Carbon Output Concealed by Brands
Are the carbon footprints reported by companies correct, or do they hide something? The increased use of renewables has helped to decrease overall emissions, with the UK’s greenhouse gas output having halved since 1990 according to the Office of National Statistics; but the data does not always show the real story.
Carbon Reporting
One of the quickest/easiest ways to reducing greenhouse gases is to lower demand, with rising pressure for UK organisations to report effectively on their environmental impact.
Unfortunately, the traditional metrics of analysing carbon emissions make it easy for companies to fabricate their results. Thousands of businesses nationwide have committed to introducing plans to meet net-zero, however, to truly reach net-zero requires significant time and energy, which many want to sail past.
Some organisations report on the emissions that are generated during the manufacturing process but fail to report on emissions created by their staff, the end use of products and waste; resulting in figures being much higher than those reported. By not showing the full picture, organisations are able to claim to be working towards net-zero faster than their competitors.
Luckily, there is growing external pressure for net-zero strategies to be clearer, with more companies signing up to transparency plans.
Scope 1 and 2
Within net-zero reporting there are Scopes 1 and 2 and these are arguably the easiest places to report on:
Scope 1 covers ‘direct’ carbon emissions which are produced by a business by burning for example natural gas for heating.
Scope 2 covers ‘indirect’ emission such as the usage of electricity within the business, making them slightly harder to assess. Whilst organisations that purchase renewably sourced electricity may report confidently, the data depends on what the suppliers report on.
It seems that the hardest element to report on is the use of biomass and its effect on greenhouse gases. An example of this is the use of forestry for wood pellets, often then used in boilers/furnaces to generate energy. Whilst using wood is seen as environmentally friendly, there are issues with identifying the greenhouse gases released. In addition, it takes many years for replanted forests to become carbon sinks replacing the carbon lost from the old forests. This creates a loophole for companies.
Scope 3
Scope 3 offers more complication, as this section focuses on emissions that take place outside of an organisation’s direct control. The main issue with this is that organisations are often left to their own devices on what to report on. Whilst some focus on emissions generated by users, others focus on their upstream supply chain.
In addition to emissions not being directly comparable in reporting, double accounting may also be an issue within Scope 3 reporting. Some companies may report on emissions of their customer base, whilst others may have already included this information within their Scope 2 reporting, as suppliers have limited visibility into what levels have already been reported on.
However, double counting may have a beneficial impact – it encourages organisations to more efficiently use fuels and materials, incentivising them to improve their current activities rather than creating a tool to allocate CO2 to a specific company.
Carbon Pricing
An alternative to make carbon reporting more accurate is to give carbon a price to recognise its impact. However, this would require the global community to agree on a realistic price for carbon, which seems unlikely and means that currently organisations are using an internal price – leading to discrepancies and resulting in an impossible accurate usage comparison.
Outlook
Unfortunately, many organisations continue to use falsified and misleading data in their carbon emissions reports, leading to inaccurate statements which means it is near impossible to accurately analyse the carbon position of the country. To tackle these issues, rules of reporting must be definitive, with clear processes for organisations to meet.
