“We are looking for companies and individuals who have either funded or developed sustainable solutions which offer direct benefit to the local community, enhances access to clean running water, or energy-efficient innovation to participate in the publication to be nominated for awards,” says Diane Naidoo-Ngcese, MD of The Alchemist PR.
Categories for entry as well as editorial submission include innovation in:
- Transport and logistics
- Education and youth development
- Architecture and construction
- Design and production – advertising and print houses
“Sustainability is often wrongly perceived as a white middle class issue when in reality, the consequences of not going green has a dire impact on the working class. The cost of electricity, the access to clean running water, the overall improvement in the quality of life makes sustainability a non-negotiable if South Africa is to truly offer a better life for all,” comments Naidoo-Ngcese.
Financing options available
Funding institutions such as the Industrial Development Corporation, Development Bank of South Africa are among a host of financing options available for green initiatives. The SA Green Fund alone has a budget of R800m for projects to assist South Africa’s transition to a low carbon economy.
But the innovators and game-changers in this space are either unaware of the funding options or do not have the capacity to create the exposure required to attract the attention of investors. “Green good news stories and projects undertaken through CSI programmes are relegated to internal newsletters, annual reports or corporate presentations, and young entrepreneurs ideas remain ideas. And yet the green economy would be fast-tracked if these ideas were transitioned to a profitable business model that creates jobs and bolster the local economy,” Naidoo-Ngcese says.
“When I started my business nine years ago, consumers did not quite understand what energy-efficient windows and doors were, how they worked or the financial benefits these products represent hold. If the movement for sustainability had access to ad-spend of big global brands, we would see greater community buy-in,” managing director of TEVA Windows, Pieter Malherbe, says.
He says GreenOvation is one small step in ensuring sustainability becomes a mainstream issue which garners mass support, as communities, business and as government. He also believes that if the private sector throws their weight behind this initiative, it will also assist young aspirant entrepreneurs like him to ‘connect the dots between innovation, enterprise development, job creation and the development of the green economy’.
WWF SA has come on board as editorial advisors for the publication, with Saliem Fakir, head of the Living Planet Unit at WWF, to serve on the awards judging panel along with Miss Earth 2004, Catherine Constantinides.
By Teresa Legg
With an increased awareness and concern of environmental issues, specifically global warming and climate change, and growing evidence of the financial benefit of environmental sustainability, stakeholder’s expectations have matured. Shareholders, investors, customers and employees are demanding a better understanding of an organisation’s environmental impacts. Measurement and reporting of greenhouse gas (GHG) emissions provides organisations with the base from which to understand their GHG impacts, manage their GHG risks and embrace the opportunities of a low carbon economy. This also provides a means to effectively communicate these outcomes with relevant stakeholders.
This chapter aims to discuss the benefits of measuring and managing greenhouse gas emissions in business, as well as outline the process and requirements of internationally accepted GHG measurement and reporting frameworks.
What are the Benefits of Reporting GHG Emissions?
The value of embracing a sustainable strategy is demonstrated through reduced costs, profitability, increased efficiencies, increased market share and customer loyalty, as well as reduced business risk, both reputational and financial. More importantly, a sustainable strategy drives innovation in product and technology, standing a company in good stead for long term success.
Embedding environmental sustainability into your strategy requires a thorough understanding of your impacts and the risks and opportunities that these impacts present. These risks and opportunities need to be brought into your strategy, managed and continually reviewed to feed back into strategy.
You cannot however understand the extent of your impacts and manage them without having a solid measurement framework. In light of expected carbon taxation, measurement also allows a prudent organisation to understand the financial risk of its emissions, both internal and external.
Due to the fundamental link between strategy and environmental impacts, executive leaders need to sponsor the measurement and management of GHG emissions. Understanding impacts is key to a sound strategy and therefore strategy should dictate such impact assessments and the results thereof should be fed back into the strategy. Executive commitment also secures funding and resources and places a priority on the carbon footprint project.
Carbon Footprint Reporting Standards for Business
Understanding your carbon footprint is a starting point to identify areas of the business where greenhouse gas emissions occur and where they need to be managed.
So what is a carbon footprint and why can it be complicated? Simply, a carbon footprint is a calculation of the total GHG emissions caused directly and indirectly by an organisation or company. This is typically calculated and reported over a period of 12 months. What often makes a carbon footprint complicated is defining the boundaries of the audit and categorising and reporting emissions in line with international standards and protocols, much like one would report financial information.
The GHG Protocol Corporate Accounting and Reporting Standard, developed by the GHG Protocol Initiative is widely regarded as the standard for corporate GHG accounting and company reporting. From a carbon perspective, the protocol is analogous to the generally accepted financial accounting principles (GAAP) for an organisation’s normal accounting and reporting practices.
The GHG Protocol Initiative is a multi-stakeholder partnership of businesses, non-governmental organisations (NGOs), governments, and others convened by the World Resources Institute (WRI), and the World Business Council for Sustainable Development (WBCSD). The initiative has developed internationally accepted greenhouse gas accounting and reporting standards that have been broadly adopted by business worldwide.
Calculating a Carbon Footprint
The process of calculating a carbon footprint entails translating business activity data into a carbon dioxide equivalent (CO2e) for 7 selected greenhouse gases, namely carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perflourocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen triflouride (NF3).
To find where these GHG emissions occur in business involves building a GHG inventory from which to operate. This is where a carbon footprint can become complicated and may require the skill of a GHG professional in complex operations or business structures.
Planning a GHG Inventory
Your GHG inventory requires a skeleton of business structures, facilities and emission sources from which your emissions data will be sourced. To define what will be measured, the GHG Protocol provides guidance to assist in determining both the organisational and operational boundaries of the carbon footprint. The organisational boundary refers to entities and facilities that will be included while the operational boundary defines which operations and sources of emissions will be included.
