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The sustainability reporting space is often difficult to navigate due to the broad range of frameworks, standards, and methodologies available to businesses around the world. When faced with this abundance, many organisations fail to find the time to sift through the deluge of acronyms, websites, and documents needed to understand which path will be most relevant and useful to them. This can lead to companies giving up on sustainability reporting entirely, or investing their time and money into something that just doesn’t work for them.

ESI Monitor have done the research here, so you don’t have to!

We have created a brochure outlining the what, why, and how of sustainability reporting, which covers both voluntary international standards and mandatory UK and EU reporting. The brochure provides insight into over 20 different sustainability standards, frameworks, and methodologies including the TCFD, ISO 14064, the UN SDGs, and the CDP. Each framework, standard, and methodology is broken down into their most important and relevant components, so you can quickly create a clear picture of what each is, how it works, and what benefits it can provide.

 

  • Please provide your email address below to receive our Sustainability Reporting Standards brochure.

 

On a hot and humid day, nothing beats the sweet relief of a cool air-conditioned space. With the six warmest years on record all being since 2015, we are becoming increasingly dependent on air-conditioning to battle the heat in our homes, offices, shops, and cars. However, ironically, the technology we rely on to cool our spaces, is warming our world.

The cooling effects of air conditioning units are generated through the use of refrigerants, which include hydrofluorocarbons (HFCs), chlorofluorocarbons (CFCs), and hydrochlorofluorocarbons (HCFCs). These refrigerants slowly leak out of the units in a gas form, averaging at rates of 7-12% annually. The leakage of these gasses has highly damaging effects on our planet.

When assessing the impact that various gasses have on our climate, scientists use what are called Global Warming Potentials (GWPs). All greenhouse gasses are compared to Carbon Dioxide, which is given a GWP of 1. One of the most commonly used refrigerant gasses, R22, has a GWP of 1760. This means that R22 has a warming effect 1760 times greater than that of Carbon Dioxide. When quantifying emissions, the term Carbon Dioxide equivalents (CO2e) is used to represent the quantity of Carbon Dioxide that would create the same amount of warming. In the case of a single small air conditioner using an R22 refrigerant, 82kg of CO2e would be emitted per year*.

R22 and many other HCFCs are being phased out internationally due to their deleterious effects. However, their replacements, HFCs, are still very harmful. R32, for example, has a GWP of 677, meaning that a small air conditioner using this refrigerant would emit 31kg of CO2e per year. This may not sound like a lot, but estimates suggest there are over one billion small air conditioners in the world. Even using the most environmentally friendly refrigerants, that would still equate to 31 million tonnes of CO2e per year from just these small units alone!

The issue, of course, is not limited to small air conditioning units. Vehicle air conditioners, heat pumps, transport refrigeration, household fridges, and freezers all use (and leak) harmful refrigerant emissions. The electrical power required to fuel this equipment also takes a massive toll on our environment, which is only set to increase as more and more people turn to domestic air-conditioning.

The solution to all this is to avoid using air-conditioning. It’s pretty obvious, but frustratingly hard to accept if you’re used to a climate-controlled life. Unfortunately, the battle against climate change is often one of sacrifices such as this. However, with the help of fans, added greenery, better insulation, and increased airflow, you can make life without air-conditioning a little easier. If you’re not prepared to forgo air-conditioning entirely, consider upgrading your unit to a newer and more efficient model, which utilises HFCs such as R32.

 

*figure calculated using the following formula and assuming a charge capacity of 1.55kg and leakage rate of 3.0%: kgCO2e= number of units x charge capacity (kg) x times used (years) x leak rate (%) x GWP

 

 

At ESI Monitor, we regularly support clients in finding the best ways they can reduce their footprint on the world around them. Clearly, this is the responsible thing to do – by reducing our carbon emissions, our waste or our resource consumption, we reduce our impact on the planet, its biodiversity and its people. But this approach also allows companies to measure and manage their exposure to these ESG (environmental, social and governance) factors, such as finding out how heavily they rely on scarce critical resources.

One critical resource is water, a precious substance vital for life and many parts of the economy. Only a small proportion of water on Earth is freely available. Most of the water on our planet is very salty seawater, leaving only 3% as freshwater – and of this, nearly 80% is bound up in ice in glaciers and the polar ice caps. Most of the rest is in groundwater, some of which is available to people through wells and boreholes, but not all. And only 1% is surface freshwater in rivers, lakes and soil.

