By Mark Chadwick and Tiffany Day
Transparency is big business, and getting bigger. The push for transparency in corporate environmental practices and impacts is growing fast and, globally, driven by sustainability-minded investors, by consumers, by new purchasing priorities, and by legislation.
As a result, companies around the world are dedicating more resources to measuring and mitigating their environmental impacts — from the carbon footprints of their supply chains to water consumption at their facilities and everything in between. Supporting these trends are indexing and reporting entities such as the Global Reporting Initiative, the Dow Jones Sustainability Index, and, perhaps most important, CDP (formerly known as the Carbon Disclosure Project). All of these initiatives require participating organizations to meaningfully measure, document, and reduce carbon emissions – providing a standard for assessment by stakeholders.
A partnership for the future
The move toward transparency is also contributing to rising demand in the environmental, social, and corporate governance (ESG) sector, leading ESG providers like FirstCarbon Solutions, Carbon Clear, and others to think innovatively about how we operate. The recent partnership we announced with Carbon Clear is a case in point. We announced this new collaboration to expand our aggregate reach and develop joint services to help companies measure, report, and reduce their carbon and other environmental impacts. Simply put, industry needs are growing fast – and we can better meet them by working together.
Energy, greenhouse gas management, and transparency in ESG isn’t just mission statement jargon – it requires technology, data management, industry and subject matter expertise, and strategic planning to put a framework in place for ongoing measurement, reporting, and mitigation. Those who provide these services have a shared mission – and increasingly we’ll need to join forces for innovation and expediency.
Our new partnership is a matter of both efficiency and synergy. Carbon Clear brings deep subject matter expertise in integrated carbon management and advisory services, particularly in the verticals of finance, food and beverages, and manufacturing. The company focuses on helping global clients develop carbon management practices both in their operations and supply chains — by measuring and reducing carbon impacts, setting carbon strategies and targets, and complying with carbon-related legislation.
FCS provides consulting services and particular expertise in ESG software and data management solutions and business intelligence. With ESG, a data-intense business, companies are required to identify, gather, cleanse, and standardize their energy and environmental data in an integrated and practical way. FCS provides those systems, and the Carbon Clear team analyzes trends and anomalies in the data to ensure appropriate and robust reporting and interpretation.
The importance of the data and data management aspect of the new world of ESG cannot be overstated. As capturing and reporting on energy and environmental inputs and outputs becomes an integral part of doing business, automated and streamlined systems for managing the process will be vital infrastructure.
Specifically, CDP’s supply chain program helps companies and their suppliers manage growing business risks related to climate change and water shortage. Carbon Clear and FCS are Silver- and Gold-level partners with the CDP, respectively, and FCS has scored more than 11,000 CDP disclosures globally. Last year, CDP designated FCS as its global sustainability business process outsourcing partner under a three-year agreement.
As more and more global companies – and the suppliers that serve them – leverage CDP to document sustainable supply chain management, the services provided through this partnership and others like it will become crucial resources.
Why do they report?
Reporting sustainability has proven to be good business. Certifications appeal to investors, and voluntary disclosure of environmental performance and transparency in sustainability status can provide a significant competitive advantage in the investor and consumer communities. In fact, Accenture and the United Nations Global Compact (UNGC) published a study in which 80% of the executives polled reported sustainability as a way to gain competitive advantage.
According to CDP, disclosing organizations are able to demonstrate:
- Increased awareness of greenhouse gas emissions hot spots so that they can begin to reduce them.
- Understanding of and leadership in managing the risks from climate change, deforestation and water scarcity.
- How they are creating opportunities to innovate and generate revenue from sustainable products and services.
But there’s more to the story. Sophisticated investors recognize that sustainability, transparency, and environmental accountability are connected to a company’s long-term risk. Transparency and voluntary reporting also demonstrates how a company is future-proofing itself from climate change and water scarcity impacts.
Companies that measure their environmental risk are better able to manage it strategically and plan for a future in which managing energy resources and environmental threats is a daily activity.
It’s hard to have an upbeat conversation about climate change. But the FCS and Carbon Clear partnership is an optimistic one.
As corporate sustainability increasingly becomes a core element of global business, so will innovation. Working collaboratively, we will find new ways to help companies and organizations around the world improve environmental performance, compete, and thrive in a changed and changing world.
About the Authors:
Mark Chadwick is the CEO of Carbon Clear, a leading provider of carbon management and offsetting services. www.carbon-clear.com
Tiffany Day is the Director of Sustainability at FirstCarbon Solutions, a pioneer in environmental, social and governance (ESG) solutions. www.firstcarbonsolutions.com
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