The GHG Protocol provides three options to define the organisational boundary. These options are as follows:
Under the equity share approach, a company accounts for GHG emissions from operations according to its share of equity in the operation.
The company has financial control over an operation if it has the ability to direct the financial and operating policies of an operation with a view to gaining economic benefits from its activities. Under this approach, the economic substance of the relationship between the company and the operation takes precedence over the legal ownership status.
Under the operational control approach, a company accounts for emissions from operations over which it has operational control. A company has operational control over an operation if it has authority to introduce and implement operating policies.
The operational control approach is preferred as it provides the most complete GHG inventory. It also lends itself to performance tracking as managers can be held accountable for activities under their control and companies are also likely to have better access to operational data under their control. Most importantly, it has the advantage that a company takes ownership of the GHG emissions that it can directly influence.
Once the boundary approach is decided upon, the entities and facilities included in the boundary are identified and form part of the GHG inventory.
The operational boundary defines which operations and sources of emissions will be included in the carbon footprint. Examples of emission sources include motor vehicles, generators and air conditioning equipment.
GHG emissions are categorised as direct and indirect and accordingly grouped into scopes for accounting and reporting purposes.
Emissions are categorised as ‘direct’ when they are generated from activities or sources within the reporting company’s organisational boundary and which the company owns or controls. Under the GHG Protocol these are called Scope 1 emissions and are accounted for as such. These largely include fuel burned in company owned assets.
‘Indirect’ sources are those emissions related to the company’s activities, but that are emitted from sources owned or controlled by a third party company. These are categorised as either Scope 2 emissions for purchased electricity or as Scope 3 for other non-owned or controlled emissions e.g. rental cars, commercial airlines or paper use.
Under the GHG protocol reporting of Scope 1 and Scope 2 emissions are mandatory. Reporting of Scope 3 emissions is voluntary but encouraged where the activities are material to the overall footprint of the organisation.
The next step involves sourcing business activity information for the relevant emission sources. Business activity data could be electricity consumption or fuel purchases. For each emission source one needs to determine what would be the most appropriate activity units required, e.g. litres of fuel , as well as the availability of such data. Estimations, assumptions and samples may need to be applied where data is incomplete or unavailable.
The data collection process is often an overlooked step, however sourcing the most accurate, appropriate data is vital for the credibility of the report output. As they say, rubbish in, rubbish out. So rigorous quality checks on all data gathered will ensure good quality data is fed into the analysis.
With business activity data for each emission source in hand, the data is converted into carbon dioxide equivalents using formulas and factors that are relevant to the data, organisation and geography concerned.
Relevant, updated factors to apply to the emission calculations also need to be sourced. A review needs to be made on which factors are most relevant bearing in mind the activity data available to the analyst and the geography in which the emission sources occur. Factors are specific to emission source and are generally updated annually. The factor producing the most accurate emission value should be applied.
In its simplest form, a calculation formula would look like this:
Activity data × emissions factor = CO2e emissions
Where activity data quantifies a business activity in units e.g. litres of fuel purchased, tonnes of paper used and the emissions factor converts activity data to emissions values e.g. Kg CO2e per litre fuel or Kg CO2e per tonne of paper used.
However, in reality formulas become more complex where assumptions and estimations need to be applied to incomplete or unavailable data, or where certain emissions require additional factors to be applied. For example in air travel emissions additional factors to account for uplift and radiative forcing are applied.
Due to the varying ability of GHG to trap heat in the atmosphere, each GHG has a ‘global warming potential’. Global warming potential (GWP) refers to a gas’s heat trapping potential relative to that of CO2. Using GWP factors, emissions from all 7 greenhouse gases are converted into a common metric of CO2e and reported as such for consistency and like for like comparisons.
It is important that all formulas, factors, estimations and assumptions are clearly documented in the GHG inventory for transparency and consistency in reporting.
Selecting Base Year and Setting Targets
Managing emissions requires a commitment to reduce absolute emissions or intensity emissions (e.g. emissions per unit of activity). To set this target, one needs to measure against a yardstick – this being the base year emissions. Therefore, a base year needs to be selected from which future years’ performance will be measured against. It is important that the base year emissions are based on reliable emissions data.
Once you have selected a base year, set short and long term targets. Targets can be absolute (e.g. reduce emissions by 5% year on year from base year) or rate based (e.g. reduce emissions per employee headcount or unit of production).
Absolute targets are preferred as they result in a real emissions reduction, whereas emissions may increase in the face of a rate based decrease in emissions.
A strategy and work plan should provide a framework from which to initiate and run reduction projects to meet these targets. This is an on-going process which requires constant measurement and review.
Businesses may want to communicate their performance to stakeholders such as investors, customers, employees or the business community. In reporting information, it is valuable to follow the guiding principles of The GHG Protocol (see insert).
Emissions need to be reported for all seven greenhouse gases separately in metric tonnes of CO2e. Emissions must be categorised and reported by scope, clearly stating the scope totals.
The boundaries of the inventory must be described together with a description of the company.
All emissions information, including methodologies, calculations, assumptions, estimations and exclusions must be disclosed.
The base year must be documented with a view of performance over time.
For credibility of reported information it is wise (and in some cases required) to have your footprint assessed by a 3rd party GHG professional, especially when publically reporting.
Business operates within the context of an environment. Best practice principles, standards and guidelines provide methodologies, processes and guidelines which if followed rigorously will provide a deep understanding of an organisation’s internal and external impacts. For responsible and accountable governance it is imperative to understand and manage the risks and opportunities that emerge from these environmental impacts.
Source: The Sustainable Energy Resource handbook Volume 5
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