4.1.1
Greenhouse gas measurement and reporting
In order to understand the nature and scale of carbon reductions required, it is vital that retailers are first able to measure and report on greenhouse gas emissions across their value chain. This allows for prioritisation of key emissions hotspots, the creation of ambitious yet realistic targets and commitments, and identification of potential mitigation actions. Even small retailers can benefit from basic footprinting exercises. Tracking emissions data can help SMEs identify cost saving areas and better attract customers who prefer to shop sustainably.[14]
Quoted companies in the UK must already report their scope 1 and 2 greenhouse gas emissions and associated energy use, in compliance with BEIS Streamlined Energy and Carbon Reporting (SECR) requirements. Similarly, large unquoted companies or LLPs[15] must report energy use from electricity, gas and transport fuel. For quoted companies and large unquoted companies/LLPs consuming >40 MWh of energy over the reporting period, there are additional reporting requirements of intensity ratios, previous years’ figures, energy efficiency action taken, and accounting methodologies used. For unquoted companies not considered large by the above definition, reporting is voluntary but encouraged.
The figure below illustrates current SECR reporting requirements:
Figure 4.1b: SECR Guidelines
Scope 3 emissions reporting is currently voluntary for all UK companies under SECR guidelines – however, as highlighted in Section 3, these generally make up the majority of retailers’ total emissions and so it is recommended that these should be included in retailers’ greenhouse gas assessments.
Currently, many retailers and FMCG brands do already measure their scope 3 emissions, but there is limited standardisation or alignment on scopes and boundaries. For example, some retailers measure emissions from “cradle-to-retail” only, while others include direct emissions from product energy use and end-of-life disposal, as well as indirect emissions from product use (e.g. emissions from water heating of a shower where a retailer’s bodywash is used).
One of the requests from many retailers is for a holistic, cohesive approach to greenhouse gas measurement and reporting that provides a ‘level playing field’ for the critical but complex issue of climate change performance, particularly in relation to the complexity of scope 3. While there is a range of well-established existing frameworks (see text box below), more work is needed to support the industry to adopt and report on a consistent basis.
Key reporting frameworks
For Organisations:
- GHG Protocol Corporate Standard - A Corporate Accounting and Reporting Standard from the GHG Protocol Initiative
- CDP – A global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts
For Products:
- Publicly Available Specification (PAS) 2050 – A Publicly Available Specification prepared by BSI, Carbon Trust and DEFRA to specify requirements for assessing the life cycle greenhouse gas emissions of goods and services.
- GHG Protocol Product Standard - A Product Lifecycle Accounting and Reporting Standard from the GHG Protocol Initiative
- ISO 14067 Carbon Footprint of Products – Requirements and guidelines for the quantification of product greenhouse gas emissions, from the International Standards Organisation
These are largely aligned in terms of methodology and boundaries, although some minor differences do exist, for example in terms of materiality (exclusion of smaller emissions sources) and allocation hierarchies.
In order to meet net zero commitments, in the short term individual retailers should undertake full value chain greenhouse gas assessments, ideally including public reporting to provide transparency, increase general understanding, and contribute to collective efforts around the decarbonisation of retail. Secondly, the industry needs support on good practice to make such assessments efficient and the results meaningful and informative – and this is a role the BRC will step up to support.
[14] See carbon footprinting tools from Defra and the Carbon Trust for further information.
[15] ‘Large’ implies meeting two or more of the three criteria of >£36m turnover, >£18m balance sheet, >250 employees