 

This limited resource has to go around nearly eight billion humans, as well the millions of other species on the planet who need water as well. The direct human usage for drinking, washing and other household activities is around 150 litres per day in countries such as the UK, but consumers also rely on a significant amount of indirect water that is used while making the products they consume.

This indirect water demand can be significant. For example, producing each kilogram of beef requires the consumption of over 15,000 litres of water throughout the supply chain, both in watering cattle and producing their feed. In a similar way, the series of production steps means a kilo of cheese or nuts can require over 100,000 litres of water. This kind of embodied water impact brings the total water footprint of a UK consumer up to over 4,000 litres per day.

 

What is the effect of global water scarcity?

This is a significant issue because, globally, much of the world suffers from water scarcity. Today, two-thirds of the global population (4.0 billion people) live under conditions of severe water scarcity for at least 1 month of the year, while half a billion people face severe water scarcity all year round. These issues are particularly acute in certain countries, with 180 million people living under constant severe water scarcity in India, 73 million in Pakistan, and millions more across Africa, Central America and the Middle East.

Many contemporary business models are founded on the continuing availability of cheap water at production locations around the world. Yet the regions which currently provide countries such as the UK with food, textiles, minerals and other materials are under increasing water stress, with £1.8Bn of the UK’s crop-based annual food imports having a ‘high’ water risk. In fact, 70% of the UK’s overall water footprint is overseas, because of this concentration of imports from water-scarce areas.

 

How will climate change affect water?

When climate change is considered the situation is likely to become even more difficult in the future. Under possible scenarios explored by the CMIP5 project, the high latitudes and the Equator are forecast to become wetter and the mid-latitudes will become drier. Many areas that are already dry and water stressed – such as the Mediterranean, parts of the Middle East and Central Asia and the Americas – are forecast to be worst affected, with precipitations reductions of greater than 20% under the RCP 8.5 scenario.

Furthermore, climate change may also interrupt or exacerbate seasonal variability, disruption the seasonal monsoons that much of the world depends on. It could also increase the occurrence of extreme weather events such as droughts and storms.

 

What can be done to measure water risk?

The first step in managing water-related impacts and exposure is measuring the water footprint of a product or an organisation. A water footprint is the fresh water ‘used’ to produce a product, summed over the entirity of its production chain. Water use occurs whenever water is evaporated, embodied into a product, polluted, lost to another area or otherwise made unavailable for other local, timely usage. It includes both indirect components and direct components – in other words, water usage of upstream, supply-chain operations as well as usage that the organisation’s operation is directly responsible for.

The diagram below is reproduced from the Water Footprint Assessment Manual, 2011, and shows how direct and indirect water footprints are added up over the course of a product’s production until they reach the end consumer.

Footprints can also be calculated at the organisational level, by taking account of the products the organisation produces and the entirety of its direct and indirect usage.

 

Water and climate risk disclosure

Organisations increasingly disclose non-financial information, either because it is mandatory or because they simply know that it is a good thing to do. Increased disclosure and transparency is generally received positively by customers, investors or other parties, who want to know that organisations are conscious of their impact on the world as well as their vulnerability to climate change.

Without knowing how much water an organisation uses (both directly or indirectly), it is difficult to assess how exposed it would be to possible future changes such as:

While current disclosure frameworks such as TCFD (Taskforce for Climate-related Financial Disclosure) may seem to be a separate subject from water risk, the two topics are fundamentally linked. Water is actually mentioned 23 times in the TCFD recommendations report, including specifically as a source of climate change risk alongside energy, waste and land use and as a focus for target setting.

 

How can ESI Monitor help?

Water risk is a key component of any disclosure following TCFD principles, particularly for organisations that have operations, supply chains or investments in water-dependent sectors such as agriculture, energy and textiles. It can be a complex area to navigate, with potential for environmental, social and geo-political impacts to act together across a range of spatial and temporal scales.

