SUSTAINABILITY FOCUS 8

As the world pushes towards net-zero, organisations are duty-bound to live up to their environmental responsibility to drive down their carbon emissions. Aside from the moral incentive, failing to take action will result in damage to their brand, loss of customers and even difficulty in attracting and retaining talent. 

Even organisations with the best plans and intentions to reduce their carbon emissions face a huge obstacle… understanding what their carbon footprint is. If you don’t fully understand the emissions you are producing and where they come from, how can you make improvements? While there are a large range of specialist consultancies and online ‘carbon calculators’ available, you still need coherent data to be collected on your businesses activities to accurately produce these figures. Although still often challenging, collection of such data is more straightforward for the emissions that are in the companies control (scope 2 & 3 emissions), for example running their fleet vehicles or the energy consumption at their premises. It's the emissions that are outside of their control like waste collections for example (scope 3) that can be next to impossible to get a handle on, particularly for large organisations with complex supply chains. 

Imagine you're a large multinational organisation with thousands of suppliers providing a range of different services from manufacturing to distribution to maintenance, all using separate unconnected IT systems, then where do you even start to collect the data relevant to calculate the emissions relating to these activities. It's no wonder many organisations often exclude certain activities from their calculations in their yearly carbon neutrality statements, remarking that they are ‘not financially viable to measure’. However these scope 3 emissions can account for more than 70% of a company's carbon footprint, so surely this is an important problem to solve and shouldn’t be brushed aside with a simple caveat?

Let's take a more in-depth look at the construction industry for example. The construction industry after all produces a significant 20% of global carbon emissions according to Global ABC. It's quite straightforward for a construction contractor to collect data on and reduce the emissions relating to the fuel/energy used on each site as well as their direct employees' mileage. It becomes a lot harder to collect emissions data relating to their subcontractors travel, the materials they use and the logistics network used to transport those materials. 

Take their waste emissions, for example, as discussed this is incredibly difficult for most companies to calculate. A construction company with £1million annual waste spend, operating across the UK, might have between 30-60 individual waste contractors servicing around 3000 - 4000 collections. Collecting emissions data on the transport and processing of all of these waste transactions from all of these individual suppliers would not be financially viable, and as such many companies are not able to reduce their carbon footprint relating to waste collections.

So how can this problem be solved and what are the expected results? Well as this is an issue with data collection, the obvious solution is IT innovation. Specifically, improvements need to be made to existing software solutions used across supply chains (e.g. logistics, time & asset management software), which will allow users to calculate their emissions relating to their business activities and distribute that data to other platforms used in the value chain. In a lot of cases, the necessary data will already be being collected and the system will just need to make calculations combining that data with published emission conversion factors. 

However, if you're an organisation, for this to work in its entirety, your whole supply chain will need these features in the software they use and a huge amount of API’s will need to be built. For you to be able to implement this yourself would require a significant amount of change, particularly if you have large, disparate legacy systems. Instead, you should be focussing on what you do best and what’s central to your business.

Another solution is for organisations to engage with companies that operate a managed service model and who possess the necessary technology to collect data on, reduce and offset carbon emissions whilst performing the required service on a national or international level. 

An example of this managed service model in action is Envirovue, an outsourced waste management company that operates across the UK, serving customers in the construction, utilities, manufacturing and retail sectors. Through the development of their IT systems, they can calculate the carbon emissions relating to the transport and disposal of every waste movement booked through their system. The relative carbon footprint is then automatically offset through donations to gold standard projects. These business intelligence tools are also used in the form of a ‘Best Match Calculation’ feature which benchmarks suppliers based on their locality to each site to reduce emissions at the front end, with the added benefit of engaging in local SMEs.

Envirovue estimates that there are between 1 - 1.5 million tonnes CO2e relating to construction waste alone that is left unmeasured each year. It’s likely that scope 3 emissions similar to this aren’t being measured across a range of different industries. As such, it’s difficult to take action to reduce these emissions as well as offset them, which is essential if we want to reach net zero.

https://globalabc.org/resources/publications/2021-global-status-report-buildings-and-construction

https://www2.deloitte.com/uk/en/focus/climate-change/zero-in-on-scope-1-2-and-3-emissions.html