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Work ahead for businesses as the 2017 UK conversion factors are released

The arrival of the much-anticipated 2017 Defra UK conversion factors for greenhouse gas (GHG) reporting confirms a step change in the carbon intensity of the UK electricity grid and will pose a significant challenge for businesses when they disclose their emissions performance later in the year.

The headline drop of 14% on the electricity consumption conversion factor compared to 2016 will benefit businesses reporting performance on location-based emissions considerably. It will, however, also pose a challenge to articulate, with businesses across the board expected to report greatly reduced electricity emissions (the most major emissions source for many). Not getting internal and external commentary around annual performance right risks:

  • Internal momentum on energy efficiency being lost against a background of seemingly stellar performance, or alternatively;
  • External articulation of performance to stakeholders becoming shrouded by the reducing conversion factor; diluting the recognition of the tangible emissions reduction actions taking place.

Given the rapidly decarbonising grid (the UK electricity conversion factor has fallen 23% since 2015), 2017 could be a trigger year for more businesses moving to market-based reporting and target setting. This would ensure that carbon reduction successes are more directly correlated to proactive business decisions, rather than the influence of macro energy market investments and government policy.

So what else is new for 2017?  In the latest edition, keen reporters will also find that:

  • Plug-in hybrid and battery electric vehicles now have distance based factors available across scope 1, 2 and 3 (transmission and distribution)
  • Hotel stays have been added on a per room per night basis for 24 global markets
  • Domestic and short haul flight conversion factors have decreased by an average of 4% whilst long haul flights from the UK have increased in intensity by an average of 3%
  • Overseas electricity continues to be absent from the factor set, with users signed posted to the IEA to source factors. Scope 3 electricity transmission and distribution factors are still available.

All in all, there is considerable work ahead for reporters this year as they find the right narrative to explain their 2017 emissions performance, adapt to the alignment of CDP questionnaires with the TFCD (Task Force on Climate Related Financial Disclosure) recommendations and increase the breadth of their ESG (Environmental, Social and Governance) disclosures in response to the EU Non-Financial Reporting Directive.

 

If you have any questions related to UK or IEA conversion factors, CDP disclosure or wider ESG reporting, get in touch Julie.craig@carbonsmart.co.uk / 0207 048 0450.

Resource efficiency toolkit update

Good news for businesses in the North West – Carbon Smart has just completed work with Business Growth Hub (BGH) to update the award-winning Online Efficiency Toolkit they use with the latest greenhouse gas conversion factors. This ensures that SMEs working with BGH receive accurate and up-to-date figures on environmental savings from efficiency improvements.

As part of a host of environmental business services offered by BGH, the Efficiency Toolkit allows businesses to track opportunities for investment, such as retrofit of LED lighting systems and other low carbon technologies, or replacement of raw materials in a manufacturing process with a recycled alternative. The Toolkit calculates paybacks and carbon emissions savings so businesses can prioritise the most suitable opportunities. Carbon Smart has used their industry expertise to ensure the Toolkit is accurately updated with the newest available Defra 2016 conversion factors and latest energy and water prices.

Carbon Smart has also analysed the current and future environmental reporting and policy landscape to assist BGH in understanding what type of support SMEs may need in the coming years. This allows BGH to put steps in place now, to ensure SMEs are prepared for their future obligations and further growth opportunities.

Rebecca Chedd from BGH said: “Carbon Smart helped us to update our toolkit and provided a detailed review of the greenhouse gas reporting and energy regulation landscape. We had a very positive experience working with Carbon Smart – they are certainly experts in this area, and delivered clear and accurate work which helps us directly support the SMEs in the North West.”

2015 conversion factors released – time to update your reporting

Carbon Smart has once again worked with Defra and DECC to put this year’s conversion factors online via their dedicated platform http://www.ukconversionfactorscarbonsmart.co.uk/. All organisations that report their greenhouse gas emissions should use them to calculate their carbon footprint for 2015.

So what’s new for 2015?

  • A 6.5% drop in the UK electricity generation factor compared to 2014
  • For the first time, the conversion factors are based on the UK greenhouse gas inventory (GHGI) in alignment with the 2006 IPCC Guidelines for national inventories including updated fourth assessment report global warming potentials. This has caused methane (CH4) and nitrous oxide (N2O) to noticeably fluctuate compared to previous years’ factors
  • Alignment of CRC reporting to the annual UK conversion factors
  • Introduction of additional refrigerant factors

With many organisations busy collecting data and conducting energy audits to ensure ESOS compliance, it’s certainly worth putting a review of the updated conversion factors on your to-do list so that your end of end of year carbon reporting and CRC submissions don’t get forgotten about.

Call us if you have any questions regarding the conversion factors and how to use them: 020 7940 8285.  

Workshop series on greenhouse gas reporting: conversion factors, regulation and guidance

n 2013 Defra appointed Carbon Smart to lead a review of the UK’s conversion factors for greenhouse gas reporting. The goal of the review was to improve the usability of the factors through simplification and the development of an online tool to better navigate them. The resulting changes to the factors themselves and the way they are presented will affect any organisation that reports on emissions in the UK.

As part of the overhaul, Defra have relaunched their environmental reporting guidelines and finalised the mandatory greenhouse gas regulation for quoted companies.

business seminarThese positive actions aim to propel both greenhouse gas disclosure and low carbon operations forward, as the UK strives to reach ambitious carbon reduction targets.