ESI Monitor can assist organisations who wish to measure and reduce their water footprint, whether because of their risk exposure or desire to reduce impact. We can carry out a high-level screening exercise to identify areas of possible impact and exposure, provide a more comprehensive footprinting study including the wider supply chain, or support TCFD scenario analysis into the implications of climate change. Our consultants and associate consultants have extensive experience in supporting companies to assess and manage the environmental and social impacts and exposure of their operations, supply-chains and investments.

References:

Mekonnen, M.M. and Hoekstra, A.Y., 2016. Four billion people facing severe water scarcity. Science advances, 2(2), p.e1500323.

Poore, J. and Nemecek, T., 2018. Reducing food’s environmental impacts through producers and consumers. Science, 360(6392), pp.987-992.

Hoekstra, A.Y. and Mekonnen, M.M., 2016. Imported water risk: the case of the UK. Environmental Research Letters, 11(5), p.055002.

Hoekstra, A. Y.; Chapagain, A. K.; Aldaya, M. M.; Mekonnen, M. M. The Water Footprint Assessment Manual; 2011; ISBN 9781849712798

 

 

Since December 2019, our world has changed dramatically. In light of a shared enemy, governments, businesses, schools, communities, and individuals put their self-interests aside to follow directions from the planet’s leading experts. When the experts told us to isolate, we listened. When the experts told businesses to send employees home, they listened. When the experts told governments to close the boarders, they listened. So why, when the experts tell us to make substantial changes in light of climate change, do we fail to listen?

While we celebrate our wins against coronavirus, we must not forget that humanity faces another crisis, one for which there is no vaccine. There is no quick fix or easy solution for climate change, but many of the lessons we learnt during this pandemic can help us with the fight against it. We must listen to the experts, work together, and make sacrifices, in order to measure, manage, and mitigate global warming.

Without measuring, we live in ignorance and denial of what surrounds us. If we didn’t test and measure coronavirus cases, we could not have managed and mitigated the effects of the pandemic. The same rules apply for climate change.

To prevent the certainty of mass extinction and environmental devastation that will result from more than 2oC of global warming, we must measure our greenhouse gas emissions. Only then can we understand the damaging gasses that we produce, and in turn manage, minimise, and mitigate our effect on the climate.

At ESI Monitor, it is our mission to support you to understand the full extent of your carbon footprint, and help you to eliminate it. We cannot change the past, but we can build a better future, together.

Achieving sustainability is much like effective pandemic prevention; it is a global effort. It requires healthy ecosystems; a greater respect for animals and the environment; and regular measurement, management, and adaptation from all. With our Environmental Business Operations Framework, we make this easy and valuable to you. The framework is broken down into 5 modules that are each designed to build the most important foundations that enable your organisation to transition towards environmental sustainability.

The first module of the Framework enables you to measure your carbon footprint in accordance with the Greenhouse Gas Protocol (the internationally recognised standard for carbon footprints), and ISO 14064. This is also where you create your ‘green team’ of staff that will act as your champions for each specific area of measurement.

The second module walks you through creating a sustainability statement and commitments to the best international goals of your choice (from the SDGs, to the Paris Agreement, CDP, and TCFD).

In the third module, we support you in creating an action plan to begin your organisation’s adaption to environmentally sustainable practices in waste, energy, travel, value chain, education, and offsetting. This is supported by our resource library and our expertise in the field of environmental management.

The fourth module is then another footprint measurement designed to show the impact of the implementation of your action plans in module 3.

And finally, module 5 is built to help keep sustainability on the agenda by creating a space to track actions and implementation, facilitate the organisation of the green team, and commitments to regular measurement and management of your environmental footprint.

 

You can learn more about of Environmental Business Operations Framework by clicking here, or using the contact details below:

Mobile: +44 (0) 1481 730669
Email: [email protected]

 

 

Many organisations have been making great progress measuring their carbon footprints (using tools and methodologies like ESI Monitor’s Environmental Business Operations Framework – EBOF). Some have also been disclosing those footprints in their annual reports, sustainability plans, or well-known disclosure platforms like CDP, PRI or GRI. The organisations that are furthest forward are even looking at emissions in their supply chains – the so-called ‘embodied’ carbon that makes up part of Scope 3 emissions in the Greenhouse Gas Protocol. However, this raw data doesn’t tell organisations whether and how climate change as a whole is going to cause problems to their business. For this, a climate change risk assessment is needed.

