Responding to Energy Supply Failure

The Perfect Storm

The graph below illustrates that since 2004 the UK has become increasingly reliant on imported energy. Although many would argue that energy independence and energy security are not mutually exclusive, the trend of increasing reliance on foreign imports raises serious concerns when coupled with predicted capacity shortage.

 

The UK Office of Gas and Electricity Markets (Ofgem) has warned of an impending perfect storm, as the depletion of indigenous gas reserves, the drive to reduce greenhouse gas emissions and the need to renew and upgrade ageing energy infrastructure inevitably combine to debilitate UK energy supply. With this perfect storm due to hit as soon as 2015, it’s imperative that the discussion on how to respond to this ‘energy trilemma’, illustrated above, continues to gain momentum.

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Recognising & Celebrating Failure

In December, The Crowd hosted a forum on ‘Celebrating Failure’, at which I sat on the Responding to Energy Supply Failure round table. In what resembled mass group therapy, four panellists proudly shared their fantastically engaging and entertaining stories of heroic failure. The stories ranged from Trewin Restorick’s pioneering glitzy and glamorous sustainable lifestyle magazine ‘Ergo’ which attempted to communicate sustainability issues to a market that turned out to be non-existent, to Matt Sexton boldly taking B&Q into the domestic micro wind turbine market, which was doomed to failure due to the wind-sheltered urban environment. The round table that I had the pleasure of joining then took the theme of failure a step further by looking at how organisations might constructively engage with the impending failure of energy supply.

The round table was attended by a mix of representatives from both private and public sector organisations, ranging from IBM to Transport for London (TfL); stark differences in their needs, challenges and perspectives quickly emerged. While the non-existent mechanism to control energy costs, and thereby the cost of a product or service, featured at the top of everyone’s wish list, the private and public sector organisations then diverged to prioritise energy efficiency and supply reliability respectively. This disparity is reflected in their preparations for potential energy supply failure, as the private sector typically invests in improving everyday energy efficiency while public sector institutions like TfL are under pressure to meet targets, therefore allocating investment to the assurance of emergency backup power generators.

The conversation evolved to explore dissimilarities in the way that each of the represented organisations approaches energy supply failure, highlighting the complexity of this multidimensional challenge. The electrification of transport, for example, reduces dependence on imported oil but does so at the cost of increasing dependence on electricity infrastructure. This demonstrates that it is arguably naïve to hope for a universal solution. Instead, response to energy supply failure might resemble an iterative journey with an expectation of stakeholder compromise rather than a promise of alignment. Reports have explained that an understanding of system networks is key, so response to energy supply failure ensures resilience to both short- and long-term shocks for both individual components and the whole energy system.

 

Building Resilience

There was a general consensus around the table that the Coalition Government’s proposal for Electricity Market Reform (EMR) might be the best way forward. The EMR programme stimulates investment in low-carbon technology by creating a less risky market through a combination of Contracts for Difference (CfD) providing predictable revenue, and Capacity Mechanisms (CM) ensuring reliable supply. EMR is positioned to be a leading contributor to the £110 billion investment required to replace and upgrade the UK’s ageing energy infrastructure, and promises to do so in a way that also drives decarbonisation and improves energy efficiency.

The important question was: what can these organisations do to achieve energy security, affordability and decarbonisation in the face of political uncertainty? The round table agreed that two of the most effective approaches to this challenge are optimising the energy efficiency of our building stock and investing in renewable energy generation.

With regards to renewables, the first challenge is to help investors see the relevance of renewable energies, because they contribute towards a more diverse and thereby more resilient energy supply. In the record-breakingly long and cold winter of 2013, for example, the spike in gas demand was met by wind farms which had the right weather conditions to operate at maximum capacity. By offering renewable energy packages that work alongside existing business strategies, companies with electric supply shortage and those with organic waste, for example, could implement a biomass project, without needing a radical change in strategy.

Effective energy efficiency and carbon management strategies can help organisations to overcome the energy trilemma. The investment case for energy efficiency projects is well established, with a body of evidence to support business case development for both private and public sector organisations. Additionally, legislation such as the CRC Energy Efficiency Scheme and the 2011 Energy Act, which will make it impossible for landlords to let buildings with an EPC rating of F and G from 2018, help to create financial incentives for both public and private sector organisations.

