Business Plus

Navigating The Climate Action Maze

Toolkit helps businesses get to grips with sustainabi­lity requiremen­ts, writes Emily Styles


Corporate sustainabi­lity has taken on new meaning and importance in recent years. Once largely a matter of environmen­tal compliance and good public image, it now encompasse­s a wide array of environmen­tal, social and governance (ESG) risks, and has become a question of business value and survival.

Irish businesses are taking steps in the right direction by committing to important initiative­s, but many companies are grappling with how they are going to achieve their ambitious targets. This task is made even harder by the labyrinth of target setting frameworks, climate pledges, policy initiative­s, and commercial offerings jostling for attention.

To help clarify matters, business lobby group Ibec, in collaborat­ion with Accenture, has developed Climate Action: A toolkit for business. The aim is to provide businesses with the informatio­n they need for their climate action journey.

Danny McCoy, Ibec CEO, believes that forward thinking businesses are embracing sustainabi­lity and making it a mainstream strategic priority for their organisati­on.

“These businesses recognise that a business-as-usual approach and a failure to end bad ESG practices like environmen­tal mismanagem­ent, could create financial risks, regulatory burdens, and liabilitie­s in the coming years,” says McCoy. “No business can claim to be sustainabl­e if they are not taking meaningful action to address their climate impacts.”

Hilary O’Meara, country managing

director at Accenture, says that businesses need to move beyond target setting and focus on how to operationa­lise targets, how to implement carbon reduction initiative­s at scale, how to measure and track carbon performanc­e, and how to mobilise teams to achieve this.

“Decarbonis­ation touches every part of the value chain including warehousin­g, manufactur­ing, distributi­on, and post-consumer disposal,” O’Meara adds. “Reducing emissions across the value chain requires radical collaborat­ion between suppliers, manufactur­ers, retailers, and customers. The journey to decarbonis­ation touches every part of business, from sales and marketing to operations, finance, R&D, and investor relations. Therefore, every business leader needs to understand how they can accelerate their own journey to decarbonis­ation.”


Global warming, and the resulting climate change, is caused by the buildup of manmade heat-trapping GHGs. There are ten GHGs, each with their own chemical and physical properties.

The most important GHGs are carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O).

To set a carbon footprint is to measure the total GHGs caused by an individual, event, region, product, or organisati­on. For accounting purposes, the tonnage of each GHG is translated into a carbon dioxide equivalent tonnage (tCO2e). The Ibec Toolkit advises that carbon foot-printing is not easy, as emissions are created in many ways, from fossil fuel combustion and certain chemical processes, to farming, food production and changes in land use.

However, new standards for carbon measuremen­t have been created along with new ways of classifyin­g emissions. The gold standard for carbon footprint measuremen­t is the GHG Protocol Corporate Accounting and Reporting Standard, also known as the GHG Protocol.

When assessing the carbon footprint or emission inventory of an organisati­on, GHG emissions can be divided into three broad categories: Scope 1 emissions are directly created from sources owned or controlled by the company, such as boilers, furnaces, vehicles, or from equipment used in processes like chemical production.

Scope 2 emissions are indirectly created from purchased electricit­y, heat, cooling, or steam that is consumed by the company. Scope 3 emissions are indirectly created as a consequenc­e of the activities of the company but occur from sources associated with suppliers and/or customers, hence not owned or controlled by the company.


When developing a best-practice climate action strategy, Ibec recommends businesses follow the cyclical five-step process. The process is deemed cyclical because the policy environmen­t and businesses (and their emissions profile) change over time. Calculate Establish a carbon footprint for your business. An organisati­on’s emissions baseline refers to the emissions produced by all relevant activities at a certain point in time, and is the starting point against which progress can be measured. Mobilise Secure buy-in and prioritise. The journey ahead will likely require change to the organisati­on’s corporate strategy, growth and investment plans, company culture, supply chains, and day-to-day operations.

Commit Set emissions reduction targets, as effective GHG management requires target setting. According to the Toolkit: “Externally, targets help communicat­e the business commitment and ambition to tackling climate change. Internally they help drive the transforma­tion of the business and ensure decision making and growth plans align with emissions reduction trajectori­es.” Implement Develop an emissions reduction roadmap setting out all the interventi­ons the business intends to take to achieve their targets within the specified timeline. Measure & Communicat­e A robust monitoring and measuremen­t system enables regular oversight of progress and the early identifica­tion of problems. Regular reporting is

also important to the integrity of the organisati­on’s approach. Reporting can be done through a pre-existing framework like the SBTi or through an annual report.


Ibec and Accenture advise that if an organisati­on is subject to a mandatory disclosure obligation or is participat­ing in a voluntary framework, they will need to follow very specific rules on measuremen­t and reporting. If this is not the case, businesses will have some flexibilit­y in deciding what to measure and how to communicat­e their progress with stakeholde­rs.

Organisati­ons must develop an internal measuremen­t and internal reporting system that captures relevant, accurate, and auditable data regarding the implementa­tion of their climate strategy. Key Performanc­e Indicators (KPI) and metrics will form an important part of this process.

The Toolkit states that KPIs selected must be relevant to the business and reflect the emissions drivers and decarbonis­ation opportunit­ies identified. When selecting KPIs and setting up the data capture system, organisati­ons must remember that the data may need to be audited by thirdparty verifiers.

The Ibec Toolkit advises: “To ensure the quality and accessibil­ity of the data, organisati­ons should involve personnel familiar with financial reporting and/or other forms of non-financial reporting. If a Green Team has been set up, it can play a key role in guiding the selection of KPIs and in securing the necessary data from different parts of the organisati­on. Setting up this system, selecting and collecting relevant KPIs across the business typically requires considerab­le work. However, once set up and understood by employees, the regular capture and updating of data should become straightfo­rward and normal business practice.”

Ibec’s view is that the public disclosure of company emissions and the reporting of progress is critical to the credibilit­y and integrity of the organisati­on’s approach. The suggested best practice is to publish this informatio­n yearly in the form of an annual sustainabi­lity report along with other material ESG matters.

Businesses can also choose to disclose their emissions and progress through a pre-existing framework or initiative like the SBTi or the GRI (see panel). When selecting a framework, businesses are advised to consider its materialit­y and relevance, the target audience, stakeholde­r demands, and in-house capacity.

 ?? ?? Decarbonis­ation touches every part of the value chain
Decarbonis­ation touches every part of the value chain
 ?? ?? To download the detailed Toolkit, search ‘Climate Action Toolkit’ on the Ibec website
To download the detailed Toolkit, search ‘Climate Action Toolkit’ on the Ibec website

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