Sunday, January 15, 2012

Ten examples of Carbon Footprint Reporting

There are just 7 days to go until close of voting in the CRRA '12 fifth annual online reporting awards. While you are finalizing your votes, please consider voting for my own Sustainability Report - How a little consulting firm makes a big impact - which is entered in four categories: Best Report, Best First Time Report, Best SME Report and Best Creativity in Communications. Additionally, you might also please consider reviewing and voting for the Baran Group Report - which I worked on - which is entered in two categories: Best Relevance and Materiality and Best Openness and Honesty.

If you want a recap of the awards this year and the reports entered, you could look at the three posts I have written about CRRA '12:
Today, I thought I would see how companies are reporting on carbon, by reviewing the Best Carbon Disclosure Category. The Awards guidelines ask us to consider: Which report gives the best disclosure of the company’s carbon emissions, the implications for climate change, and the mitigation measures taken? Check for policy, quantified data, targets.

There are just 10 entries this time around in this category, three from the U.S., two from Brazil and the UK, and one each from the Netherlands, Austria and Finland. Here they all are in alfa order:

Amcor Limited - global packaging manufacturer
Royal Dutch Shell plc - energy
Tieto Corporation - IT and product engineering services company
Wyndham Worldwide Corporation - hotels and leisure

You might think it would be quite straightforward to report on Carbon Emissions. After all, it's one of the most measurable and trackable areas of sustainability performance.

The GRI Indicators covering carbon emissions are simply stated (all the reports in this category in CRRA '12 are written in accordance with the GRI Framework):
EN16:  Total direct and indirect greenhouse gas emissions by weight.
EN18: Initiatives to reduce greenhouse gas emissions and reductions achieved.

Calculation of carbon emissions often uses the framework of the Greenhouse Gas Protocol which defines three scopes. The GHG Protocol further categorizes these direct and indirect emissions into three broad scopes:

Scope 1: All direct GHG emissions from sources that are owned or controlled by the reporting entity.
Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam.
Scope 3: Other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities (e.g. Transmission & Distribution  losses) not covered in Scope 2, outsourced activities, waste disposal, etc.

However, in addition to these indicators, each company can choose to disclose a host of information which puts the data into a certain context relative to the organization's overall impacts and performance, explains the sources of carbon emissions and actions taken to control carbon emission impacts. What we actually find is that companies tend to report in very different ways. Some more detailed, some less. Some clearer, some less. Some barely giving more than a single number, some offering long stories and explanations. Some also refer to their carbon impacts on third parties - indirect impacts - which are often greater than the directly generated impacts of doing their business. All in all, reporting on carbon is as diverse as the carbon performance of companies itself. Looking at the ten companies which entered their reports in this category, aspiring to be the Best Carbon Disclosure reporters, I found this to be true.

What would I expect the best carbon disclosure to include?
  • Overall absolute emissions - the scope (Scope 1, Scope 2 and Scope 3) and their sources.
  • The scope of the reporting - covering all operation or just a selection.
  • Performance versus prior years and performance versus targets with explanations.
  • The way carbon reductions have been achieved.
  • How employees have been engaged in the carbon emission reduction efforts.
  • How external stakeholders (customers/suppliers) have been engaged in carbon emission reduction efforts.
  • Future plans/targets to reduce the emissions burden and the way these will be achieved.

What did I find ?

Overall absolute emissions - the scope (Scope 1, Scope 2 and Scope 3) and their sources.
Amcor provides details of carbon intensity (per unit of production) by Scope over 6 years for Amcor "legacy" sites, representing Amcor prior to its Alcan Packaging acquisition.

Amcor also discloses the level of total absolute carbon emissions.

Banco Bradesco does not include details of carbon emissions in their 61 page report, but refers to the website, which is all in a foreign language - Portuguese ?  with no English option. The emissions numbers - in toneladas - are stated as part of the GRI Index. 

Banco Santander shows Scope 1, 2 and 3 emissions for the reporting year:

The Bank also confirms that emissions per employee dropped 76% between 2005 and 2010.

Bank of America details Scope 1, 2 and 3 emissions for 2010 and prior year 2009, by source, including details of Renewable Energy Credits.

British Sky Broadcasting provides details data for Scope 1, 2 and 3 emissions since 2008 baseline tracking. Data is shown for absolute emissions and per GBP million turnover. Even the Sky News Helicopter is detailed as generating 183 tons of (Scope 3) carbon emissions in 2010/2011.