The psychological dissonance that hinders the translation of concerns into actions is now widely conceived to be as grave a problem in its own right as the energy supply failure problem itself. As the financial and societal consequences of inaction become clearer it is refreshing that influencers within this space are coming together at forums such as The Crowd to share their experiences and collaboratively develop solutions. In order to respond effectively to energy supply failure, strategies need to prioritise actions, outline responsibilities and provide a clear roadmap for implementation while remaining consistent with the wider existing business strategy.

Criminality and Negligence in the European Carbon Trading Market

In November, a bunch of us from Carbon Credentials headed to the Frontline Club to watch a barbed documentary by investigative journalist Tom Heinemann exploring the dark side of European attempts to efficiently curb carbon emissions through harnessing the power of the market. The piece is leadingly titled ‘The Carbon Crooks and provokes the question: is it equally crooked for an institution to perform incompetently as a legislator as it is for criminals to exploit gaping loopholes in the legislation itself?

A primary purpose of the film was to highlight the stark flaws in the European Union Emissions Trading Scheme’s (EU ETS) framework and to explore not only their exploitation but also to question why they were not remedied sooner.

Firstly, the fact that transactions involving EU ETS credits were subject to a consumption tax exposed them to exploitation, namely the VAT carousel: a well appreciated method of defrauding a national treasury. This was enabled on a staggering scale by extremely lax registration rules in certain countries and the ability to shift a vast quantity (and so value) of credits across borders in an instant, rather than moving physical goods as is traditionally necessary for the scam.

Secondly, the security around accounts and transactions worth millions of Euros was so poor that the theft of credits, by way of hacking, was rife.

 

Billions lost, but who’s to blame?

It is inevitable that if a valid opportunity exists to engage in illicit revenue generating operations, criminal outfits will exploit them. Lo and behold many of the more nefarious organisations of our generation did exactly this.

What is difficult to reconcile is why this effect was not anticipated when the scheme was implemented, why it took €15 billion of illegal activity before significant action was taken (although some nations still apply VAT to carbon credit transactions) and, if each credit is digitally marked and tracked, why little of this criminality has been brought to trial. Representatives from Europol and the European Commission were reported to acknowledge they were able to locate missing credits and track their transaction history, however protested that they did not have the jurisdiction to prosecute.

Both Heinemann and the audience struggled to understand why national governments have taken so little interest in recouping these billions in fraudulent tax refunds and stolen credits, especially given a period of continent wide austerity measures. However, high profile arrests of Deutsche Bank employees in relation to carbon credit trading imply that the crimes were widespread and Heinemann was left with a wry smile when an audience member suggested that perhaps years of crises affecting the financial services, including subprime mortgages, Libor rate rigging and, most recently, rumblings of foreign exchange rate rigging and energy price fixing, have meant that governments cannot afford to have them publicly indicted again.

So, with few prosecutions, who can we label the crooks? The clandestine criminal organisations, the impotent legislating structures or, once again, the financial institutions?

 

A market to rule them all…

A parallel focus of the film explored the more general theme of using market mechanisms for curbing emissions. The EU ETS, a compliance market, suffered plummeting carbon credit prices, leaving emitters in the position where it “has never been cheaper to pollute”. This situation, where credits are almost insignificant in price, is the result of an oversupply of permits whose restriction was rejected by the EU Commission in the face of pronounced lobbying and a further failure to peg the supply of credits to production which fell significantly during the global financial crisis.

Whilst European Commissioner Connie Hedegaard rightly states that the EU ETS is “the most cost-efficient tool in EU climate politics”, poorly managed it is also likely one of the least effective. Indeed it is arguably worse than ineffective as it gives the perception that action is being taken despite no discernible gains being made, allowing policy makers to blindly reassure us that the powers of the market will prevail.

Those engaging in emissions trading, both mandated and voluntary, are given the option to avoid the issued allowance market in paying for a portion of their emissions and to instead finance reduced emissions through Clean Development Mechanisms (CDM). These are represented through credits known as Certified Emissions Reductions (CERs) approved by the UN and accredited by independent bodies which profess to represent real greenhouse gas emission reductions. These credits are intended to allow the twinning of industrial capital to pay for emissions reduction and a sustainable infrastructure trajectory in developing countries.

