There is a growing necessity for property managers to develop metrics and methods of reporting data for carbon emissions to stakeholders and interested parties.
Establishing a good carbon disclosure framework is as much about creating corporate context as it is about lending tangibility to the intangibles of accountability, credibility and transparency explained Wendy Potomski, Vice President, PwC speaking at the Better Buildings Breakfast in Ottawa on January 19th.
While not yet regulated and mandatory across the board, there is an increasing demand from various groups – stakeholders, investors, community groups, employees, regulators and of course customers – to track and to report on GHG emissions.
“As with any commitment, if you measure it, you will have an easier time proving that you are making progress against your goals. By measuring your carbon and energy consumption, you can take specific steps to reduce them – which can save you money and help you become more operationally efficient.,” Potomski said.
While theoretical value can be derived from the reputational credit associated with actively managing emissions, having an accurate carbon disclosure framework in place can assist organizations with achieving more tangible value from sustainability.
The challenge, however, is that there are a number of different ways to measure and report on GHG emissions. The absence of a standard way however makes it difficult to compare apples to apples within the sector.
Part of the solution of moving towards an industry standard is to provide guidance to companies for the development of their own carbon disclosure frameworks.
A rule of thumb is to adopt many of the same principles and reporting structures that are utilized in a company’s financial reporting structure. As with reporting of financial information, data should be provided in a clear and accurate format that supports an understanding of directives, and provides comparable analysis.
Reporting tools can range from quite simple (i.e. Excel Spreadsheets), to more complex software and data analysis systems. While some companies may choose to outsource data collection and reporting, much can be done in-house.
“You don’t necessarily need to go external,” said Potomski. “If you have the internal capability, then you likely have the ability to manage the process internally. However, the complexities associated with GHG emissions gathering and reporting is quite technical. If you aren’t confident that you have the expertise internally, you may want to look for an advisor who can provide the guidance and assistance you need to get started. From there, you can potentially manage the reporting process on your own.”
When building a framework from the ground up, it is important to start with a clear focus and goal in mind, so that metrics and associated accountabilities are in line with strategic objectives. “As a starting point for your sustainability strategy, identify the overarching goals that are most important to your organization, and then determine how sustainability initiatives will help you achieve those goals. By aligning your business strategy and your sustainability strategy, you will be better positioned to be successful,” Potomski advised.
Part of this comes from understanding what your position is on the sustainability maturity model – essentially where you are in relation to where you want to be.
A disclosure framework can serve not just as a communication tool for stakeholders, but as an internal metric to gauge progress in terms of reducing carbon emissions and identifying market opportunities. It can also act as tool to help measure a company against competitors.
“Sustainability is an issue – or a lens through which you can look at your entire organization. Use it to determine how prospective initiatives will affect all aspects of your organization – your supply chain, operations, investment decisions.”
When setting up a disclosure framework, there are five key elements to be considered, Potomski advised, management discussion and analysis, assessment of risks and opportunities, establishment of key performance indicators, corporate governance and reporting and the statement of GHG emissions.
Although a carbon disclosure framework in many ways mimics a financial disclosure framework, it should address and acknowledge the impact that carbon emissions reporting has both on a company’s reputation and on its operations. This kind of information is not necessarily apparent in standardized financial reporting methods – it necessitates the development of a separate and comprehensive carbon disclosure framework.