Embracing Technology in the FM Sector

Technology is all around us and continues to encroach into our lives. Whether through the applications on various office appliances, voice-controlled tech at home, or the sensors used to measure and improve the space we live in. We have an enthused world where anything is possible with the use of technology. The role of technology and its disruptive influence is one of the three key themes that was identified in the RICS Responsible Business Forum. This article explores some of the challenges ahead with the impact of technology on the built environment. Is your business fully embracing technology?

Setting the Expectations

Data-enabled systems have become the standard operating approach for many.  The potential opportunities to save costs and improve the workplace are widespread. But, cutting through the sales talk and communicating the benefits to your clients or your business is tougher.

The challenge with communicating the benefits is the balance between perception and what can be delivered today – which is very much about setting expectations. There is often a need to oversell the opportunities that can be achieved or underplay the integration costs. In part, this is led by misunderstandings by leaders on the role that technology can take, and a lack of experience on the ability to deliver and achieve results from data.

Simplifying what the technology is, how it is being used and the resulting data that can be utilised is fundamental for communicating the expectations. There are also lessons that older business leaders can learn from the younger generation in technology.

Getting Technology to do what we want it to do

So, what do we want the technology to do and how will it help us? We are all still the same people, but adding layers onto needs. Technology can help this and the interface is still important. In the built environment, we use technology to:

  • optimise or reduce plant run times through AI,
  • ensure space is optimised for user comfort,
  • help teams to optimise condition-based maintenance programmes; and
  • extend asset lifetimes.

Together this has significant benefits to the energy performance of the building, employee wellbeing and cost savings.

However, over-reliance on technology can mean we lose the ability to communicate with each other. People skills are vital in the FM sector, but with technology becoming the interface instead of the person, it promotes small changes in behaviour. For example, leaving a message instruction to another to close off an issue rather than seeing a problem through to the end. This encourages a loss of accountability for activities along with the loss of team working.

Rise of the Data Analyst in the Responsible Business

Technology can enable FM to be more customer-focused, but its advance requires new skills. For example, the ability to analyse the data that is being generated. Whilst AI tools are available, the dynamic approach of most organisations will require individuals who understand the data to translate it to a people/ business perspective.

Not only are employee skills sets changing, but the requirements on business is changing too. The level of data captured increasingly infringes on personal information. Therefore, disclosure and openness about what data is held is critical. Gaining confidence from workers on this subject will require communicating the reasons why data is held, and the benefits of holding the data. There will be kickback to this, and the use of opt-outs will help to provide a mechanism to act on this.

We are moving into a sphere where organisations are challenged about what they stand for. It is no longer about money, but increasingly about purpose, transparency and values. Those entering the workforce want to work for organisations that share their beliefs, which are becoming more altruistic. Commercials are good and an absolute necessity, but so too are the ethics – how do we get this mindset through to the FM sector?

Integrating Technology into FM

This provides a very different role for FM moving forwards. A role where technology is integrated into the service, and key skills revolve around customer service and data analytics. But being mindful of the disruptive influences that could be lurking on the horizon. Improvements in technology could easily lead to the ‘uberisation‘ of standard services – particularly maintenance and hospitality functions. Has the industry considered this though?

With new technology part and parcel of modern life, it is illogical for the FM sector not to embrace it. However, the integration of technology through the lens of a responsible business is necessary. Weighing the balance of environmental improvements with social and Governance costs is fundamental. Look out for the release of the RICS Responsible Business Leaders Forum Report at the end of the Summer 2019. We delve into these challenges further as we seek solutions for the sector.

For more information on the RICS Responsible Business Forum please visit the RICS website
Sunil Shah, Chair RICS Responsible Business Forum and Managing Director, Acclaro Advisory.

Through the ‘Making Policy Clear’ Series, Acclaro Advisory will inform clients of policy and regulatory changes around energy, environmental and social issues. We bring clarity to governance, compliance and targets so you can get on with regular business activities. We dismantle the complexities of new and amended legislation and standards in a way that will help you meet your requirements today and be ready for new ones tomorrow.

Part 4 of this series focuses on Article 8 of the EU Energy Efficiency Directive (EED) (2012/27/EU).