However, beyond the persistent problem of gross oversupply equally present in this subset of the EU ETS, the documentary explored the worth of these CDMs. Staggeringly, an independent report found that over half of projects ratified for CDM involvement did not meet UN standards, with credits being issued for projects that were already completed or not implemented. In this way, European emissions are decoupled from reduced emissions elsewhere and the carbon market is impotent once more.

Lastly, Heinemann set his sights on the validity of the voluntary carbon market that entices corporations or individuals to offset their emissions, focussing on projects that issue credits ratified on the basis of an economic concept of suppressed demand. These credits do not represent actual emissions but rather the removal of a behavioural preference for emissions in a population that is currently supressed. Individuals are surveyed for a behavioural preference which they cannot fulfil due to their immediate economic circumstances, however if circumstances were to change, individuals are assumed to act on this preference as they are no longer behaviourally ‘supressed’.

The Lifestraw, an ingenious tool for purifying drinking water, was taken as a case study. Individuals from Kenya were surveyed as to whether they would, given the economic power, boil water to purify it for drinking. Unsurprisingly, the vast majority said they would, indicating that there was a large ‘supressed demand’ for combustion and so greenhouse gas emission. A project that could provide clean drinking water would therefore, in theory, entirely remove this tendency towards additional emissions. Whilst this sounds to be an ideal twinning of humanitarian and environmental goals, there is little empirical evidence to encourage faith in the idea that a stated preference to a fantastical situation reveals real intent.

Theoretical issues aside, the efficacy of these credits as carbon reduction vehicles depends on how effective the Lifestraws really are at providing clean drinking water and so removing the stated preference. The technology is certainly effective in cleaning water however its use in day-to-day life was cast into doubt due to the frustratingly slow filtration rate. Individuals, including local political leaders, interviewed by the director stated that their use was very limited. This is in stark contrast to the results of the producer’s surveys, but without any primary evidence released to support this, little can be confirmed.

We can only wonder: is the consumer being hoodwinked by disingenuous promises of emissions reduction in order to fund humanitarian projects of limited use?

 

Problems aplenty, so where can we go from here?

The documentary resulted in a fiery and involving discussion that asked: what now? We were repeatedly shown the shortcomings of the current market based approach, perhaps a relic of ‘90s economic thought, and some of the actors involved at each stage. So if the system is patently broken, how can we fix it?

It is clear that past suggestions to broaden its scope by linking the EU ETS with its Australian equivalent are definitively the wrong solution and can only result in further dilution of carbon credits. Whilst a more networked global effort at greenhouse gas regulation is necessary to avoid the inevitable offshoring of pollution to ‘emissions havens’, the process of integrating disparate carbon markets can only be feasible when carbon prices are stabilised around the point that they encourage the use of cleaner, more expensive technologies or fuels.

Until then, CDMs, despite their flaws, may be used as a sort of ‘currency’ to intermediate between regions in place of wholesale integration. Above all, if we are still determined to place our faith in markets, what is required is strong leadership and regulation of the existing system, not a patchwork of ill-implemented schemes, flawed in their own right.

As an alternative, audience members proposed a retreat to command and control regulation of emissions, an idea given weight by leading climate scientist Jim Hansen (amongst others) last year. However, if the EU Commission have shown themselves unable to sensibly regulate the carbon market, it is difficult to imagine they will have the strength to mandate a necessarily severe price per unit emissions to promote a greener industry. Sadly, time marches on as we sit impotently by, unable to address the situation in the European Union, let alone the broader and more severe global emissions landscape.

 

*A transcript of the documentary can be found at: http://carboncrooks.tv/transcript/

 

A Storify of the 3rd Annual BASIS Conference

Yesterday, we were delighted to sponsor and exhibit at the 3rd annual BASIS conference (British Association of Sustainable Sport). Our Energy Services Director, Paul Lewis, chaired the Energy & Carbon session, fielding questions to the panellists and facilitating discussions with delegates. It was an absolutely fascinating and highly educational event, and before my colleague Georgie and I write a more in-depth blog about the day, I thought it would be good to create another Storify to give you a flavour of the conference and the topics that were up for discussion. Enjoy!

