Introduction
Carbon reporting has become an essential tool for businesses fighting climate change. Some companies are required by law to report their carbon emissions on an annual basis, and other companies are doing it for commercial benefits and to demonstrate their commitment to the environment. Producing a carbon report can increase a business’s corporate transparency, making it more appealing to consumers and investors who credit companies on their sustainability.
By carbon reporting, you can better understand the greenhouse gas emissions that your business emits, and gain a deeper understanding of your company’s environmental impact. Carbon emissions are categorised into Scope 1, 2 and 3 emissions and are tracked throughout the process of carbon reporting.
Recap of Carbon Emissions:
Scope 1: Direct emissions that occur as a result of a company’s activities. For example, from company-owned vehicles or burning natural gas and diesel.
Scope 2: Indirect emissions from electricity. For example, energy usage from heating and cooling in company facilities.
Scope 3: Indirect emissions that occur as a result of a company’s activities, but not within direct control. For example, emissions from the supply chain, business travel and waste disposal.
In this article, we will explore what carbon reporting means, why it is important, the benefits of doing it for your business, and how carbon accounting platforms can help speed up the process.
What is Carbon Reporting?
Carbon reporting is used to publicly disclose the amount of greenhouse gas emitted by your organisation. Creating a carbon report which includes your carbon footprint can help you gain an understanding of where your emissions come from, alongside the environmental impact which your company is causing.
Carbon reporting translates the data from your carbon accounting platform into an environmental report that stakeholders can understand. Carbon reporting can identify a company’s greenhouse gas emissions, helping them understand their environmental impacts and set targets for reducing emissions. Having this data is crucial for companies who want to track their environmental performance and meet their sustainability goals.
The process of carbon reporting began in the 2000s and since then, has been helping companies understand their carbon emissions and environmental impact. By pinpointing specific areas for improvement, companies can efficiently work out their carbon reduction plans.
Why Is Carbon Reporting Important?
As climate change becomes an increasingly critical issue, it is becoming more of a requirement to measure and understand your company’s environmental impact on the planet. Additionally, carbon reporting assists companies with compliance, legal requirements and environmental requirements regarding carbon footprints. Some of these regulations include:
- Kyoto Protocol and Paris Agreement
- European Union Emissions Trading System (EU ETS)
- U.S. Environmental Protection Agency (EPA) GHG Reporting Program
- Nationally Determined Contributions (NDCs)
- UK Carbon Reporting (Streamlined Energy and Carbon Reporting – SECR)
- UK Climate Change Act 2008 (Net Zero Target – net zero emissions by 2050)
Ensuring compliance with these regulations can help companies reach their net zero targets and sustainability goals. In doing so, companies can improve their corporate reputation, increase business retention, and build valuable relationships with stakeholders.
“Climate change remains one of the most urgent challenges for society and we all need to accelerate our actions to reach the 1.5 degree ambition set up in the Paris agreement […]. We encourage EU heads to sharpen emissions reduction targets and deliver on the EU ambition to become climate neutral by 2050.”
Jonas Samuelson, President & CEO, AB Electrolux
How Carbon Reporting Can Benefit Your Business
There are various advantages to carbon reporting, but it mainly helps companies identify their environmental impact and set carbon reduction targets. More benefits include:
- Increased Stakeholder Engagement – Investors and consumers are more attracted to companies who are committed to reducing their carbon emissions.
- Managing Environmental Risks – By better understanding your carbon footprint, companies can implement sustainability goals in order to reduce their carbon footprints.
- Cost Savings – By carbon reporting, companies can identify methods for improving energy efficiency, therefore can lead to cost savings on energy bills.
- Employee Retention and Engagement – Employees are more interested in working for companies who prioritise sustainability. Sustainable company values appeal to employees which increases retention.
- Stay Compliant – As environmental legislation increases, businesses who remain compliant can increase their business reputation.
Reuters Events noted that 65% of their survey respondents said that they were more likely to work for a company with strong environmental policies. Carbon reporting is definitely worth the time to increase your environmental compliance as a business. With the help of carbon accounting platforms, this process can become more time efficient.
How Can Carbon Accounting Platforms Help?
There are numerous ways that carbon accounting platforms can help your business, the main one being cost savings and efficiency. Carbon reporting platforms can:
- Make your sustainability journey easier: Integrated data automations used and AI workflows which focus on making your sustainability efforts more effective and accurate.
- Save you time and money: Your company will not have to spend time and money creating systems or maintaining up to date factors. The platform will do this process for you.
- Remove the risks of financial penalties or reputation damage for non compliance: Carbon reporting systems make and keep you compliant.
- Make you a more competitive and future proofed company: With a committed sustainability plan, your company is more likely to win contracts, enjoy lower staff recruitment costs and gain an increase in staff retention.
To Summarise…
Carbon reporting is the process of translating the raw data from carbon accounting into a comprehensive report which stakeholders can use to access a company’s environmental impact. Carbon reporting includes a company’s goals, strategies and progress towards reducing their carbon emissions. By demonstrating your commitment to sustainability and net zero, your business can attract investors, retain staff for longer, and engage stakeholders. More information on carbon reduction plans can be found on the UK Government website.
By using a carbon accounting platform like Enistic, you can save a lot of time and money throughout the business, while ensuring you are 100% compliant with environmental legislations, therefore avoiding sanctions.
If you are interested in the help we can provide you, please don’t hesitate to contact us.