The EED contains a number of requirements and measures intended to increase the energy efficiency across the European Union. The Directive establishes a set of binding measures to help the EU reach its 20% energy efficiency target by 2020 and to support further energy efficiency improvements beyond 2020. All EU member states are required to transpose and implement Articles of EED into regulation suited to each country.

The origin of ESOS

The UK ESOS scheme was put in place as a response to the EED Article 8 – Energy Auditing. Article 8 requires the Member States to introduce a mandatory programme for large enterprises (non-SME) to conduct regular energy assessments and efficiency audits. This has been transposed in various forms across the EU member states with key elements remaining roughly similar for each country.

The EED (2012/27/EU) Article 8 requires the Member States to introduce a mandatory programme for large enterprises (non-SME* ) to conduct regular energy assessments and efficiency audits. This has been transposed in various forms across the EU member states with key elements remaining roughly similar for each country.

* Small-Medium Enterprise

How are the 28 EU countries implementing EED Article 8?

Navigating the compliance regime across Europe can be a difficult process, especially for multinational organisations.

The EED Article 8 compliance qualification criteria are generally built around the European Commission definition a non-SME:

  • more than 250 people; AND
  • those with an annual turnover exceeding €50 million; OR
  • total assets exceeding €43 million.

However, this can vary based on regional level definitions of a large enterprise and other related laws. In addition, some Member States have included additional qualification and compliance criteria.

Some Member States follow the EU rule on the consolidation of at least 2 of the qualification criteria (financial and employee count) while others, such as the UK Energy Savings Opportunity Scheme Regulations 2014 (ESOS), requires only one of these criteria to be met.

Other examples of transposed variations include:

  • The UK ESOS utilises a “one in, all in” methodology for the scheme qualification. Once one UK undertaking qualifies, all of the undertaking UK operations automatically qualify. 90% of the energy consumed must be audited for compliance and sampling* is accepted. However, this is not the case across EU Member States.
  • In France, a company qualifying is identified by its SIREN number in addition to meeting one of the large entity criteria as with UK ESOS. At least 80% of the annual energy consumption must be audited and sampling* is accepted.
  • In Bulgaria, compliance governed by the country definition of a non-SME with industrial sites having an annual compliance threshold to comply. Most of the transpose Article 8 is tied to other building legislation which means the owners can be responsible for ensuring that identified measures are put in place.
  • In Sweden, companies qualify for mandatory energy assessment based on the EU Commission definition of a non-SME. Here linked and partner entities (local or overseas) should be considered. However, an energy threshold applies. Reporting is also allowed either in stages over the 4-year period or at one point in time during the 4 year period.

*Sampling rules apply

Acclaro Advisory provides comprehensive information in one location

Through us, you have access to knowledge and experience on the transposed regulation in the 28 EU countries. We can help you navigate the complex challenge of meeting all variations of requirements of the energy audit obligation.
Our team is up-to-date with the status of the directive across Europe and are equipped to support full compliance and carry out audits.

If you would like to understand these points further or would like advice or support with Article 8 of the EU Energy Efficiency Directive 2012/27/EU, please contact Erica Hall on +44 1183 273519

In the meantime, you can learn more about the Acclaro Energy Programme which helps you adapt and address responsibilities of energy efficiency as a business.

 

ESOS – Will you be compliant?

The 5th December 2019 ESOS date is fast approaching! Is your business ESOS Compliant?

It’s hard to believe that we are already halfway through 2019.
There have been a few changes this year with legislation and strengthened intentions around climate action at all levels of industry. For example, we’ve had councils make Climate Emergency declarations, the London Toxicity Charge (T-Charge) has been replaced by the upgraded Ultra Low Emission Zone (ULEZ) and organisations are looking towards Net Zero Carbon buildings and Carbon Neutrality by 2030.

At Acclaro we have been supporting our clients on their Environmental Sustainability and Energy Efficiency journeys. At present one of our main focus areas is ESOS. The UK’s opportunity for non-SMEs to recognise and act on energy efficiency improvements. Energy efficiency has been recognised as the premier cost-effective way to concurrently improve energy security, reduce energy costs, reduce carbon emissions, contribute to the overall energy and climate goals and enhance competitiveness.

5 months until the ESOS Phase 2 Deadline!

If you have not already made arrangements for compliance, it’s time to get in touch. Several organisations have started their compliance preparations and audits. But we already foresee a bottleneck as with 2015. So, don’t leave yours to last minute. Act now and make sure you are ESOS Compliant.