Coca Cola Enterprises reports in detail against all three Scope emissions, explaining methodology, sources, and even an estimation of the likely effect of new additional territories:

Royal Dutch Shell provides 10 years of carbon emission data in a concentrated data table separate from the report narrative. The narrative states that higher emissions were due to higher production, especially in Nigeria because of an improved security situation. Shell makes a distinction in the report narrative between Scope 1 and 2 emissions (also splits emissions between production operations and flaring). It is not clear whether Scope 3 emissions are included.

Tieto explains the sources of carbon emissions, mainly generated through data center consumption plus employee work and travel.

Tieto provides details for all Scope 1, 2 and 3 for the year 2010.

Between 2009 and 2010, Tieto has increased the scope of its reporting from 7 offices in Sweden and Finland to 58 offices - a significant achievement- but rendering an absolute comparison with prior year data not relevant.  As you might imagine, total CO2 emissions increased significantly with increased business activity. However, while Scope 1 and 2 emissions per person decreased in 2010 vs 2009, Scope 3 emissions per person increased from 0.7 tons to 0.82 tons in 2010, this, despite a stated decrease in travel expenses per person by 3% (Scope 3 emissions, as can be seen, is primarily business travel). This is not explained.

Vodafone reports absolute emissions in the printed report, supplemented by significant detail on the Vodafone Sustainability Report website.
Wyndham Worldwide Corporation reports total Scope 1 and Scope 2 carbon emissions and sources.

The scope of the reporting - covering all operations or just a selection.
Amcor's reporting covers all manufacturing sites.
Banco Bradesco's report covers all the Bank's operations.
Banco Santander's report covers all the Bank's operations.
Bank of America's report covers the entire activities of the Bank.
British Sky Broadcasting covers all sites except joint ventures and is annualized data based on 11 months operations.
Coca Cola Enterprises reports on all the business with some omissions for newly acquired territories in 2010/2011. 
Royal Dutch Shell reports on all operations.
Tieto's carbon reporting covers between 73% and 90% of employees (18,000 employees).
Vodafone's report includes all operations with the exception of joint ventures.
Wyndham Worldwide Corporation reports on all facilities over which the company has direct control.

Performance versus prior years and performance versus targets with explanations.

Amcor reports a 2.4% carbon emission reduction in intensity (per unit of production) over 5 years for Scope 1 and 2 but did not meet the 10% 5-year target. No explanation for falling short of targets is provided. 

Banco Bradesco does not refer to prior year performance or express any carbon targets.

Banco Santander does not disclose targets and does not explain performance versus prior years beyond a passing reference.

Bank of America shows a big increase in Scope 3 emissions. However, 2010 data now includes all forms of business travel, not just air travel which was the only element reported in the 2009 report - a good example of how reporting scope improves from year to year. BoA also reports emissions from waste disposal and negative emissions from recycling and composting (232,171 tons).

British Sky Broadcasting clearly shows performance against targets over two reporting periods.

Coca Cola Enterprises provides data for prior years, showing improvements in absolute performance while increasing sales. 

Royal Dutch Shell makes general comments about performance relating to manufacturing efficiency.

Tieto Corporation of Sweden makes no secret of their carbon vision - though it is not clear by when this is scheduled to be achieved. 

Vodafone provides good, clear detail relating to performance versus objectives:

Wyndham Worldwide Corporation does not provide details of past performance (this is a first Sustainability Report).

The way carbon reductions have been achieved.

Amcor refers to "a range of procedural and technical improvements" including lighting replacement, improving boiler efficiencies, insulating steam pipes and replacing inefficient heating with infrared space heating.

Banco Bradesco offers no information. In fact, it is not clear whether there have been any carbon reductions.

Banco Santander advances construction or maintenance of branches to reduce the use of natural resources and raw materials that contribute to the Bank´s direct and indirect GHG emissions. It also compensates its emissions through the Projeto Floresta Real. 2010 emissions will be offset by March 2011 by planting 60,000 native forest trees in degraded areas with low Human Development Index (HDI) levels.

Bank of America achieved a 7.5% reduction in Scope 1 and 2 emissions in 2010 by improving energy efficiency in its retail banking centers, office buildings, and data centers and optimizing real estate portfolio to make the most efficient use of space. The Bank also discloses that there was a reduction in the GHG intensity of the U.S. electricity grid, which also contributed to their improved performance.

