The Complexities of Navigating Sustainability

Complexities Navigating Sustainability

The concept is simple; to make informed choices about the companies we support with our hard-earned cash.

We need to be provided with clear, coherent information on the sustainability of the company’s activities to take control of our individual carbon footprints.

Sustainability reporting is a far cry from the futile extra paperwork it was once perceived to be. The demand is growing for a consistent and comparable method of reporting not just from consumers, but also investors, central banks and regulators is increasingly being recognised.

Current Sustainability Reporting

Despite the demand for sustainability reporting, issues remain with the lack of transparency and continuity in reporting methods.

Sustainability reports are often hundreds of pages long. They have differing benchmarks against which sustainable improvements are measured, alternate priorities, confusing terminology and an overall lack of comparability.

Sustainability reporting also remains a largely voluntary practice.

Taking these factors into account, it is quickly apparent how susceptible sustainability reporting is to become a practice of greenwashing.

Without standardized frameworks, companies can pick and choose what they wish to highlight, against standards that they define, which cannot easily be compared to a rival company’s report.

In response to increased pressure to undertake sustainability reporting, many companies now produce a report. However, many are in line, for example, with the long and exhaustive framework given of the ‘Global Reporting Initiative Integrated with the Sustainable Development Goals’.

After this, they often produce a cherry-picked, easy-to-read version for consumers. Containing only the most appealing and impressive aspects of the full report.

Confusing Sustainability Reporting

The Increasing Calls for Mandatory Sustainability Reporting

In September 2020 five of the largest reporting organisations, the Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), International Integrated Reporting Council (IIRC), CDP and Carbon Disclosure Standards Board (CDSB) united to publish the ‘Statement of Intent to Work Together Towards Comprehensive Corporate Reporting’. This outlined the collaborative vision of the companies: a comprehensive corporate reporting system, that includes sustainability and social responsibility reporting against defined frameworks.

The GRI has continued to push the initiative, issuing a further call in December 2020 for standardized sustainability reporting for companies, stating:

“…for sustainability reporting to truly contribute to better decision-making, sustainability reporting should become mandatory. Currently it is by and large a voluntary practice. The lack of mandatory reporting affects the consistency, comparability, transparency and overall quality of disclosures, even in light of sincere best efforts that reporting organizations may make. The challenge ahead for sustainability reporting is to reach the same level of consistency that the International Financial Reporting Standards (IFRS) has achieved for financial reporting in almost all jurisdictions around the world.”

In October 2020 the U.K-based IFRS also issued a consultation paper on sustainability reporting. In it they call for a new Sustainability Standards Board to develop global sustainability standards, with the objective of of developing and maintaining a global set of sustainability-reporting standards.

There is clear and growing momentum behind the move.

The Problem with the Call for an IFRS-Based Sustainability Report

A big issue remains for us. How many IFRS reports have you read recently?

Whilst a mandatory, uniform framework for corporate reporting of sustainability remains vital, it’s unlikely to be a user-friendly, comprehensible publication for the average consumer.

Without easily understandable indications of the sustainability of a company’s product or service, a barrier will remain for consumers trying to buy responsibly.

We believe that sustainability measures such as the carbon emissions and water waste of a product should be as simple as a nutrition label. A consumer should be able to assess, at a glance, the impact of a new bag or even manicure treatment on the environment. To take responsibility for our own impact on the planet, we need to be provided with the tools to do so.

Sustainability Certifications and Accreditations

One method currently utilized is certifications and accreditations on product packaging and company websites. For example, the B-Corp certification, the Carbon Neutral certification and Forest Stewardship Council (FSC) labelling.

The B Corp Certification

B Corp Labs – the awardees of the B Corp certification – takes a rounded approach to assessing a business’ practise. They evaluate how a company’s operations and business model impact their workers, community, environment and customers.

However, to understand the details of a B-Corp certified company’s practise, you would still be required to trail through the entire report, or otherwise take B Corp Labs at their word that the business meets high standards of sustainability and social responsibility; a lack of simple transparency remains.

Different Parts of Sustainability

Carbon Trust’s Carbon-Neutral Certification

A carbon-neutral certification awarded by the Carbon Trust indicates that a company’s total emissions are offset via a combination of reduced energy use, increased energy efficiency and a switch to renewable sources, and carbon credits – generated by contribution to greenhouse gas mitigation projects such as tree planting or solar energy installations.

