The climate change debate today is largely irrelevant. Whether we like it or not, carbon taxation and mandatory emissions reporting is on the horizon. For many this represents the proverbial stick (without a carrot) approach, for others managing their carbon emissions represents significant opportunity, leading to cost reductions and improved market opportunities.
Irrespective of the camp you fit into, carbon emissions measurement and ongoing management is a business imperative and the facilitator, as with most business requirements, lies with the IT department.
When it comes to emissions reporting, “The devil is in the detail”, says Teresa Legg from carbon consultancy, The Carbon Report. “Measuring and reporting emissions involves taking non-financial data and applying an emissions factor to calculate a carbon equivalent. Identifying these emissions sources, determining the boundaries of the audit and sourcing verifiable data are the key challenges.” Legg goes on to say.
The data required for emissions reporting is typically not captured in traditional ERP systems. Information that is important for financial or operations reporting is not necessarily the same for emissions reporting. IT departments need to rethink their systems approach and ensure that they are providing the tools and information to the business to make informed decisions around emissions, carbon taxation and associated business risks.
“A good way to start this journey is to perform a base year assessment on your carbon emissions”, Legg goes on to say. “This ensures you will have a validated inventory which will act as a blueprint for any systems design or tooling that you may want to implement within your organisation going forward”, she elaborates. “Your base year, if defined correctly, will provide you with the platform against which to measure ongoing business performance and future reductions” Legg concludes.
Carbon taxation is largely acting as the stick at the moment and there is a groundswell of organisations trying to get a handle on their emissions and potential exposure through taxation. The Carbon Report offers a free carbon tax assessment which provides companies with an indicative representation of whether they will be liable for taxation (under the current proposed policy) and what this potential exposure will be.
Clearly, IT departments need to be taking a systems approach to carbon emissions management as the low carbon economy is a runaway steam train that is just not going to stop.