As governments continue to pursue net-zero targets, businesses are anticipating increased scrutiny of their impact on the environment, including greenhouse gas (GHG) emissions. One of the more significant challenges in measuring emissions is determining what is or isn’t included in the measurement. To help in this matter, the Corporate Value Chain (Scope 3) Accounting and Reporting Standard has classified emissions into three categories to distinguish between those created directly by a company and those created by its wider value chain.
What are the different types of emissions?
The differentiation into three different types of emissions was first developed by the GHG Protocol in 2001 and can be summarized as follows:
Scope 1: Direct emissions that result from activities within your organization’s control. This might include onsite fuel combustion, manufacturing and process emissions, refrigerant losses, or company vehicles.
Scope 2: Indirect emissions from electricity, heat, or steam that you purchase and use. Although not directly in control of the emissions, by using the energy you are indirectly responsible for the release of CO2.
Scope 3: Any other indirect emissions from sources outside of your direct control. This category covers all the emissions associated, not with the company itself, but those for which the organization is indirectly responsible up and down the value chain. This includes purchased goods and services, use of sold goods, business travel, commuting, waste disposal, and water consumption.
An environmental road map to transformation
Our environmental roadmap supports you at each stage of your transformation journey, whether you are starting from scratch or in the process of executing your strategy. This roadmap will help break down your emissions into one of the three categories, and what you need to report.
Get engaged
Start
Organization's acceptance to change and prioritize environmental as fundamental to the way it operates its business.
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- Accept there is a need for change
- Engage all aspects of the business
- Speak to advisors
Set the compass
Strategy and roadmap
Develop an environmental strategy aligned with business needs to deliver a positive impact to environment and society.
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- Carry out an environmental opportunities and risks assessment
- Assess business against current market and competitors
- Develop opportunities/risk matrix and strategic plan for environmental
- Develop a gap analysis and bridge to meet regulatory reporting
- Develop a roadmap prioritizing the business’ environmental related goals
- Develop reporting matrix prioritizing key environmental targets
Measure
Business assessment
Assess current business operations and develop a base case to understand the opportunities and threats posed by the business to the environment, and eligibility for any energy and carbon reduction funding.
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- Do business base case assessments against environmental regulatory parameters
- Carry put an operational assessment including future growth aspirations and the impact on environment
- Develop future projected forecast based on decarbonization targets
- Identify the risks and opportunities for the business
- Assess and support eligibility for national funding/subsidies to support clients’ environmental projects
Drive change
Transform and implement
Develop a roadmap which allows the business to implement transformation and reduce its impact to the environment.
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- Identify high-risk areas across the business and largest contributors to carbon emissions and their impact on the environment
- Outline alternative technology to target emissions reduction
- Develop CAPEX investment (funding) requirements to drive transformation across the business to achieve decarbonization targets
- Transformation from a people perspective to gain buy-in to the business strategy
Prioritize
Evaluate
Monitor business’ post-transformation performance and align to regulatory and financial reporting against environmental net-zero targets.
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- Monitor business post-transformation and report against set targets
- Engage in internal reporting and auditing
- Provide a corporate report
- Gain support to understand regulatory requirements
- Develop report methodology and matrix to allow visibility against ESG targets for business
Keep going
Sustain
Continually align strategy with the business needs that deliver a positive impact to environment and society.
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- Monitor strategy
- Continue to align with changing business needs
- Continue to have positive impact on the environment
Benefits of a well-defined environmental strategy
- Reduces emissions and safeguards the business from rising carbon tax costs
- Reduces energy consumption and protects the business against energy price rises
- Supports compliance with regulations and international reporting standards, including Scope 3 Standard disclosures
- Reduces the negative impact of an organization to the environment
How we can help
We see the importance of being a sustainably profitable business where we can pay forward a valuable legacy to future generations. Sustainability lies at the heart of our business, and we continually review the choices we make to ensure our firm is truly sustainable on many levels.
We work collaboratively to support our clients in achieving their sustainability goals. If you would like to discuss ways that your business can enhance its sustainability efforts, please contact us.
