Governments and investors are prodding the global economy towards carbon emissions reductions. What does this trend mean for companies that consume large volumes of energy?
As a minimum, they can anticipate carbon emissions reporting requirements.
Federal, state and provincial governments are not the only ones who want to know the carbon emissions of an individual business. Investors, suppliers and customers are also taking an interest.
Walmart is one example. By 2030, they intend to drive one billion metric tons (a gigaton) of greenhouse gases out of their global value chain. Emissions reporting from suppliers will play an essential role in reaching the “Project Gigaton” target.
There are numerous benefits for organizations that are proactive in reporting their emissions:
- A baseline creates knowledge. Establishing an emissions baseline gives insight into current operations.
- Reduction targets drive improvements. Measuring and reporting reductions motivates innovation and rallies support behind corporate sustainability efforts.
- Meet regulatory requirements. Reporting emissions to regulators is mandatory of some large emitters. For example, the Canadian government requires reports from facilities which annually emit over 10,000 T of Scope 1 emissions.
- Receive compliance assistance. The Canadian Output-Based Pricing System and Ontario’s Emissions Performance Standards are two programs to help companies comply with emission reduction requirements. Regular emissions reporting can determine if minimum qualification thresholds have been achieved.
- Collect incentives. As the cost of carbon goes up, so do the financial incentives for action. Reporting demonstrable results determines eligibility and makes the application process easier.
- Strengthen access to the supply chain and customers. Businesses that verify their emissions reductions are increasingly getting preferential treatment from customers and suppliers.
- Access financing and investment. Banks are providing sustainability-linked loans. BlackRock , the world’s largest asset manager, is telling companies that investment money is becoming linked to carbon emissions reductions.
A company that tracks its energy consumption can easily obtain carbon emissions reports. The benefits are significant and far outweigh any additional cost.