Prioritising Sustainability

On 30th October, Net Impact hosted a debate at the HUB, Westminster, discussing: ‘What are the most effective ways of developing a sustainable culture?’ The discussion was framed by participants considering how they would prioritise their efforts in their first year of working at a hypothetical large corporation. Leadership, people engagement, data management and collaboration were outlined as the four key drivers of corporate culture change, and were each advocated by a panellist in a play-off to establish the most important driver. It was clear from the ice-breaker activity, in which the audience struggled to reach consensus on how they would prioritise the four, that this debate tackles an area of little pre-existing agreement with much need for creative thinking.

Data and people engagement

Ben Kott, CEO of Energy Deck, advocated data as the primary driver as, without it, progress is unmeasured and success risks being unrepeatable. Collected data needs to be analysed and reported so that opportunities for improvement can be identified and next steps can be planned. Paula Owen, Founder and Director of both Eco Action Games and Paula Owen Consulting, argued the corner for People engagement, suggesting that even the most energy-efficient building is doomed to under-perform if its occupants practice energy-inefficient habits. People engagement is therefore a prerequisite of benefiting from energy-efficient technologies.

Leadership

Adam Woodhall, Culture Change Director at Carbon Credentials, warned that the best intentions risk amounting to nothing without good leadership. For a leaders actions to be supported by a cooperative team and justified by data is not enough; Adam suggested that Marks & Spencer couldn’t have attained such excellence in terms of sustainability if CEOs of the last six years, Stuart Rose and Mark Bolland, hadn’t been so committed in both head and heart. In his position at Carbon Credentials, Adam specialises in advising organisations on how to improve their sustainability through the kind of leadership that ensures that sustainable practice is asserted through good leadership and then perpetuated by motivated stakeholders at all levels.

Collaboration and integration

Luke Nicholson, Director of Carbon Culture, proposed that collaboration and integration both across companies and across disciplines is the most powerful driver. The opportunities for innovation from sharing and combining strategies of sustainable best practice are boundless; Luke highlighted the potential to align sociocultural and technological initiatives such as well thought-out building layouts and PAR lighting sensors, for example. It can, however, be challenging to incentivise the transparency required for collaboration because competing organisations may be reluctant to relinquish their competitive advantage.

By the end of the debate, a show of hands revealed that the panel discussion had prompted around a half of the audience to adjust their initial impressions. Importantly, the process of outlining and asserting each of the four culture change drivers had also revealed their inextricable links. Good leadership is meaningless without engaged people, and engaged people are most effective when strategically informed by robust data to act in a way that integrates various opportunities to find novel solutions.

Having illustrated the synergy between various culture change drivers, all four panellists stressed that stakeholder disinterest and alienation must be avoided at all costs. How to best develop sustainable culture therefore remains a big topic for further discussion.

CRC Phase 2 Beckons Yet Confusion Still Reigns Supreme

Co-authored by Rogier Hintzen and Russ Avery

CRC Phase 2: participants and policymakers meet

In our experience of running and attending myriad sustainability events and workshops (ten so far this year and still two to go!), assembling representatives from cross-sector organisations in the same room always makes for a dynamic and engaging occasion, during which questions and challenges are presented, experiences and best practices shared. In our most recent workshop, held on 30th October at RSA House in central London, CRC Phase 2 qualification and registration was the topic of the day.

“I have found Carbon Credentials’ various workshops I’ve attended to be a fantastic additional resource in learning about wider issues relating to the CRC programme, as well as discussing issues and experiences with peers in other fields. The Carbon Credentials team are always happy to help and advise in any way”. Helen Gough, Procurement Administrator, Allied Healthcare

In my capacity as Marketing & Communications Manager, I am habitually removed from the actual presentations of our workshops as I scurry around the venue making sure that everything runs according to plan. This time, however, thanks to colleagues who provided excellent support, I was able to sit among the attendees and participate in the group discussions.

One thing that became glaringly obvious to me after the first Q&A session was that our in-house banter that CRC stands for ‘Complicated, Really Complicated’ still rings true (we’re far wittier than that normally, I promise). When Alison Mungall, our CRC Director, finished her first presentation about Phase 2 qualification, a forest of hands shot up as soon as the audience was asked if there were any questions. “Why do they have to make it so complicated?” asked one participant. Well, as luck would have it, later in the morning we were fortunate enough to be joined by Donald Sproson, one of DECC’s CRC policy officers.