To get you started, here’s a list of what you need to do and how we can help.

1. Assess the total 12-month energy use across the organisation.

  • Remember to include at least your energy consumption for December 2018. This ensures you meet one criterion of compliance.
  •  Assess all buildings, UK transport related to your business (company cars / expensed car travel etc), industrial processes.

2. Identify areas and sites of significant energy use.

  • This should be your largest energy consuming assets from the above list.

3. Choose your route to compliance most suitable to business goals.

  •  What are your business goals/intentions?
  •  Are any changes on the horizon?
  •  Do you have specific targets or challenges?

4. Appoint your ESOS Lead Assessor, who is qualified to review your compliance route and reports.

5. Evidence opportunity for energy efficient measures in areas or sites of significant energy use and have the reports signed by the ESOS Lead Assessor and company Director.

6. Notify compliance to the administrator.

  • These are different for England, Wales and Northern Ireland.

Our experienced team has supported several organisations during phase 1 and have already started phase 2 compliance for our clients. We provide all the support you need from start to finish and beyond compliance.

Examples of our team’s experience with project complexity include:

  • Meeting compact schedules required during the intense phase 1 compliance deadline.
  • Effective audit sampling strategies to meet compliance and business requirements.
  • Successfully managing late compliance for organisations resulting in no financial penalties.
  • Successfully supporting on the Environmental Agency’s post-ESOS phase 1 audit checks.
  • Highlighting and implementing improved processes for phase 2 compliance.
  • Conducting Office, Theatre, Shopping Centre and Research Laboratory audits.

What about my multinational organisation?

Through us, you have access to knowledge and experience on the transposed regulation in the 28 EU countries. We can help you navigate the complex challenge of meeting all variations of requirements of the energy audit obligation.

Our team is up-to-date with the status of the directive across Europe and are equipped to support full compliance and carry out audits.

If you would like to understand these points further or would like advice or support with Article 8 of the EU Energy Efficiency Directive 2012/27/EU, get in touch with us +44 1183 273519 or email 

In the meantime, have a look at our Making Policy Clear – EED Article 8 article.

Acclaro Advisory provides Comprehensive information in One Location.

You can learn more about the Acclaro Energy Programme which helps you adapt and address responsibilities of energy efficiency as a business.

There is a new craze moving through sustainability teams. That craze is Social Value. It’s like the gold rush of the 19th Century. Ok, I admit, I greatly exaggerate. But observing the approach taken by procurers, corporate’s, service providers and NGOs is fascinating. Only instead of rushing for precious metals, there’s a rush for a perceived value that is generated from an elaborate spreadsheet.

A brief Catch-up

While Social Value came to notoriety in 2012 with the establishment of the Social Value Act, the regulation has made little impact. While generally well-intentioned, has lacked guidance, direction and proved somewhat confusing for all involved.

Occasional reappearances and drives progressing the Act have been made, but the tide truly turned for the masses in 2018. David Liddington provided a clear steer with his speech in June: “it is right that we use the government’s purchasing power to benefit society”. With this, the jockeying for position ramped up.

The Government has now released its consultation on its new approach to Social Value – it’s certainly an improvement. There is direction, and clarity. Read Acclaro’s account of the consultation. The short version is, more defined social value guidance for Central Government contracts, and a minimum weighting of 10% on contracts….

10%! – This now makes social value a competitive bid winner in a tender.

Current position – Measure my Social Value Now!

How do we measure Social Value seems to be the big question. Can we provide £800k in Social Value, or £1 million? Is this value larger than our competitors? Which tools should we use to calculate how much value we create? At Acclaro and the SFMI, we hear these questions frequently. We see a massive fixation on the numbers, and this is understandable, but not progressive.

But for a company to fixate on measuring their Social Value output without a fundamental approach to support the numbers means that risk awaits the unprepared. It is a dangerous tight rope to walk.
The Problem – Where Is The Substance To The Value?

With many trying to pull numbers from the sky using one of a multitude of tools, we are on the cusp of the new social version of greenwash. Social-wash (seems to fit). Tools are often based on what a company can provide in a theoretical sense.

X numbers of apprentices = £x’s of social Value.

But when a company bids, do they have the necessary narrative to back up their claims? In the short-term, it probably won’t matter. Companies will bid with their perceived Social Value number, and the highest will gain the points on the tender process.

