Carbon Accounting – The New Frontier
Back in the early 1990’s at BT we started by measuring and reducing our absolute carbon footprint and energy usage. In financial terms this parallels assessing the total cost base of the operations of the company. As we improved our understanding of our carbon cost base, we have been able to break it down into its components such as travel, network, datacenters etc etc. Just like a company can break its cost base into different components of its operations.
A few years ago, we made our analysis of our carbon cost more sophisticated, by assessing it on a per unit basis. Just like in the financial world, this didn’t replace our existing measures. Rather, it enhanced our understanding, and allowed us to set reduction targets within a meaningful framework – our climate stabilisation intensity target.
Recently we added more to our understanding in two ways:
- In 2012, we undertook a project with the Carbon Trust, the Carbon Disclosure Project and Small World Consulting, to measure and report the carbon emissions from our supply chain. This is a parallel to knowing how much money we have spent with our vendors.
- We have been at the forefront of assessing the carbon footprint of individual ICT products – product carbon foot-printing. When I was a product manager, knowing the costs of running the company was of limited use to me. To make good decisions, I needed to know the costs attributable to my products. For the same reasons, we need to find ways to assess the carbon footprint of a product; not an easy feat in a business where the core assets, network and people are a shared resource.
Relative to financial accounting, we are still in the early days of the field of carbon accounting. But the parallels are unmistakable. Just like financials, a new measure does not replace the old, it enhances our understanding of it and of how to take action to improve.
At BT we are trying to take an active role in the development of new models and methodologies. Internally, the results of the different approaches do not always reconcile, but we learn a lot from resolving those differences. We also see great value in being able to compare across companies using standard approaches. In this post BT’s Gabrielle Ginér describes the significant efforts being taken to helping develop international standards.
I relish being at the vanguard of a new frontier and I know the people I am working with inside BT and at our partners feel the same way. We hope this investment, and the models we develop, will help move the field forward and contribute towards solving the problem of climate change.
The focus I have described so far is on carbon cost. The next question we are asking is what about revenue? What is the carbon equivalent of revenue? Watch this space!