Looking At Opportunities for Carbon Reporting?
Here Are Three Important Thoughts From THG’s 2022 Experience
The gradual adoption of GHG reporting protocols for large and mid-sized organizations hit a tipping point in 2022. Driven by the inevitability of reporting mandates, supply chain integration, along with banking and investor pressure, most organizations have at least started to evaluate a process for carbon reporting. Understanding the various scope definitions and how they relate to the organization is essential. While we expect continued controversy around reporting requirements for Scope 3 (indirect) emissions; protocols and reporting requirements for Scope 1 (on-site) and Scope 2 (electricity related) emissions are straightforward and well defined. GHG Reporting protocols require organizations to attest to the accuracy and completeness of emissions data.
Recent surveys indicate that more than 90% of organizations are unprepared and using inadequate manual processes for compliance. If your company is trying to assess the opportunities available in expanding traditional energy and utility supply and advisory roles into broader sustainability relationships, here are three thoughts based upon our engagements in 2022.
- The time to get started is now. The basic data for scope 1 and 2 emissions comes from electric, gas, water and waste utility bills along any onsite fuel consumption. Most companies are organizing emissions data for the first time. Anticipate at least a six-month process to implement a carbon accounting system. Most accounting systems only recover costs, and don’t accurately and reliably track consumption. Every organization disclosing carbon reduction goals needs a baseline year. If 2022 is the baseline year, digital access to data starts to disappear from utility websites after 12 months. Manually pulling invoice data is much more time consuming and expensive. Even if a company doesn’t have a carbon reduction goal, build the baseline data before it gets harder and much more expensive to find.
- Reporting and carbon mitigation is closely related to energy purchasing strategies. Scope 2 electricity emissions reporting has two components. The first is location-based emissions determined by the fuel mix of your local utility and tracked in the US by EPA’s eGrid database. The second is market-based determined by any actions of the customer to mitigate or offset GHGs with valid Renewable Energy Credits (RECs), green tariffs, PPAs from wind or solar providers, or on-site distributed energy. To maintain long term client relationships, energy suppliers, brokers, consultants and even utilities all need to assist clients in measuring, managing, and mitigating GHGs through energy sourcing, reporting and compliance.
- GHG reporting and mitigation is a powerful and valuable tool for retaining important multi-facility clients while expanding products and revenues. Accurate, complete, and timely data along with auditable and verifiable processes are keys to success in meeting GHG reporting requirements. These reporting requirements demand detailed and complex systems and processes integrated with numerous outside sources and applications. Companies can’t do this alone. They need the help of expert systems and companies with proven engagement experience.
THG continues to focus on being the best industry partner for providing GHG data and technology services and solutions. We streamline the energy and utility data acquisition, analysis, validation, and presentment delivering auditable and verifiable reporting for scope 1 and scope 2 compliance. We are dedicated to quality data and intuitive technology, and we don’t compete with our partners in procurement, supply, or consulting.
Is it time for your company to add carbon management to your suite of services or your reporting scope?
Give us a call, lets talk.