News & Media > Sustainability

18:03:2010

Getting the measure of green success

Dr Tom Macagno, May Gurney’s head of sustainability, says that financial reporting alone cannot indicate whether prosperity lies ahead for a business.

In his regular column in the Eastern Daily Press (EDP) on 5 March, Tom said:

“Any successful business will keep a close eye on its costs and budgets, to make sure it's on track to meet goals and ambitions for growth.

“But financial reporting alone cannot indicate whether your business has prosperity ahead.

“All of our businesses have for years been based on the assumption of cheap energy prices. But the energy world is changing rapidly and, if you want your business to flourish in years to come, you need to start measuring your carbon footprint now.

“Energy companies face huge costs to adapt to new technologies to prevent climate change, while politically unstable supplies and increasingly expensive sources mean energy prices will continue to rise.

“So businesses need to find a way to decouple themselves from non-renewable fossil fuels. Measuring your footprint gauges that dependency on expensive carbon.

“By arming yourself with this information you can start to develop a strategy for strengthening the company for the future. But where to start?

“A carbon footprint assessment is divided into two simple parts. First, the amount of energy consumed to run your business. Things like vehicle fuel, electricity and gas which make up the operational carbon footprint. Second is the energy used to produce and transport the products and services from suppliers to keep the business running - the embedded carbon footprint.

“If you do one thing today, start by calculating the operational carbon footprint. This is something that all organisations, from a sole trader to a multinational, can do easily. And the experience gained will prepare you for the next step - measuring the embedded footprint which is a longer-term and more complicated goal.

“Start by looking at energy and fuel bills which will give all the information needed to assess the amount of energy consumed by the business, typically in kWh or litres.

“Once the data is collected, use tables published by Defra or The Carbon Trust to convert energy consumption into carbon. Every litre of diesel equals 2.63kg of CO2. So if the business consumed 1,000 litres in one year then the carbon footprint would be 2,630 kg or 2.63 tonnes of CO2.

“Now you've made a start, make a commitment to measure and report regularly. Organisations that are serious about reducing the dependence on expensive carbon will measure their footprint monthly. Monthly measurement illustrates active carbon management.

“At May Gurney, we first measured our annual carbon footprint in 2007. This initial step identified the different data sources that we needed to monitor. The first year is the most challenging, but seeing the benefits, we persisted. And, in 2008, we introduced monthly carbon reporting. The process is repetitious and a learning curve. But you can only get experience by doing it, and doing it regularly, not sitting on the fence.

“Last year a third party audited and certified our carbon footprint. Certification demonstrates accuracy of data and establishes credibility to your commitment to reducing carbon. Achilles CEMARS and The Carbon Trust offer certification programmes if you want to seek third party endorsement.

“So once you start to understand your carbon impact, how do you compare against the competition? It's still early days to meaningfully benchmark against competitors. As a business community, we do not understand enough yet. But in the future, organisations will need to monitor carbon footprints like profitability - viewing it as an indicator of performance and opportunity. In time, companies and industries will exhibit a range of predictable performance targets. When this happens, carbon benchmarks will become meaningful.

“Lastly, can carbon reduction really give a competitive edge? Absolutely. Carbon footprinting is a proxy of management quality. It demonstrates an organisation's ability to align and manage the cost of running a business today with expectations of the future. So to prove the robustness of your management and your company, start your carbon report today.”