But… what happens when a company is held account to that number? Can they be held to account through a contract if claimed that they can contribute £x million of social value? Probably, Yes. If not then it can be forgotten. Mobilisation of a contract will no doubt result in the 15 claimed apprentices turning to 5, or even zero. Also, will those apprentices be targeted groups of people that generate real value for the needs of the community? That will depend on the ethics and culture of the business making promises. I predict that the short term will become a period of Social Value without accountability. But things will change, and it will be the responsible business leaders that prosper.

Enter the True Leaders

There are real leaders in this space in the FM industry. The SFMI assesses FM companies annually. For example, in our annual assessment, we can state clearly that Vinci Facilities and Engie are ahead of the game on Social Value. There are others who are making progress as well because they see the long term value.

So now is the time for leaders to shine. Those companies who have a solid strategic base of social value embedded into their company culture will be able to provide their numbers alongside the important narrative that validates their claim. They can give past performance to instil confidence, and they can give systems and strategies on the way that Social Value is generated with their clients.

Acclaro’s Approach

It is for this reason, that Acclaro and the SFMI are measurement agnostic. We have developed the Acclaro Social Value Programme that is tailored to developing leadership in this space, and to give a meaningful substance to the numbers.

We are not about the numbers first. Numbers are the product at the end, but so many are seeing the numbers as the beginning and the endgame. We help a company to develop a structured approach to drive social value to truly benefit society based on the needs of the community. We follow a specified approach summarised below

The Acclaro Social Value wheel

The Acclaro Social Value wheel

Our approach is to base the numbers on a solid strategic foundation of generating Social Value at both the corporate and contractual level. If a bid contains a 15% weighting of social value, it is a natural progression to require validation of those numbers. Therefore in time, half of that 15% is the measured output number, and half will be the narrative, strategy and validation of those numbers.

This is where the Acclaro Social Value Programme is aimed at. In the Acclaro approach, we; assess, engage, define, execute and operate Social Value in a fit that is right for your company. You can be a company looking to create value for your clients, or you could be a client that is looking to generate social value from procurement. Our approach follows a similar approach with different detail. We build purpose driven leaders.

Acclaro helps you to plan for the long term and develop your approach to Social Value. We give you confidence in your numbers whether bidding for contracts, or procuring for services. Contact us to discuss further
Chris.havers@acclaro-advisory.com

Social Value – Where we were:

Almost 9 years since the Public Services (Social Value) Act was introduced it has become widely discussed, however, there are still issues in implementation. Despite a number of updates, the Act remained underutilised as procurement and procuring organisations were confused about its scope and application. Some viewed it as a replacement for CSR; some as additional.

The term “Social Value” steered many people away from its application in environmental improvements, though these too have social impacts. As industry and public bodies alike have been building knowledge bases on social value the understanding of its benefits has grown – along with knowledge of its complexity.

The Act so far has been adopted both in the public and private sectors. The UK Government has put out to consultation a new model for Social Value in Procurement. Although focused on government procurement, this model, as the initial Act, could be utilised across industries to inform social value approaches.

Acclaro’s opinion on the consultation:

The consultation out now proposes a “light touch” approach using a new model. It also provides high level and detailed guidance and links to relevant policy information that can support social value efforts. The model is split out into 5 high-level themes, 2 relating specifically to supply chains (Diverse Supply Chains; Safe Supply Chains), 2 involving staff (Skills and Employment; Inclusion, Mental Health and Well-being) and 1 on environmental sustainability. There are suggestions for each theme, in varying detail, of award criteria and measurement metrics to guide increased reporting. This would have a significant positive impact, encouraging accountability and long-term monitoring.

The additional detail will go a long way to expanding uptake of social value beyond large public sector projects as the concept becomes easier to understand, implement and report on. With the concept and practical application of social value still a maze to many the direction from government to other specific policy documents (including: Post-16 Skills Strategy; Integrated Communities Green Paper; Greening Government Commitments) and external guidance (e.g. Business in the Community’s Race at Work Charter) will prove a welcome new structure.

What’s still missing:

The mandatory 10% social value weighting in contract tenders is good – though not a new or ambitious strategy. Other larger weightings for social value have already been implemented within some tenders. Issues with current social value measurement systems – their inconsistency, lack of accountability, and corruptibility – mean this would need to include both numbers and discussion for credibility. However, this takes time that many public sector teams do not have. Thus over-reliance on untrustworthy figures alone is likely to continue.