British Sky Broadcasting refers to building efficiency improvements including lighting, increased air sensors and air conditioning chiller units. Energy at UK Sites is purchased at renewable tariffs. The British Sky report also includes a page entitled "30 things we have done to reduce our environmental impact", many of which relate to energy consumption and carbon emissions.

Coca Cola Enterprises provides data for prior years and detailed explanations of what carbon emissions are generated where and what actions have been taken through energy-efficient technologies in manufacturing (compressed air, lighting and heating), renewable energy use, transportation efficiencies and cooling equipment for soft drinks (which are 62% of Coca Cola's core business emissions) and vending machines. Also, plant production lines are equipped with energy meters which show energy consumption performance in real-time and can be used to make adjustments which affect resulting carbon emissions.

Royal Dutch Shell does not give details about specific actions taken to reduce carbon emissions.

Tieto's main advance has been the opening of  "one of the most environmentally efficient" data centers in Sweden, called "Tieto Cave", with 20 meter rock solid walls. Wow. Sounds like a good setting for Mission Impossible 6. I can just see Tom Cruise tunneling through that. When fully utilized, the data center will supply 1,000 homes with heat and warm water.  

Vodafone discloses great detail about the way carbon efficiencies have been achieved including using fresh air to cool equipment instead of air conditioning, increasing temperature at which base stations can operate, thereby reducing cooling requirements, remote shutdown of base stations, installing more energy efficient base stations, reducing number of computer servers, using alternative energy (solar and wind) for part of the operations and reducing operating time of generators through technology improvements.

Wyndham Worldwide Corporation provides a long list of carbon-reducing activities relating to lighting, heating, Energy Star appliances and the company purchases 100% of its energy usage from wind power at the corporate HQ.

How employees have been engaged in the carbon emission reduction efforts.

Amcor does not refer to employee engagement in carbon emission reductions. Amcor refers only to an EMS, using ISO18000.
Banco Bradesco offers no information.

Banco Santander lays on 85 free daily chartered buses between subway stations and the organization's administrative buildings. The service is used by 1,662 employees. Santander also provides bicycle parks and changing rooms with showers, towels and shampoo.

Bank of America engages "thousands" of employees in environmental issues through workshops and other activities. Employees saved 2,268 tons of carbon savings and 350 employees became Environment Ambassadors.  Bank of America also offers a subsidy to employees to purchase hybrid electric (and now also, compressed natural gas) vehicles - over 3,700 employees have bought hybrids since 2007. This is important as Scope 3 emissions, which are mainly employee commuting and business travel, increased in 2010. Business travel emissions increased by over 150%.

British Sky Broadcasting ran a second Flight Challenge for employees focusing on minimising flights between Scotland and London by raising awareness of alternatives.

Coca Cola Enterprises does not specifically refer to employee engagement in environmental performance though there is one short employee story.

Royal Dutch Shell does not mention employees.

Tieto does not specifically refer to employee engagement in Green activities, though much of the company's carbon performance will be affected by reducing business travel which clearly requires employees to collaborate.

Vodafone does not specifically refer to employees in relation to carbon emission activities.

Wyndham Worldwide Corporation runs a Wyndham Green Council with representatives from across the Company, including over 200 associates from cross-functional departments in each business unit in over 20 countries. Innovations, experiences, and best practices are regularly shared across the Company and published annually in a Global Best Practices document.

In addition, Wyndham offers Sustainability 101 training in 10 languages, and has already trained 35% of the company's employees. This is supplemented by educational efforts reaching 76% of the workforce on Earth Day and around other events. Wyndham also has a Green Kids program, designed to teach children about sustainability and the best of all, a Caught Green Handed program, to recognize positive environmental performance of employees.

How external stakeholders (customers/suppliers) have been engaged in carbon emission reduction efforts.

Amcor does not disclose information on how Amcor engages with customers or suppliers with regard to carbon reduction efforts, except in the area of future targets. 

Banco Bradesco is a signatory to the Equator Principles and reports on how they apply environmental thinking to credit decisions. The bank offers four environmentally positive investment funds. However, aspects related to carbon disclosure are not specifically discussed.