 

What is a climate change risk assessment

A climate change risk assessment identifies mechanisms by which climate change represents a threat to a business’s ongoing sustainability and evaluates how serious the threat is, whether quantitatively or qualitatively. For some organisations the threats are clear. If you have an office next to the sea threatened by rising sea levels, or run an enterprise growing crops in an area where rainfall is reducing every year, you will be starkly aware of the need to cut emissions and also make changes to adapt and increase your resilience. However, many businesses have not yet made these links or formally assessed the risks.

 

Hazards, exposure, vulnerability?

There are some important terms used in discussions around climate change risk. Risk itself is usually understood to be a combination of both magnitude (how serious something is) and probability (how likely it is). However, the following definitions are also important in identifying and evaluating risks.

A hazard is the physical event itself, caused or made more likely by climate change. Some hazards are chronic, meaning that they appear slowly and over many years or decades, such as sea level rise where projections from the IPPC show levels likely rising between 45-82cm by 2100. Other physical climate change hazards include extreme weather events such as floods, storms, hail or drought, which may all become more likely in particular parts of the world under increased global temperatures.

The risk exposure is whether a particular asset is at all likely to be affected by a hazard. The most obvious example is in the spatial dimension of climate change, where certain hazards are likely to arise only in certain regions. Business sited only inland, for example, are unlikely to be exposed to sea level rise (although their supply chains may well be).

The vulnerability is an expression of an asset or person’s propensity to suffer harm when exposed to a hazard. This may be due to susceptibility or sensitivity to change; a lack of resilience to withstand hazards in the short term (or to return to a stable state once disturbed); or a lack of adaptability to hazards in the longer term.

The combination of a hazard, together with exposure of a vulnerable asset to that hazard, results in a risk.
A climate change risk assessment may not be focussed on your own internal operations. Even if your offices, employees and equipment are safe from immediate hazards such as sea level risk, flooding or storms, what about the assets and operations of your suppliers or customers?

 

How can ESI Monitor help with climate change risk assessments?

At ESI Monitor, we can provide a range of targeted services to help organisations, whether they are starting out on their journey of climate change risk assessment or already well on their way.
For those just starting out, our five-module Framework provides a simple introduction to environmental footprinting. This will help identify sources of greenhouse gas emissions from your operations, with measurement carried out in accordance with the Greenhouse Gas Protocol and ISO 14064-1.

If your organisation already has a clear understanding of its footprint, or wants to immediately carry out a climate change risk assessment, we can also help. The next steps are:

Some parts of this process are standardised (such as selecting future climate scenarios) and others will need to be tailored to your organisation, so we can carry out a quick initial screening to help scope these bespoke elements. If our initial screening identifies that there are likely to be specific risks imposed by climate change on your organisation, we can reach out to our network of specialist consultants to address aspects such as water stress, human rights and geopolitical risks.

 

Other considerations during a climate change risk assessment

The purpose of a risk assessment is an important aspect to consider before starting. If it is only for internal purposes then your approach can be very flexible, but if you want to be able to use your risk assessment to inform external parties, such as investors, you will want to align with disclosure principles, such as the Financial Stability Board’s Taskforce for Climate-related Financial Disclosure (TCFD). This is a set of principles to ensure that everything investors and regulators need to know is considered, and is increasingly the de facto standard for climate change risk assessment, climate scenario analysis and disclosure. ESI Monitor’s team are highly familiar with the TCFD recommendations and can help businesses align their risk assessment and disclosure with them.

There is another tricky topic to be considered as well – ‘transition’ risk, which is the ongoing risk to an organisation of losing value due to changes in the economy or regulation as the world transitions away from fossil fuels and towards more sustainable business models. It’s particularly relevant to organisations whose business today depends on a plentiful supply of cheap coal, oil or gas, and who don’t have a clear plan for converting to low-carbon operations. We’ll cover transition risk in another article soon.

 

References
Cardona et al, 2012. Determinants of risk: exposure and vulnerability. In: Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation, A Special Report of Working Groups I and II of the Intergovernmental Panel on Climate Change (IPCC) – https://www.ipcc.ch/site/assets/uploads/2018/03/SREX-Chap2_FINAL-1.pdf
Field et al, 2014. Summary for policymakers. In Climate change 2014: impacts, adaptation, and vulnerability. Part A: global and sectoral aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC)