Why Climate is Scary for Businesses – And What to Do About it
Three ways to measure and report your emissions
October 10, 2023
If you’re here, you probably had a little surprise dropped in your lap – your boss, a client, or both – now need your company to report its impact on the climate and they’re expecting you to provide a report on it soon. Perhaps you’re a B Corp, and you just learned about the need to report your emissions every year and to reduce them by 50% by 2030, but you’re not even sure what your company’s emissions are now.
That’s stressful. You care about the climate and you want to do a good job, but this feels easy to screw up. The language is confusing and technical, the data entry requirements seem excessive, and you’re not really sure that you’re going to be able to figure it out in time to meet the requirements.
Well, you are not alone and thankfully, there are a few choices for you to consider that can make it a little easier to discover and report your climate accounting. Here is a list of three different categories, each with a few options that other people like you have used and their strengths and weaknesses:
1. Hire a consultant
Probably the first thing you thought about – who can do this and what would it cost? This is what most companies have done historically. The price can vary significantly, but you will have someone to speak with and walk you through the process. There are too many options to list, but they do fall into two broad categories:
a. Boutique consultants: These are the people who have specialized in climate and care about it deeply enough to start a company about it. Your friend in the biz!
Strengths: - Often local - Likely specialize in the characteristics of your business, industry, or region - Available for questions - Typically give direction on how to start reducing emissions - Great example: Warm Springs Consulting
Weaknesses: - Usually requires significant staff support to get appropriate data - Typically takes a few weeks to sign a contract, then a few more weeks to do calculations - Numbers are a snapshot – the calculations are only good on the day they are given to you in a report. - Cost: Thousands to tens of thousands of dollars, depending upon the consultant and your company’s size/complexity
b. National consulting agencies: Brand name organizations like Bain & Company or PwC.
Strengths: - If you’re looking for a brand to back what you claim, it’s nice to have a brand that people recognize. - Very formal process that will tell you exactly what you need to provide - Glossy report
Weaknesses: - Expensive – will likely cost six figures - Not really an option if you’re smaller than a few hundred employees - The work will be done by well-paid junior personnel but presented by a partner.
2. Do it yourself
You’ve done scary things before, you’re smart, and you can figure this out! You will need to start by learning about scope emissions, start reading about the Greenhouse Gas Protocol, and make sure you’re familiar with what exactly you need to report. There are some free tools that help with this, too!
a. The US EPA’s Simplified GHG Emissions Calculator. A downloadable spreadsheet with a lot of the built-in conversion factors built in, this is actually a really great option, courtesy of Uncle Sam!
Strengths: - Free - Comprehensive
Weaknesses: - Requires a lot of data collection to get good details - Format can feel a little intimidating
Strengths: - Free - Pretty intuitive web-based interface - Good numbers for California-based businesses - Okay precision if you add your own spending numbers
Weaknesses: - Some coverage outside of California, but a little spotty - Probably won’t meet the needs for a detailed accounting because it primarily uses spend-based accounting, which means its accounting is done by guessing your company’s spending and then using that to guess what the emissions associated with that spend would be
c. SME Climate Hub. An initiative of big companies and reporting standards to list smaller companies that care about climate. Has an okay carbon calculator.
Strengths: - Free (account required) carbon calculator provided by Normative, a European carbon accounting company - Comes with a little marketing value as it gets you listed on their website
Weaknesses: - Pretty focused on Europe – many units of input are in metric only - Accounting is also spend-based and does not give you visibility on where to make real reductions - Talks about emissions reductions but does not give much guidance on how to do so
3. Digital climate accounting tools
If you have been reading through this list wondering if solutions have evolved beyond what would have been done last century, you’re right and there is an absolute plethora of digital choices for you to choose from. Consider what is important to you – are you looking for specific features, industry relevance, price, ease of use?
a. Enterprise climate accounting tools. Most accounting software in the space focuses on providing full feature sets to experienced sustainability professionals. Includes very well-funded, venture capital-backed companies like Persefoni, Watershed, and Sinai.
Strengths: - Ongoing climate accounting with precision - Reporting tools for you to send to your supply chain and get more precision than a typical LCA - Wraparound services that might include employee training, standardized reporting for TCFD, SBTi, CDP
Weaknesses: - Expensive – usually won’t have a pricing page because if you have to ask, you probably can’t afford it - Typically a data centralization tool that requires you or a member of your team to collect and input the data - Extensive onboarding commitment
b. Small & Medium-Sized Business climate accounting tools. An important emerging niche focused on climate accounting and action for the part of the world that isn’t an enterprise sustainability professional (not so niche, is it?). Aclymate is one potential solution; another would be Sustain Life.
Strengths: - Ongoing climate accounting with good precision - Automated data collection from many of the data tools you already use (financial accounting software, utility bills) - Affordable – prices range from $25 to a few thousand dollars per month, depending upon the service needed, the size of your organization, and the solution chosen. The pricing is often more transparent. - Fast – can be completed in a few hours to a few days, again depending upon the complexity of your organization
Weaknesses: - Less full-featured than enterprise solutions. Some limitations on setting specific emission factors, creating reporting sub-units, etc. - Less brand recognition of enterprise accounting solutions
Whatever you choose, the MOST IMPORTANT THING is to get started. This problem will not get better with age. Most net-zero reporting standards require companies to cut their emissions by 50% by 2030, so the longer you wait, the more drastic the emissions reductions will need to be every year. Moreover, regulations are building that are expanding the requirement to report and reduce emissions every year, so this isn’t a question of if, but one of when your company will have to act. There really is no time like the present.