Why your Company should deliver a carbon model

The nascent and esoteric world of carbon accounting and reporting is still a challenge for many stakeholders to understand in your Company.

Relevant stakeholders may not fully comprehend the bigger picture benefits of your Company adopting monthly reporting and analysis of its energy consumption/production, electricity usage and the associated emissions caused by your Company’s activities.

Educating your Company about the benefits of carbon reporting

There are a number of value-adding reasons  for your Company introducing energy and carbon reporting. A carbon report will detail energy efficiency of each business unit or asset/facility, in terms of the energy consumed or produced relative to the quantity of the carbon emissions. The carbon model will serve as a central reporting repository for all of your Company’s energy and carbon reporting needs such as for sustainability reports, Carbon Disclosure Project, corporate transaction or voluntary reporting initiatives such as Dow Jones Sustainability Index or FTSE4Good.

It will assist management to identify specific assets, facilities or business units that materially contribute to your Company’s future carbon liability. Your Company can undertake a cost-benefit analysis of assessing the capital expenditure of an energy efficiency programme versus the shutdown or divestment of a certain asset or facility. The regime of adopting monthly reporting guarantees a log of your Company’s emissions over a time period, which enables stakeholders to track performance of energy efficiency programmes or assess the impact of corporate transactions i.e. purchase of a gas-fired electricity generator or oil field, upon your Company’s overall carbon footprint.

 

Leveraging a carbon report for value-adding analytics

Once implemented, your Company’s energy and carbon model will be a powerful tool to leverage and deliver value-adding strategic forecasting and analysis.  What if or sensitivity analysis will provide the carbon impact on your Company from a hypothetical acquisition or divestment of a facility or asset. It can be depicted in a waterfall chart to illustrate its overall impact on your Company’s absolute emissions or emissions intensity for all activities. Your Company can hypothesise the various scenarios from a carbon tax or cap and trade, and the impact it will have on its bottom line under scenario analysis.