However, the actual impacts of carbon offsetting activities vary widely and are thereby difficult and imprecise to quantify, making accreditation of ‘carbon neutral’ a somewhat shaky assurance.

Carbon offset activities are also a short-term fix to the long-term issue; the need to reduce the carbon we are emitting and not simply offset it (find a great explanation of this here).

FSC Certifications

FSC labelling comes in three forms – 100%, MIX and Recycled. For every FSC label, all companies involved in the supply chain must carry an FSC Chain of Custody Certification.

100% indicates that materials are sourced from forests that have been audited and found to comply with FSC’s social and environmental standards.

MIX indicates that materials are sourced from a combination of FSC-certified forests, recycled materials and/or FSC-controlled wood (NB: this wood is not from FSC-certified forests, however, FSC states that ‘…its use mitigates the risk of material originating from unacceptable sources’).

Recycled – as the name suggests – indicates that the product is 100% produced from recycled content.

However, even in these certifications, a lack of transparency remains. We must again place a degree of trust in FSC’s social and environmental standards.

FSC has also been the subject of heavy criticism following studies that indicate its sustainability standards have little effect on halting tropical deforestation, and indications of greenwashing illegal logging operations in China, Romania and Peru – although this is strongly denied by the FSC.

A Different Approach to Measuring Sustainability

These accreditations are undoubtedly a step in the right direction, and certainly offer an indication of the more sustainable choice. But for true transparency, a simple system is needed, whereby we – as consumers – are equipped with the information we need in a digestible form, for us to take responsibility for our carbon footprint. And smart companies are pursuing this aim in the carbon emission sphere.

Carbon Calories’ Statements

Carbon Calories is an initiative pushing for greater transparency in the carbon emissions ecosystem, to allow individual agency among consumers in taking responsibility for their carbon footprint.

The initiative aggregates data from corporate and public sources such as WikiCarbon to produce Carbon Statements for products.

The Carbon Statements give a simplified breakdown of the carbon emissions throughout the product’s life – from production to disposal – allowing the consumer to easily track the carbon footprint of that product. It even includes the variation in carbon emissions regarding your use of the product – e.g. choosing to dry your t-shirt on a clothesline as opposed to in the tumble dryer.

Carbon Calories have also produced a global Carbon Budget and Daily Carbon Quota . If this quota is followed by the global population, it would allow a 55% reduction of greenhouses gas emission by 2030 and aim to limit global warming to 1.5°C, in line with targets set out by the UN Environmental Programme (UNEP).

Laying out the necessary information in such a practical manner for consumers could be a truly ground-breaking development in empowering us all to monitor and manage our day-to-day carbon footprint, whilst also giving us the tools to ensure it is in line with targets set by UNEP.

Carbon Emissions from Production

Carbon Cloud’s Labelling

CarbonCloud is a similar smart platform currently enhancing carbon transparency in food production.

The platform utilises a calculation model 20 years in the making to quickly and accurately calculate kg of CO2e per kg of product (kg of CO2e is a standard way to combine emissions of different greenhouse gases into a single climate footprint number, read more about that here).

The calculation indicates the amount and percentage of total product CO2e at each stage of production, from agriculture and refinement to packaging and transport.

A Carbon Cloud measure, firstly, allows companies to highlight to their customers the carbon emissions of their products. Secondly, it identifies the key areas in which they can reduce the carbon footprint of the food they produce.

Carbon Cloud display a ‘kg of CO2e per kg’ label on the product. This simply and effectively allows the consumer to assess the carbon impact. Their labels already appear on OATLY! plant-based dairy products available in most UK supermarkets.

CarbonCloud have also freely released carbon footprint calculations for produce including: grains, vegetables and beans, fruits, nuts and oil crops. All from applicable countries and available on their Climate Hub for consumer benefit. Just type in ‘Potato United Kingdom’ on their Climate Hub and find out how many grams of CO2e came from the jacket you had for lunch!

Ideally, this type of transparent environmental impact labelling will become mandatory. It will allow you to make simple, smart choices to reduce your impact on the planet the same way it is now possible to consume a healthy diet with the introduction of nutrition labelling. We would love to see a global move toward this; our voices are certainly behind it!

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