Attendees relished the opportunity to ask Donald any questions they had about Phase 2 qualification and registration, as well as more general questions about participation in Phase 2 of the scheme. One of Donald’s recurring answers was that everyone would have to wait until the next piece of guidance is published in the coming weeks. However, all other questions were answered readily and succinctly, often providing participants with the clarification they were seeking, even if the answer wasn’t always the one they’d hoped to hear!

One of our newest team members is Rogier Hintzen, who joined us in September as a CRC Analyst. I have asked Rogier, who attended the afternoon session of the workshop, to write the second half of this blog from his perspective as someone who has learned a lot about the CRC scheme in the last month or so and who is gaining increasing exposure to our CRC clients. So without further ado, Rogier – over to you, and welcome to the team!

The true nature of CRC: it’s not just a complicated tax!

Thanks, Russ! For me, the workshop was a great opportunity to meet clients old and new alongside unfamiliar faces of veteran and unblooded CRC participants. Common to everyone was not only a keenness for understanding the grey areas of CRC Phase 2, but also to question the very nature of the legislation itself.

Many of the queries were very much participant specific, geared towards the nuances of the legislation, and a thorough clarification required more analysis than a two minute response could afford. However the most heartening response across the attendees was a wave of comprehension with regards to the relevance of disaggregation, which allows fluid and complex organisations to disassociate themselves from disparate subsidiaries on an annual basis in the eyes of the CRC, ultimately reducing liability and reducing the organisational burden of compliance.

On the other hand, familiar, insoluble CRC bugbears reared their head again: participants are more and more fearful of the known unknowns of Phase 2 that have the potential to cause serious disruption to budgets being drawn up. With neither the buy-to-comply allowance price nor purchase dates fixed and the possibility of a double payment in 2014, it is difficult for environmental management departments to forecast the financial impact of energy inefficiency and the cost of compliance. This has led to a sentiment of despair amongst those responsible for CRC compliance in large organisations on whom the executive finger will come to bear when unexpected sums turn up in budget reports. It was great to see Carbon Credentials step into the breach and offer to act as an intermediate between participants and legislators in lieu of an official consultation, hopefully facilitating a necessary dialogue between the two parties.

From my perspective, the most interesting part of the discussion turned towards addressing the character of the CRC legislation in order to achieve its ultimate goal: energy efficiency. It is obvious that the scheme, riddled with amendments, is far from complete. Critically, some participants suggested a wholesale modification of participation by simply applying an equivalent levy onto energy bills. This belies a fundamental failing in the CRC so far and a great hurdle for it to cross before it can really address energy efficiency at the root. The point of CRC, which is far more apparent in the format of Phase 2, is not simply to act as a pseudo tax on participants, but rather to encourage the management structure to examine and understand in-house energy consumption. In this way, organisations are driven to address consumption not just as a fixed quantity in their annual budgets but to use introspection and foresight to incorporate sustainability into strategy.

There is definitely work to be done on the legislation itself before it truly works as an energy efficiency scheme, however the workshop showed the value in simply engaging with participants.

A Storify of Our Big Data Sustainability Blog

Over the last couple of weeks, this blog on big data and sustainability by my colleague Paul Bosworth has created significant buzz across the web, highlighting that this is an area being looked at by many businesses across the UK and globally. Scroll down to see a Storify that I have created about Paul’s blog and the buzz it created.

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Our Sustainability Journey

Two weeks ago we moved our two offices into one single location in central London. Why did we do this? It all started at our mid-year company review where we did a sustainability SWOT (strengths, weaknesses, opportunities, threats) on ourselves with the whole company present.

The results of this were that the biggest areas of value looking at our organisation through a sustainability lens were, in order:

  • Increased revenue
  • Reduced risks
  • Productivity of staff
  • Attrition of staff

Some results of our own sSWOT analysis.

Under our “Curiosity” value, we are constantly improving and innovating our products to increase revenue from our sustainability product lines (which include compliance, data services, energy services and sustainability services). Risk management is in our blood too, our commercial director Richard Green having come to sustainability from running a business continuity business for many years before founding Carbon Credentials. So we decided, at our biannual review in January, to focus on the productivity and attrition of staff.

We know that attrition of staff cost us lots of both time and money, and so we instigated a “hiring for attitude” process which has been exceptionally successful.  We also created our “Carbon Credentials Foundation” ensuring that we are able to support the desires of our staff to do more than just a day job in our desires to change the world for the better.

