#227 From Platform To Proof – What Is The Business Driver For Carbon Accounting And Reporting?

One of the biggest hurdles for businesses when embarking on their journey to net zero is the calculation required for carbon verification. Depending on the nature and size of a business, it can be quite the undertaking!

Those looking to tackle this challenge have various options available to them, including the use of dedicated carbon accounting software, which we’ll explore in our latest mini-series: From Platform to Proof.

In the first episode of this series, we introduce Jay Ruckelshaus, Co-Founder and Head of Policy and Partnerships at Gravity, to explore the key drivers behind carbon accounting and reporting and how you can maximise value from going through the process.

You’ll learn

·      Who is Jay Ruckelshaus?

·      Who are Gravity?

·      Why do businesses measure their carbon footprint?

·      Why is the language of business value becoming more important for sustainability professionals?

·      What are the key drivers for carbon accounting?

·      How has GHG emissions reporting helped to drive business value?

·      What should businesses be thinking about to maximise business value?

·      How can businesses keep up with ever changing sustainability legislation?

·      The importance of data quality

·      How can carbon accounting software help?

 

 

Resources

·      Gravity

·      Carbonology

 

In this episode, we talk about:

[02:05] Episode Summary – We introduce Jay Ruckelshaus, Co-Founder and Head of Policy and Partnerships at Gravity, who will accompany Mel on a 3-part mini-series diving into carbon accounting software and the value it can bring.

In this first episode, they explore the key drivers behind carbon accounting and reporting, and how businesses can maximise the value from the process.

[03:10] Who is Jay Ruckelshaus? Jay’s involvement in sustainability was almost an inevitability, coming from a family of environmental lawyers.

Energy, climate and sustainability were topics that often came up at the dinner table, and so it remained a subject near and dear to his heart.

Initially, Jay thought he would remain in the academic world, studying polarisation and exploring how energy intensive industries think about sustainability. He found his enthusiasm spiked when working directly with companies and individuals on these topics.

As a result, he broke out of the academic world to join forces with a few technology leaders to develop a solution to help businesses measure and reduce their emissions.

[04:45] Who are Gravity?: Jay founded Gravity 4 years ago (2021). It provides a carbon and energy management platform, which assists businesses with compliance to the alphabet soup of sustainability legislation currently in effect, such as CSRD and TCFD.

This platform also uses the data collected to help businesses find and invest in projects to help reduce their emissions, which ultimately saves on energy, costs and utilities.

Their aim was to make it easier for businesses to report their emissions, by streamlining the collection process, and using the data to pre-qualify potential vendors that would fit the businesses needs when it comes to the reduction phase.

Jay initially started with emissions heavy industries such as construction, manufacturing logistics, utilities, metals, mining, energy ect. These are industries where data collection can be very challenging, so it provided a very solid base for their software so that it could tackle these challenges first and provide a way for them to work with various e-commerce, software companies and financial institutions, all within one system.

[09:05] Why do businesses measure their carbon footprint? Historically, back in the 70’s, 80’s and 90’s, sustainability was often wrapped up in the wider corporate social responsibility movement.

We’ve seen a lot of change in the last decade, where we used to have strictly voluntary schemes such as CSR, that are now transitioning into a requirement. Whether that be by stakeholders or legislation.

We’ve also seen a greater interest in ESG metrics, which require solid figures to back up your claims. This trend follows from the introduction of mandatory legislation from the European Union’s CSRD, which is trickling into California law as around 10,000 companies of a certain size that operate in California must now disclose their carbon emissions.

[11:40] Why is the language of business value becoming more important for sustainability professionals? It wasn’t too long ago that sustainability professionals were lumped in with groups that managed general social responsibility.

We’re seeing more dedicated and senior roles in relation to sustainability, such as ‘Chief Sustainability Officer’. These roles now integrate with most every branch of an organisation, from the financial reporting to the general strategy for the business. It becomes a central part of the business.

