As we go about our everyday lives and look around the Isle of Man, it is hard to appreciate that climate change is real. Here on the island, we are fortunate that we don’t wake up to heavy smog. We are surrounded by beautiful untouched nature and landscapes, but just because we can’t see it doesn’t mean it’s not there. It may come as a surprise to some, that between the years 1990 to 2017, greenhouse gas emissions in the Isle of Man have increased by 66%, from 500,000 tonnes to 840,000 tonnes of carbon dioxide, with households being the largest contributor to these figures. By comparison, the Channel Islands have seen a decrease in emissions during this time, where emissions in Jersey decreased by 41% and 36% in Guernsey, largely owed to their ability to draw on non-fossil fuel generated energy from France.
Everything we do leaves a carbon footprint, from the cars we drive, the food we consume, or the clothes we wear. As a business community on the island, it is evident we must be more conscious of our actions that lead to emitting greenhouse gases. Small changes like encouraging employees to engage in ride-to-work schemes instead of driving or recycling office paper can promote a positive step forward. However, while we can all play our part in reducing our carbon footprint, collective and transformative action must be taken on the road to sustainability. Real solutions need to be implemented to tackle the climate change crisis we are encountering.
To reach our global commitment to become a net-zero organisation by 2030, we are actively embedding ESG perspectives throughout our firm and into every service we provide. Businesses must adopt an ESG (Environmental, Social, and Governance) framework, which begins by measuring their carbon footprint through consumption. We have recently assessed our own carbon footprint through the lens of the ‘The Greenhouse Gas Protocol,’ which categorises emissions into three categories. Scope 1 includes direct emissions from owned or controlled sources, scope 2 focuses on indirect emissions from the generation of purchased electricity, and scope 3 includes all other indirect emissions that occur in a company’s value chain.
Our assessment identified that we emitted a total of 470.75 tonnes of CO2 equivalent between 2020 and 2021 and the results indicated that three main areas made up 80% of our total carbon footprint. They were the Scope 3 emissions of business travel (144.72 tonnes of CO2e), fixed assets such as laptops (125.66 tonnes of CO2e), and employee commuting (64.22 tonnes of CO2e.) This data enables us to home in on the critical areas of focus, rather than falling into the common trap of simply reducing waste or upgrading to energy efficient systems – both good things, but it won’t really make a big difference (for our footprint). For example, we are now implementing strategies to reduce business travel, consider our procurement of equipment and encourage staff to car share or cycle to work, to directly tackle the three areas where we can make the biggest impact identified above. The big challenge for service-based businesses, in particular, is that there are large elements of your footprint that you may not be able to control – such as the way your people travel to work or the inability to enhance the efficiency of your leased building.
Measuring your business’s carbon footprint
When it comes to measuring your carbon footprint, data collection is arguably the trickiest part of the process, as it will require you to obtain data for every component of your business's carbon-releasing activity (in the given time period) for example, your water usage, and employee travel. In some cases, the data can be very simple and easy to attain but in others it is the type of data that the business has not collected before or is not easily to hand.
Collecting the data is the first part of the process, then it is a case of analysing what you can and can't reduce, such as power usage, business travel, or office heating. In our experience on the island, depending on the complexity or size of your business, some businesses have worked with us to help with this.
Once you have the results, you can formulate a sustainability plan to understand your environmental impact better, the options open to you and start setting your environmental reduction targets. While there are other ways to mitigate your carbon footprint, such as engaging in carbon offsetting – planting trees, marine life carbon capture or investing in projects overseas - we feel this should only be the consideration after you have avoided all emissions as far as possible. While purchasing carbon credits may be a financially viable choice now, research indicates that carbon offset prices will increase fifty-fold by 2050; therefore, this may not be a sustainable option. Equally, unless you buy the best quality credits, your business reputation could be ruined if you are caught up in greenwashing schemes. Consequently, it's essential for businesses to reduce before they offset.
At KPMG, we aim to ignite an ESG revolution to become a global market leader and drive a movement for small or large businesses to think about their carbon footprint. Having a more transparent insight into your data will drive you to make impactful and efficient initiatives driven by an overarching strategy to reduce your emissions. Furthermore, you can use your data to demonstrate your commitment to sustainability to your customers, investors, employees, and communities. We can help you devise a concise, tailored route to understanding your ESG landscape.
If you would like to find out more about our ESG services, please visit: home.kpmg/cds