Banco Santander participates in the Sectoral Forum for the Management of GHG Emissions – Engagement of Suppliers. The objective is to persuade suppliers to adopt a systematic inventory process, establishing activities for mitigating and offsetting emissions.

Through its core business, the Bank of America is committed to advancing a low-carbon economy and has generated low-carbon business worth $11.6 billion between 2007 and 2010 including more than $1.9 billion in “green” commercial real estate debt and equity transactions, $1 billion in debt and equity for green affordable housing in 23 states, $476 million in financing for energy efficiency upgrades and retrofitting for K–12 schools, colleges and universities and acted as underwriter on four IPOs, raising $3.7 billion in capital for renewable energy, clean technology and energy efficiency companies. Bank of America also held a supplier conference, encouraging disclosure to the Carbon Disclosure Project - 75 of the Bank's largest suppliers responded to the CDP.

British Sky Broadcasting asked 50 most carbon intensive suppliers to measure their carbon footprint and further reduce emissions using the Carbon Disclosure Project reporting framework. 25 agreed to participate so far. Through the Sky Rainforest Rescue campaign, in partnership with WWF, British Sky involves customers in a campaign to help save one billion trees in the Amazon rainforest.
Coca Cola Enterprises does not specifically refer to customers though the section on sustainable packaging and carbon footprint throughout the lifecycle of Coca Cola products involves consumers and requires their participation in responsible environmental behavior such as recycling.

Royal Dutch Shell describes in detail what the company is doing to develop produce cleaner energy and advanced biofuels and lubricants developed to help customers use less energy.

Tieto confirms that their core business offering, data centers and IT solutions, can help customers reduce their carbon footprints.

Vodafone reports on offerings of low-carbon solutions including smart metering for customers. "Combined with innovative technology from our partners – such as Isotrak’s Active Transport Management System or AMS’ smart metering solutions – more than 5 million Vodafone M2M connections are providing access to data that help businesses improve efficiency and cut costs. We believe that at least 4 million of these connections also help to reduce energy use and related carbon emissions."

Wyndham Worldwide Corporation operates a vacation ownership program with certification programs reaching over 800,000 timeshare owners, focusing on reduction of energy, water and waste. At Wyndham Hotel Group, the Green Franchisee Hotel Advisory Board was formed in 2010 in which 12 cross-brand hotel owners and general managers showcased and shared green practices to advance sustainability in the hotel group portfolio. Also, Wyndham has a Green Supplier initiative to partner with suppliers and vendors who have a similar commitment to protecting the environment.

Future plans/targets to reduce the emissions burden and the way these will be achieved.

Amcor announces a new target of an additional 10% reduction in carbon intensity by FY 2015/2016. This will be achieved through engaging suppliers, working with customers to make packaging more environmentally friendly and continuing internal efficiency drives.

Banco Bradesco established an Eco-efficiency Working Group which developed a Master Plan that aims to establish an environmental management structure in line with the Bank’s activities, including actions to be developed over the next five years. What this space, as they say.

Banco Santander is not explicit about future plans to achieve carbon reductions.

Bank of America has declared a goal to reduce carbon emissions by 15% in the next 5 years. They will do this by increasing LEED certified space to 20% by end 2015 and will offer monetary rewards and career advancement for employees who contribute to achieving environmental goals.

British Sky Broadcasting includes a narrative relating to next steps, in which the company will continue to do what it has already been doing in terms of carbon management.

Coca Cola Enterprises: "We are reviewing our carbon reduction goal in 2011, looking at our carbon impacts beyond our immediate operations and the demands of our stakeholders and policy makers." Watch this space, too.

Royal Dutch Shell does not specify future targets.

Tieto explains how the company will work towards carbon neutrality: reduced business travel, lower data-center energy consumption, lower office energy consumption etc.

Vodafone offers a detailed program for future carbon emissions reduction, the only reporter in this category to do so at this level of detail:
Wyndham Worldwide Corporation also give some specific through not quantifiable targets, indicating positive intention.

So, any conclusions about which report YOU will VOTE for in this category? (if you got this far, CONGRATULATIONS!!!)  

My votes go to Vodafone, Coca Cola Enterprises, Wyndham and British Sky. I especially like Wyndham's employee practices.

So remember, carbon is carbon is carbon but reporting is not reporting is not reporting is not reporting. Help the best reporters gain recognition and raise the bar through your VOTES >>>;.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via  on Twitter or via my business website  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

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