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It’s time for a carbon audit

The first step to achieving carbon neutrality is undertaking a carbon audit

An organisation keen to prove its environmental credentials might want to start with undertaking a carbon audit. As initiatives go, it sends a real message of intent.

Richard Heede, co-founder and co-director of the Climate Accountability Institute, describes a carbon audit as ‘an essential tool for managing emissions’, adding: ‘Also known as a greenhouse gas inventory, it quantifies a company’s emissions of carbon dioxide, methane, and other greenhouse gases on an annual basis using a recognised protocol, such as the World Resources Institute Greenhouse Gas Protocol, or ISO 14064.

‘Audits, are based on a company’s direct and indirect energy usage, as well as process emissions, if applicable, and thus require reliable accounts of the company’s energy use at every facility or segment of the supply chain, in physical units, such as litres of petrol, tonnes of fuel oil, cubic meters of natural gas or a megawatt hour of electricity. The carbon content of purchased electricity varies by region and by utility.’

An audit can boost a supportive environmental narrative because ‘it is a signal to investors, customers, and the public that the climate crisis is a significant global and corporate challenge, and that the company’s social license to operate crucially depends on how it identifies, measures, and reduces emissions of greenhouse gases’, he says. After all, a company cannot manage what it does not measure. But an audit needs to be underpinned by a commitment to manage emissions over time, preferably in alignment with the Paris Agreement to achieve net zero by mid-century. ‘An audit devoid of a commitment to reduce a company’s emissions is a liability,’ warns Heede. ‘Reliable and transparent reporting on a company’s climate impact is every bit as important as financial reporting. Lack of ambition is increasingly seen as a liability to its reputation as well as its future earnings.’

He believes that a carbon audit may also have unexpected benefits. ‘Successfully dealing with a company’s climate impacts will likely uncover innovative ways to reduce emissions and re-imagining how it does business. Such leadership is contagious and profitable,’ he adds. ‘What, how, and where [a company] makes its products must be evaluated in the context of a low-carbon economy. New products, processing, packaging, or distribution techniques may be warranted and profitable in a rapidly changing global economy.’

One company at the forefront of embracing the carbon audit model is The Guardian. The newspaper and media group has pledged to reach net zero emissions by 2030 and achieved the ‘B Corporation’ accreditation in recognition of its commitment to ‘balance profit and purpose’.

An audit devoid of a commitment to reduce a company’s emissions is a liability

Julie Richards, delivery portfolio director at The Guardian, highlights the strong measurement argument for why carbon audits are important to the company. ‘To be able to produce a plan you need to know your starting point – so an audit is a vital first step to map and understand how your business generates carbon,’ she says. ‘Without this information you cannot create a realistic strategy for reducing your footprint.’

So from a practical company perspective what does a carbon audit involve? ‘We are working with sustainability experts to map out where and how we add to carbon emissions,’ she explains. The process focuses on two areas. ‘The first concentrates on areas of our business where we have a direct control over our environmental impacts – such as our own electricity use – and the second impacts in our supply chain, such as the products we purchase.’

The Guardian wants to achieve full internal and external accountability so it is mapping every area of its supply chain. ‘Our aim is to set a very ambitious target to reduce our emissions in the short- and long-term and use the information from our audit to build a clear plan for how we will achieve those reductions,’ notes Richards. The ultimate goal is carbon neutrality.

The power the carbon audits narrative potentially provides is underpinned by The Guardian’s commitment to becoming a more purposeful business, and living, as a business, by strong environmental values. ‘We are one of the world’s most trusted news organisations and our audiences rightly expect high standards in everything we do,’ says Richards. ‘We recognise the severity of the climate emergency, which is reflected in our editorial reporting and the change in the language we use when referring to climate issues. The environment is an issue that our readers care passionately about and we want to demonstrate that we are taking meaningful action on it.’

Richards notes The Guardian’s recognition as a B Corporation is an important part of all this. ‘We had to answer over 200 questions and provide supporting evidence of standards of social and environmental performance, accountability and transparency, and will need to recertify every three years. It demonstrates publicly that we are living the values that we promote in our journalism.’

Ultimately, this process is all part of a wider approach, which gives added strength to the corporate message. ‘Everything we do connects with The Guardian’s purpose. Our aim is to explore new ways of doing things, bring new ideas to the table and give people the facts to make a positive impact in the world,’ says Richards.  This therefore fits with the overall communications message in a multilayered way. ‘A lot of companies are talking about the idea of purpose at the moment, so it’s important to us that we can demonstrate to our readers that we are doing more than just talking – we are actually acting on things like our environmental performance, how we treat our staff and our levels of transparency and the way we govern ourselves.’

She adds: ‘The climate crisis is the most urgent issue of our times. There is momentum with companies acknowledging the risks the climate emergency poses to the global economy. In part, companies are reacting to a growing demand and awareness from consumers, who are voting with their purchases and demanding action from the companies they are loyal to.’ This has prompted the newspaper group to also consider how its social impact. There are targets to eliminate the gender pay gap at leadership level. It has published an ethnicity pay gap. And it is also working towards becoming a more diverse and representative employer.

A lot of companies are talking about the idea of purpose, so it’s important that we can demonstrate we are doing more than just talking

When it comes to using such approaches as part of the corporate messaging, Richards has some advice. ‘Any initiatives need to be at the core of the business and this cuts right across all business practices – whether it’s financial, environmental, societal or governmental. Organisations will be held to much higher account, and those who are transparent and authentic will find the message resonates and rewards.’

Heede agrees. ‘Aim high, meet ambitious goals, and tell a good story. Of course, a lot of companies weave an incomplete story, hide behind marginal efforts and spin twisted tails of success in order to persuade investors and the public that it is meeting its climate obligations,’ he says. ‘Companies that are seen as laggards are increasingly likely to fail in a world where honest climate success has currency.’

He believes that companies embracing the challenge of carbon audits will benefit in the long run. ‘Consumers and businesses are increasingly demanding products and services that are demonstrably responsive to the climate crisis. Innovative companies see the climate crisis as an opportunity.’

And this is potentially the biggest message of all.