Though environmental improvements are explicitly mentioned and categorised in the model they are limited compared with others. Some of the additional detail will be effective, however, the policy outcome of “environmental impacts are reduced” is unlikely to provide much guidance to those looking to implement. They will need to rely heavily on the 25 Year Environmental Plan – which does not use the terms “social value” or “social impact” once. The connection between environmental and social value remains undefined in this guidance.

Although under consultation and therefore liable to change, this document provides a major improvement in structure and guidance for everyone implementing social value. It will be important to keep monitoring and improving on the process as it is implemented and continue to update the system as the landscape changes.

We welcome discussion

We will be writing to necessary consortiums and bodies to provide our opinion and discuss further. If you are interested in discussing the consultation with us, please do get in contacts. Cara.kennelly@acclaro-advisory.com

It is a year since the collapse of Carillion and we have accepted that the facilities management side of their business was not the result of the failure. Important lessons have been learnt from the downfall and progress made by both the Government and the industry towards rectifying problems. This article looks at a number of these areas from the perspective of supplier activities and gives an insight into how the Sustainable Facilities Management Index (SFMI)  can help you to manage these activities.

SUPPLY CHAIN RISKS

One area of real change has been the management of suppliers. In the past, suppliers were used as an extension of the balance sheet to delay or avoid payments should cash flow get into difficulty. As a result, many suppliers have gone into administration, and many more livelihoods have been impacted. Suppliers have recognised the high risks of relying on a single client and vice versa.

The Government is asking suppliers to draw up ‘living wills’ to protect against supply chain risk. The Sustainable Facilities Management Index (SFMI) looks to incorporate these changes into the relevant sections of the assessment to understand how they are being delivered with an ongoing low margin model. The SFMI continues to drive best practice across all aspects of sustainability to the industry and sees these issues as a method to improve the reputation of outsourcing tarnished by bad practices.

SOCIAL IMPROVEMENTS

Greater responsibility is being mandated to clients through regulation such as Modern Slavery Act and the Social Value Act. This is driving a different conversation for both clients and suppliers.  In particular, the role of social value has significantly increased as we look for different metrics to the simple financial ones to base decisions on.

Clients need to understand which social and environmental improvements are necessary and which suppliers can be engaged to help deliver them. This will require a mapping exercise to understand the local community needs. These needs can be aligned with the values of the organisation to develop a longer-term programme.

RESPONSIBLE BUSINESS APPROACH

Developing a deeper relationship with suppliers is necessary to enable two-way dialogue, transfer of knowledge and the understanding of what true value and innovation can be achieved. The SFMI has supported several supplier workshop programmes to help critical suppliers understand the main environmental and social impacts and to foster a dialogue to deliver shared services.

These themes play a fundamental role in a responsible business approach. The SFMI is driving this approach in FM – there is a long way to go, but there are some real cases of best practice out there to learn from. You can read the latest reports and Research from the SFMI here.

If you are an FM service provider, being part of the SFMI in 2019 will give your company the pathway it needs to be managing and implementing key issues that a responsible business needs to address.

Clients that procure FM services can also benefit from the SFMI. Look out for our tools that you can use to quickly assess if your FM is providing real long-term value by managing environmental and social issues responsibly for you.

Leading companies are now targeting their supply chain carbon emissions. Change within operational control is considered basic, but ambition requires looking beyond these boundaries. Consumption-based accounting, an economic model to calculate supply chain carbon emissions, is one way to do this.

Every industry has some form of a supply chain, but these can vary in size and complexity. For example, the supply chain of the manufacturing industry is usually simple. Here ‘simple’ refers to how many ‘tiers’ and ‘pathways’ make up a supply chain. Whereas service industries are far more ‘complicated’ in terms of the number and variety of these ‘pathways’.

A ‘tier’ is a layer of a supplier. For example, Company A purchases catering through Company B, creating one supply chain ‘tier’. Company B buys ingredients for catering from Company C, creating another supply chain tier. However, Company B also buys drinks for from Company D. This does not add another tier, but another ‘pathway’ to the 2nd tier. The possible connections are endless and complex. This makes them very difficult to understand.

The different types of supply chain can host different opportunities if they are understood and managed well.

Supply chain tiers by Elementum

 

EXTRACTION

The environmental impact of extraction industries is clearer than any other industrial category. Despite fairly simple supply chain structures, there are limits to how well we can understand their GHG burdens. This is especially true when you consider the impacts of land use change, an area recently raised for development of a standard by GHG Protocol.

Consumption-based carbon accounting surpasses these limits. Understanding 100% of the carbon footprint gives companies a better chance to make real change.

MANUFACTURING

Construction, fashion and food products industries have had historic supply chain controversies (horsemeat in ready meals, labour violations in construction sites, and animal fur on ‘faux fur’ clothing). Their supply chains also share similar GHG emissions patterns. This provides an opportunity to improve the public view of these industries, and a transparent view of the supply chain will play a key role in this.

Supply chains in manufacturing are critically important. Consumption-based carbon accounting gives insight into the industries companies rely on and the associated carbon emissions. Diversity and improved sustainability in supply chains can protect companies from supply chain risks.

DISTRIBUTION

The complexities of Distribution industries are added to by the greatly increased demand for transport compared to other industries. Burning fossil fuels in lorries, ships and planes is one of the most significant GHG emissions sources at every scale. Distribution sectors will have significant transport burdens across supply chain tiers. New connections between tiers will have heavier burdens too.

With such important environmental impacts, consumption-based carbon accounting can bring a clearer focus to carbon emissions reduction efforts in Distribution industries.

SERVICES

Some of the most complex supply chains are within service industries. Examples of these industries include financial, legal and educational services. It is impossible under current methods, within a reasonable time and cost constraints, to measure the entire supply chain carbon emissions of such companies. However, the supply chain can hold 95% of the burden of service companies. The easiest way to map supply chains is through financial spend.

Using consumption-based carbon accounting, the GHG emissions of all supply chain paths can be included in one model. This also increases transparency in the supply chain, environmentally and financially.

WHAT THIS MEANS

Though discussed individually, the critical complexity is that all industries are linked through supply chains. For example, the Distribution industries that supply the Manufacturers, or the Service industries that support Extraction. Understanding these relationships and how they relate to supply chain carbon emissions helps target reduction actions.

More detailed understanding of these relationships through the consumption-based accounting model can accurately identify hot spots of spend and carbon to help you effectively target your emission-reducing initiatives

Your Sustainability Shopping List

We are almost at the end January and there is already a growing list of activities and aspirations for the proactive Sustainability Manager in 2019. It’s now time to focus on the priorities of a Sustainability Manager.

If you are looking for inspiration, and want to freshen up the tired strategy from previous years, read on. Before reading Acclaro’s top 5 sustainability priorities, we should remind you that underpinning all of these areas is the need for good quality data to be captured and interpreted. Without which little can be achieved.

1. Developing a Social Value Approach

Globalisation offers many positives, but the drive for cheaper goods and services has affected not only, supply chains but also the communities that companies work within.

Social Value is currently measured on the value and impact of the corporate, rather than the benefit derived by the community. Some are scrambling to measure a monetary value. Assessing the benefits that supply chains can bring, or engaging with communities we operate within, is surely the first logical step.

We suggest, take a step back. The first stage is to understand what already takes place across the business coupled with assessing the needs of the community in which you operate, (or serve if you are a public-sector body). Capturing this information will help to develop a cohesive programme of engagement. This can be structurally managed across internal, supply chain and community programmes. There are many benefits to gain from a social value programme. This includes an increasing number of tenders requiring some form of disclosure of the value you create, so now is the time assess what your organisation can bring to society.

2. More accurate GHG Supply Chain Emissions

The reporting of greenhouse gases provides an ever-greater understanding of how our organisations impact climate change. However, when it comes to affecting change, it can be difficult to understand which areas of a business to target that will yield the most effective results. Carbon emissions from the supply chain is being increasingly scrutinised. Therefore, understanding these burdens and your ability to target them effectively is critical.

Using economic models based on annually updated economic data can map supply chains and associated emissions. The data from industrial Supply and Use tables is combined with emissions factors to create a model that maps national emissions linked with the spend of an organisation. This maps the entire organisations economy using matrix algebra to link environmental and economic data. Save yourself time and move away from the bottom up approach that sees us plot only a small proportion of supply chain emissions very inaccurately. There are other ways of doing it, and you can have a greater impact on climate targets by using correct data to being with.

3. Energy Audits and Reporting

Carbon emissions and energy consumption remain some of the biggest risks and contributors to climate change. The move towards nearly zero carbon buildings is accelerating with standards being developed as part of the wedges associated with science based targets.

The first stage should always be to minimise emissions and the energy being consumed through an effective understanding of how and why energy is used the way it is. Regulations are asking for public disclosure allowing for greater scrutiny and the need for verified and accurate information to be disclosed.

Significant quantities of information exist, but translating this into usable data and tangible outcomes from dynamic systems is the challenge – but can yield significant savings in excess of 15% energy reduction.

4. Environmental Risk Management

Whilst often initiated and implemented as part of management systems, the recent driver for climate and biodiversity related risk evaluation has come from the investor community. The premise is simple and equates to understanding the environment’s impact on you. These disclosures are targeted at mainstream investors and are intended to help them assess whether climate risk is appropriately priced in to their valuation of your company, enabling investors to make more informed decisions

Techniques and approaches for the scenario testing are still in development, but this year will see an increase in the understanding of the risks and early stages of validating the implications. Early movers will benefit from the opportunities available.

5. Building a Responsible Business Culture

Finally, this is the piece that joins the dots together. Business culture is changing and the expectations of new employees and our major consumers are dictating different terms – we now have a language of Purpose.

Responding to the societal pressures, the increased level of data, reporting pressures and investor requirements will necessitate a different response from organisations. And that culture needs to extend beyond the four walls of the sustainability team, into business and towards supplier management and sales programmes.

This is a long journey, that connects together forward risks, social benefits and environmental impacts, a develops a long-term strategy. Ultimately it will mainstream your role, but a concept we need to grapple with is, will it make it redundant? In time, perhaps some day-to-day operational parts. But there will always a need for strategic thinking and forward planning.

Acclaro Advisory wishes you a belated Happy New Year, and we hope to see you at many an event to discuss the direction you are taking for a sustainable future.

Good luck with putting  your priorities as a Sustainability Manager into action.

What are you talking about?

So what is Consumption -Based GHG Reporting?  ‘Consumption-based’ carbon accounting, as the name suggests, calculates carbon footprints based on your consumption of goods and services. It is based on input-output analysis, a robust method of modelling economies. It maps nationally published data on the flow of money, into, around and out of a country via industry sectors. Originally used to study economics, it can be adapted to environmental needs by assigning ‘environmental burdens’ such as kilograms of carbon emissions to each industry. This gives you a value for kilograms of carbon emitted per pound sterling (or any other currency) spent in any industry or on any product. This can be combined to describe whole companies.

And we don’t do this already?

The method used by the majority of people to calculate carbon emissions at the moment is called ‘process-based’ carbon accounting. It is essentially a shopping list of items and activities which get assigned a carbon factor, combined to find the total carbon footprint. This could describe your energy or waste processes, for example.

There are a number of problems with this method. The data provided is often incomplete leaving gaps and underestimating the footprint, by as much as 87% in some studies. This means your reporting is inaccurate and you cannot reduce your carbon footprint because you can’t see that it’s there. It is also a very time-consuming method with lots of individual calculations that make mistakes easy to make.

How is this new approach any better?

Where ‘process-based’ methods take a long time, varied data, and huge amounts of it, ‘consumption-based’ is much simpler. Once the model is constructed your data is fed into the model and – after some fancy matrix algebra – get your entire carbon footprint. Because it uses both client data and national data sets it always calculates 100% of your carbon footprint

There is also more you can do with an input-output carbon footprint. As well as the usual detail, the final figure can be picked apart to show hot-spots for carbon in your supply chains down through 5 tiers of spending. For complex companies this allows unrivaled access to your carbon burdens and how to mitigate them. It also expands your influence and capacity for change beyond your company, and to top it off tells a great do-good story.

Get in touch

The Acclaro approach is to take its clients on a journey that provides long term solutions and stream lines burden. We have experience of developing long lasting relationships that continues to save clients time and money whilst delivering results. If you are interested in setting up the consumption based model, or hearing how we work, get in contact and we can discuss whether this approach is right for you.

This blog forms part of a series of articles on consumption-based GHG reporting. Stay in touch for further guidance and information.