And the spaces where we spend most of our working lives? It didn’t take long for consensus to emerge that working over two offices was reducing productivity, that more and more staff were London based and would prefer a central London office, and that a single floorplate which encouraged communications and inter-silo knowledge transfer would be our ideal. So the search was on for a new office that was:

  • All on one floor
  • In a good location for our clients
  • In a good location for our staff
  • Laid out in such a way that fostered knowledge sharing and communications

We found our new office, perfectly located a few minutes walk from Waterloo (which is my station in London!), and less than a minute from Embankment and Charing Cross – ideal for the vast majority of our staff and for our clients to visit us easily.

Then for the fit-out itself, we:

  • Re-used everything we could: cabling, old worktop for new printer shelf, old wall dividers for new meeting rooms, etc.
  • Installed LED lights replacing old T8 bulbs in our reception area
  • A/C equipment: we analysed air movement and moved equipment accordingly to allow best heat transfer
  • Conducted an acoustic audit to ensure noise was kept to a minimum (noisy offices cause stress)

New Office: Before & After Photos


You can view the slideshow in full screen by clicking the ‘View Fullscreen’ icon in the bottom right corner.

The results? We’ll be monitoring staff satisfaction levels, productivity and attrition rates over the next 12 months, but early signs are good.

And back to the start; the sSWOT process for us highlighted where we ourselves needed to focus our own efforts around sustainability; we want to not just talk the talk but to truly walk the walk. We believe we can be better consultants if we take our own medicine and – it’s the old adage of walking a mile in someone elses shoes. For me personally, the experience of conducting the sSWOT, getting opinions and suggestions from all our staff members, acting on those suggestions and delivering stage 1 of our own sustainability MAP will enable me to have more empathy for our clients looking to go through a similar process.

Sustainability – doing more with less – just makes sense.

 

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How To Use Well Managed Data to Realise Your Sustainability Goals

Photo: Jenni C

Data, Data, Data

Sustainable business these days requires data, and lots of it. Companies are using sustainability data for a multiplicity of reasons: to inform corporate strategy, comply with regulations, evaluate investments, improve transparency, develop products and processes, manage risk, benchmark themselves against competitors, change organisational culture, and engage with supply chains.

Increasingly, companies that take a well-organised and data-driven approach are more likely to see investments in their sustainability programme pay off. This means using analysis to better inform decision making, leading to methodically prioritised initiatives that get off the ground far more quickly.

Once the data management programme begins to mature and data inputs are integrated that reach across a company’s financial planning databases and other operational information resources, opportunities for cost savings and revenue generation can be routinely identified and acted upon.

Driving Value From Data

My favourite example of an organisation using data to drive sustainable development is the United States Postal Service (USPS). Across 32,000 facilities, their Office of Sustainability designed  an employee-led programme to address goals in waste reduction, energy conservation, fleet fuel reduction, consumables spending, recycling, and water use.

To aggregate and display relevant data, USPS developed a Green Initiatives Tracking Tool (GITT). This features dashboards that allow cost efficiencies and performance enhancements to be monitored across the organisation. The GITT system achieves this by providing status updates for core projects, as well as financial information, through direct connection with the accounting system for each facility.

GITT is also designed to be interactive. It includes a start-up list of 41 suggested projects for facilities as well as guidelines and training modules for their completion. Managers can also understand clearly what projects are in place and where via sustainability performance metrics that are triggered upon project implementation. Ready access to GITT information and comparative tables enable comparison between facilities and geographies. Most importantly, USPS can now track progress in real time at a national level and support those facilities that need additional help.

By using data aggregation and analytics, USPS was able to gain visibility into its progress on sustainability and isolate over $52m in savings in 2012 largely due to employee-led initiatives.

Photo: Shawn Semmes

Linking Data and Mandatory Emissions Reporting

USPS was the first federal agency to both publicly report on its greenhouse gas emissions and receive third-party verification. For many organisations both in the UK and abroad, the first encounter with measuring organisational sustainability performance is typically via voluntary or compliance reporting of greenhouse gas emissions. From 2013, mandatory emissions reporting legislation will require all UK quoted companies to report their climate change impacts.