Its role can reap many benefits for businesses that embed it effectively, including cost cutting, energy reduction, creation or use of innovative products, opening doors to new markets and investment opportunities.

[14:15] What are the key business drivers for carbon accounting? There are many benefits for carbon accounting, such as: -

Saving energy: Energy prices are volatile, and often on the rise. Carbon accounting allows you to have a full view on what you’re consuming and where you can reduce or look to more efficient options.

Building in sustainability from the top down: With increasing scrutiny from stakeholder and consumers regarding sustainability, it’s in leaderships interest to ensure that sustainability is embedded in your business strategy. This alignment sets you up well for the future, In addition to creating an avenue to reap other benefits from meaningful sustainability action.

New opportunities: Embarking on your sustainability journey will open many new doors. Whether this be for innovative new technology, new partners and suppliers that better align with your values, or access to new investment opportunities.

[18:05] How has GHG emissions reporting helped to drive business value? Businesses that get their emissions verified against ISO 14064 can benefit from improved insurance rates and access to green finance.

It’s also a necessary step towards energy and cost savings. You can’t reduce what you can’t measure. Doing this correctly will require time and resources, thankfully we’re at a time where there are a lot of tools to help businesses with data collection for reporting purposes. The key is to understand where you currently stand, and where you can make improvements. From there you can look at vendors to assist and what financing is available to help facilitate the required changes.  

Jay states an example of where Gravity managed to save a US based aluminum foundry over $400,000 in energy costs from their initial assessment. This was achieved through identifying energy hotspots and finding vendors and initiatives to help reduce the energy use and costs.

[21:15] What should businesses be thinking about to maximise business value?: The biggest challenge for carbon accounting is typically gathering the data. There are a lot of things to consider, facility energy usage, travel, home workers ect.

To make this easier, you should ideally have a centralised location to report and track your emissions data. You also need to ensure that this is as accurate as possible.

In order to make sure this doesn’t turn into an annual tick-box exercise, you need to embed proactive processes for monitoring and measuring this data. This way, when you have anomalies in energy usage, you can identify these quickly and put plans in place to address it.

[24:25] How can businesses keep up with ever changing sustainability legislation? In recent years, the goal posts for specific sustainability regulation and legislation has changed a lot.

This is in part due to convergence that is happening between the frameworks, countries and Governments adopting the best bits out of other requirements to make theirs more robust. So, while a lot of the information they’re asking for is largely the same, it can still be very confusing to navigate.

Jay advises that businesses focus on getting a core system for reporting, monitoring and measuring energy usage and carbon emissions in place. Depending on the requirements that you need to adhere to, you can slice and dice that data up however it’s needed, but setting up a unified approach that’s embedded throughout your business to get the data needed is they key.

[28:40] The Importance of data quality: Your first attempt at this process will likely be rough and ready. Gathering the basics of what’s available such as utility bills and general energy usage. Presenting this estimation can make for a great business case to put in place measures to get more granular data.

The more granular the data, the more insightful it can be, offering you more opportunities to save money and implement reduction initiatives.

This data will reveal trends, form benchmarks and present opportunities for meaningful action that benefits both the business and the environment, all while satisfying your legal and regulatory requirements.

[30:50] How can carbon accounting software help?: Data collection is hard, getting the data where you need it to be can be nightmare, especially when multiple departments are involved. Having a centralised location makes this task a lot easier.

Calculating this data into something usable is also tricky, and would likely require a skillset that you won’t have readily available. This may also involve knowledge of conversion factors if you have multiple international locations. Having a system that can manage all of this, while using methodologies that are in alignment with best practice standards is crucial.

Lastly, technology such as carbon accounting software, can really help with creating a proactive approach to the measurement and reporting process. It can reveal anomalies and trends to be acted on, as it can help source vendors and projects to help with emission reductions.

If you’d like to learn more about Gravity and how their energy and carbon accounting software can help you, check out their website.

If you’d like any assistance with Carbon Verification, get in touch with the Carbonology team, they’d be happy to help!

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