Soaring pressures from consumers and governments all over the world are forcing companies to reduce their carbon footprint. It is a shift from a purely economic market towards a more environmentally-conscious one, driven by consumers demanding more sustainable initiatives from businesses.
Numerous countries, including the UK, Japan, Canada, and the EU countries, have set legally binding targets to achieve net-zero emissions by 2050. This implies that SMEs and large corporations in these countries need to start managing and reducing their carbon footprint as soon as possible. And even though reporting emissions is not yet mandatory in every country across the globe, it is expected to become more widespread and stricter.
In order to speed up the process of reducing carbon emissions globally, governments are set to impose stricter requirements on businesses in order to meet the targets. For example:
Accounting for emissions might seem to be a daunting task, particularly when it comes to large companies with multiple moving parts. However, there are large financial and non-financial incentives toward carbon accounting, particularly using the Greenhouse Gas Protocol.
The Greenhouse Gas (GHG) Protocol is a standardised carbon accounting framework enabling companies of all sizes across the world to accurately account for their carbon emissions. It provides all the tools, methods, and guidance necessary to account for the company’s emissions.
The GHG Protocol is used by governments, industry associations, nonprofit agencies, and corporations. In 2016, about 92% of Fortune 500 companies employed the protocol, either directly or through a custom program.
The Greenhouse Gas Protocol breaks down the emissions into 3 scopes (categories):
Each scope can be further broken down and enable a company to determine which part of its value chain produces the most emissions and where they can be reduced.
The GHG Protocol is an invaluable tool for businesses that are looking to understand their environmental impact as well as for stakeholders that are looking to understand the risks they are exposed to. A win-win!
Accounting for emissions doesn’t just help the overall goal of a carbon-neutral future. There are numerous financial and non-financial benefits of reporting and reducing carbon emissions.
Stakeholders are increasingly more aware of the risks that are posed by carbon emissions. Disclosing climate-related information helps investors, consumers, and other stakeholders to evaluate the non-financial performance of large companies and encourage these companies to develop a responsible approach to business.
The notion that helping the environment has zero financial gains is a past myth. Sustainable investing is on the rise as high ESG scores and strong financial performance are correlated.
Your business won’t have to spend extra money to compensate for carbon emissions, for example in carbon taxes, if you start managing and reducing them before it’s too late. Moreover, companies that take sustainable actions can access green funding to support these initiatives.
There has been a cultural shift in consumer preference and it is expected to increase. More and more customers care about the environmental impact of their favourite brands and are willing to switch to climate-conscious alternatives.
Environmental regulations are predicted to affect businesses of all sizes and we are just getting started. Now is the time to use the opportunity to discover how sustainability can give your business a competitive advantage so you can outcompete your rivals.
There are a few problems when it comes to reporting and benchmarking carbon emissions.
The bottom line is - without standardisation of the data, comparing emissions brings unreliable results, creates bias and can lead to misinterpretation of the data.
To solve this, we developed a rigorous methodology to standardise scope emissions reliably.
In our methodology, we ensure that:
At Connect Earth, we aim to foster innovation in the climate space by removing one of the most challenging barriers: the aggregation and standardisation of emissions data. We empower businesses to innovate at a much faster rate by doing the heavy lifting for them through our climate tech infrastructure.
Reach out to us if you think Connect Earth can help your business!
About Connect Earth:
Founded in 2021, Connect Earth is a London-based environmental data company that democratises easy access to sustainability data. With its carbon tracking API technology, Connect Earth is on a mission to empower people to make sustainable choices and bridge the gap between intent, knowledge and action. Connect Earth supports financial institutions in offering their customers transparent insight into the climate impact of their daily spending and drives sustainable finance.