Central to all of these changes is the need to simplify greenhouse gas disclosure and keep reporting as easy to follow as possible, freeing up organisations to take real action.

If you are new to greenhouse gas reporting, or haven’t quite kept up with the changes to Defra’s guidance, the new regulation and the 2013 conversion factor format, book a place to one of our workshops to enjoy a masterclass with members of the Carbon Smart team.

The workshops will be held in:

London – 26th November 2013 (Location and time TBC) click here to reserve a place

Manchester – 28th November 2013 (Location and time TBC) click here to reserve a place

Edinburgh – 29th November 2013 (Location and time TBC) click here to reserve a place

Places are limited and will be confirmed in due course with exact locations and timings.

Top companies join our masterclass to ensure carbon reporting is right

You might think that the largest companies need little assistance with their annual carbon reporting, however the extensive changes to Defra’s reporting requirements this year has made even the biggest players take stock.

Sainsbury’s, BP and Coca Cola Enterprises (amongst 40 other private and public sector giants) joined Carbon Smart’s reporting masterclass to understand the practical implications in carbon accounting terms, but also the impact on stakeholders’ perceptions of this years’ reporting.

Andrea Smith from the CDP began proceedings with a whistlestop tour of the new Mandatory Greenhouse Gas Emissions Reporting regulation.  Our discussion with the room revealed that the requirement for organisations to report an organisation-wide carbon intensity metric remains one of the most controversial areas of the new regulation.  In particular, the extractive industries and diverse financial institutions are struggling to find meaningful metrics that represent their organisations’ activities and accurately portray their sustainability story year on year.

Exploring aspects of the new Defra reporting guidelines Ben Murray from Carbon Smart worked with the delegates to tackle the challenge of data collection.  Comparing sustainability reporting to financial reporting, he pointed out, “sustainability reporting, unlike financial reporting, is not a mature, ingrained process with clear communication channels in an internationally understood language; it is a practice that is thus far based on best endeavours across a tangled web of different departments, many of which are not employed to produce sustainability figures.”  Ben’s top recommendation to organisations is to use a widely communicated reporting protocol to highlight the importance of each piece of data collected, and emphasise responsibility for data accuracy in the context of the organisation’s final report.

Rounding off the session; Julie Emmings from Carbon Smart led a technical session on the 2013 conversion factor changes.  Although the changes have short term implications, the long term horizon is that reporting will be simpler and fewer retrospective changes required leaving organisations with more time to get on with carbon reduction action.  One organisation contributed, “No one likes change, but change is overdue; this is a big improvement on the previous approach, cleaner, tidier and more consistent with other international approaches”.  We invite you to judge for yourselves at: www.ukconversionfactorscarbonsmart.co.uk.

The masterclass has clearly demonstrated that with the new legislation, many high profile organisations are keen to get their reporting right first time; putting effort in to clarify the requirements up front.  We would advise other organisations to follow suit and reduce the risk of trying to rectify issues on the eve of a reporting deadline.

If your organisation needs assistance getting up to speed, Carbon Smart offers  a range of reporting training modules, guidance and implementation support, please contact us on 0207 940 8285.

Defra conversion factor resources are overhauled in time for new mandatory greenhouse gas regulation

Simplification of the Defra conversion factors will require organisations (both experienced and new to reporting) to fully appreciate how recent changes affect their UK greenhouse gas reporting.  Some organisations using the Defra conversion factors will need to rebaseline their data to align with the new approach; others will find new simpler ways to get to the factors they need. There will undoubtedly be some short term pain, but longer term the gains will be significant as the impact of the simplification is felt.

Defra’s brief to sustainability consultancy Carbon Smart has been clear; simplification and improved usability of all aspects of the conversion factors is essential.  After three rounds of stakeholder engagement with cross sector organisations of all sizes and levels of reporting experience, the final revisions to content, guidance and navigation are now complete.

So what are the headline changes?

  • New online navigation system with downloadable excel outputs users can tailor
  • Simplification through location of guidance annexes (e.g. CHP, refrigeration) in Defra’s newly revised environmental reporting guidelines
  • Simplification of the convention to recalculate for updated factors
  • Reduced reporting ambiguity (e.g. electricity factors will be displayed as a 1 year grid average only)
  • Alignment of listings more closely with WRI Scope 3 protocol
  • Consolidation of complex information regarding the determination of the factors to the methodology paper

Julie Emmings, Senior Consultant at Carbon Smart said: “across the board the stakeholders we engaged with were ambitious in their future needs for the conversion factor tools; with strong emphasis on making the future resources simpler to understand, quicker to use and ultimately allowing them to get on with taking action”.

“This is a timely review of the conversion factor resources, which have organically grown over the last few years and become quite difficult to navigate.  With the new mandatory greenhouse gas reporting regulation bringing through hundreds of new reporting organisations we really needed to bring a fresh new approach,” she added.

Carbon Smart have specifically focussed on improving the user-friendliness of the conversion factor tools and provided simple, jargon-free guidance to assist different user groups through the transition to the new format.  The ultimate aim has been to make conversion factor selection the least time consuming part of the reporting journey.  Feedback from users who have trialled the new online solution has been very positive.

The new conversion factors resources were launched on 12th June and can be found at: www.ukconversionfactorscarbonsmart.co.uk.

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