This means that those affected will need to collect, monitor, analyse and manage a vast amount of data from different sources. This may even involve collating information that has never been considered worthwhile before. Such large volumes of data will therefore require efficient collection and management systems, particularly for multinational firms with wide-reaching operations.

To date, many companies have remained reliant on Excel spreadsheets for on-going management of GHG emissions and other sustainability data (click here to read a blog on the limitations of spreadsheets by our Director of Data Management). Given the size and global reach of many organisations that will be required to report emissions within their directors’ report, Excel spreadsheets could carry too great a risk to both compliance efforts and successful realisation of value from sustainability.

Indeed, the most effective enterprise-wide sustainability programs use decision-making tools that go beyond disjointed spreadsheets to help guide strategy. Coupled with growing compliance commitments, organisations are increasingly moving out of the vacuum of spreadsheets and towards speciality software. Such systems provide a resource efficient, accurate and auditable way of managing emissions and other sustainability data.

Approaching Your Data Management Programme

Technological limitations and high storage costs have meant that the growth of sustainability data and analytics software has been slow up until recently. Today, however, online cloud-based systems can manage data across the organisation on emissions, water consumption, waste management and packaging, among other things.

However, purchasing the software itself is just a start. Even if your current focus is only on emissions data – there are 5 things you need to consider as part of your strategy for data management:

1)    Software

Look for scale and flexibility when selecting software to automate data collection. Do you need it to integrate with existing systems? Can you scale over time to collect additional data? Does it offer analytical capabilities? Selecting a user-friendly interface with different access privileges is also an important consideration.

2)    Processes

Ensure that you clearly define all processes for measuring, collating, transferring, processing, analysing, adjusting, aggregating or disaggregating, storing and final reporting of information. Have you incorporated suitable internal controls throughout? Do you have a comprehensive understanding of the sources of your data? It is particularly important that you recognise the impact on any current procedures you might have in place to ensure a smooth transition.

3)    People

Remember that the processes you establish and manage will be largely achieved through people. Are roles and responsibilities within the data programme clearly defined? Do you hold a register of key contacts which is regularly reviewed and kept up to date? Does everyone have access to appropriate training? Remember the importance of establishing good working relationships across all your contacts – from suppliers to building managers.

4)    Communication

Communication is important both internally within the system and for external reporting. Are all those responsible for data both inside and outside of the organisation aware of each other’s roles and duties? Are there processes in place for regularly sharing the results of analyses internally? Is this communicated so that different divisions can benefit from the mistakes and successes of other units?

For external communications, it is important that the data can be easily manipulated and arranged in order to satisfy varied reporting outputs. How can you analyse and present information so that it will appeal to different audiences?

5)    Action

Software helps to provide better structure around varied outputs: quarterly management reporting, annual reporting, baseline reporting, metrics analyses and scenario analyses et cetera. It can also be used to explicitly document corporate targets and track specific projects.

Even at an asset level, data can be used to understand the risks and impacts of poor building performance. These data sources include kWh consumption, control system data, sensors, degree days, occupancy, and so on. Once you can conceive of possible methods of analysing the data that impacts your portfolio’s energy consumption and expenditure, this can contextualised in order to determine where improvement opportunities lie and, from a statistical perspective, where outliers exist. Initiatives that should receive investment can then be selected, bolstered by a compelling business case based on hard data.

Visualising your data in a compelling way is another important consideration. How do you plan to target communications towards the needs of the facilities manager, energy manager, sustainability team, the CFO, investors and external stakeholders? Access to reliable, interesting, coherent information makes decision making easier – adding ways to make all that information understandable to the rest of us is essential.

Be clear about the outputs that you want from your sustainability data. These will evolve over time, so it is important to revisit this topic frequently.

Data Makes The World Go Round. Photo: Patrick Q

Recap

So, data makes the world go round. It’s up to companies to take advantage of new developments and technologies in order to realise their sustainability ambitions. At a recent company briefing, IBM Smarter Cities General Manager Michael Dixon said of the current advances in data that are available to us: “The obstacles to progress are cultural and organisational, not financial or technological” Dixon said. “Individual leaders are asking what to do with data and finding areas of resonance for their communities.”

Companies affected by the new emissions reporting legislation will find themselves at the beginning of a journey, one in which quick access to relevant, quality data, will be business-critical. Could your company leverage mandatory GHG reporting and data to become a success story like USPS?

CRC Internal Audit White Paper