspects that are significant. Aspects are elements of an organisation’s activities, products or services that can interact with the environment, while impacts are any change to the environment resulting from its activities, products or services.

Reduction targets and objectives can be set for aspects of operations and activities that contribute to atmospheric emissions.

Should the government introduce mandatory reporting, the relevant Regulations will have to be included in the legal register – legislation and other requirements that are applicable to the company – that is a requirement of 14001 (4.3.2). Other requirements could include demands by clients and customers to disclose GHG data. Planning also provides the opportunity to build the business case for reducing emissions.

Do: Implement environment management programmes to meet objectives and targets (4.3.3); target activities to raise awareness (4.4.2) among employees of the environmental policy, and specifically the GHG reduction goals; train relevant personnel (also 4.4.2) to raise their competence in areas such as GHG science, calculation methods and reporting techniques.

Individuals will be made responsible (4.4.1) for managing and implementing the different components of the EMS system to control emissions. They should communicate (4.4.3) progress on meeting GHG objectives and targets throughout the organisation, helping to engage the workforce in the process. Operational controls (4.4.6), such as standard operating procedures, will ensure current emissions are under control.

Check: Regularly monitoring and measuring (4.5.1) GHG emissions will track progress towards targets and help to manage energy and emissions reduction. Records (4.5.4) will demonstrate that procedures are being performed effectively. In addition, evaluation of compliance (4.5.2), which, although not a requirement for certification, involves an independent third party evaluating the EMS, demonstrates that an organisation has fulfilled its policy commitments, including having a process to ensure legal compliance. The internal EMS audit (4.5.5) ensures the effectiveness of the EMS and the continuous improvement cycle. Regular management reviews (4.6) will test management programmes and procedures to see if they are achieving the desired objectives and to identify areas for change. Periodic reviews of targets and objectives will determine whether they are sufficient or need altering in some way.

Act: Changes should be made to management programmes, processes and procedures to deliver better results and meet changing targets and objectives. Behavioural modification to better fulfil environmental policy requirements or overall business strategy should be encouraged. Investment programmes should be designed to improve energy efficiency, reduce emissions by adopting renewable and/or low-carbon technologies, and offset residual or unavoidable emissions.


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