I’ve been invited to comment on a recent article by Hunter Richards of Software Advice on greenwash. The article calls for an improvement to environmental accounting infrastructure through software, so that consumers can have greater confidence in claims of carbon neutrality.  Financial accounting methods, standards, auditing procedures and tools are well developed, but not so with carbon accounting. By way of example Richards highlights how a well known company that stated it was carbon neutral hadn’t accounted for its scope 3 emissions.

Scope 3 emission are “indirect” emissions that are embodied in products and services that a company may use. For example scope 3 emissions for a drinks manufacturer would be the carbon emission embodied in the aluminium the drinks company makes its cans out of. However the Greenhouse Gas Protocol, the major global carbon accounting standard in use, hasn’t yet prescribed inclusion of scope 3 emissions in carbon accounting practices

Scope 3 emissions are challenging to measure, and ultimately can only be accurately tracked if every product is labelled with its embodied carbon emissions. Financial accounting practices rely on everything having a price. For example, the sale price of a car is comprised of the cost of everything that goes into making the car, down to the wheel nuts. The price of the wheel nuts in turn depends on the price of the steel used to make the nuts, and the amortised cost of the tooling used to make the nuts. The price of the steel depends on the ingredients in the steel, for example its molybdemum  content, amongst others. The price of molybdemum depends on the cost of energy and labour and amortised machinery used to mine it, process it and transport it. The amortised price of mining machinery depends on many factors as well. Ultimately there are probably well over a million prices that come together to make up the price of a car. In the same way complete carbon accounting also relies on every product or service having emissions associated with it accounted for.

This is complex to do. Daniel Goleman’s book Ecological Intelligence gives the example of glass, which typically has over one hundred ingredients in it in addition to sand. To provide thorough scope 3 carbon accounting requires being able to identify the emissions arising from each ingredient. Thorough scope 3 accounting for something like a computer or a mobile phone is thus very hard to do if the embodied emissions of each constituent part is not known. In the absences of mandated carbon labelling for all products and services, voluntary carbon reporting of scope 3 emissions is very challenging.

This is where emissions databases, and associated software, are useful. “Generic” emission factors could be developed for a particular type and size of product or service, in the absence of actual numbers, and applied when estimating scope 3 emissions. Global sharing of this information via on-line databases could make scope 3 carbon accounting much easier. However generic emission factors will only ever be rough approximations. Ultimately if accuracy is the aim everything in the economy needs to be labelled with its carbon emissions.

Standards, auditing standards, certification schemes and clear rules are needed for accurate carbon accounting. In the absence of complete carbon labelling of everything there needs to be transparency around methodologies and recognition that scope 3 carbon accounts will at best be estimates with a long list of assumptions behind them.

Linfox is well known for the “You are passing another Fox” sign on the back of its vehicles. But the company has also cut its greenhouse gas emissions by 9% in the last eighteen months, and is on track to cut its emissions by 15% by December 2010.

I had the privilege of interviewing David McInnes, Group Manager Environment and Climate Change yesterday and being inspired about Linfox’s approach to the climate change challenge. It was refreshing not to hear the Carbon Pollution Reduction Scheme mentioned once in the interview. Linfox is reducing its carbon emissions because it wants to, not because its being forced to, and is quietly getting on with it.

So how does a organisation with 15,000 staff, whose carbon emissions mostly come from diesel consumed in trucks, reduce its per km emission by 9% in eighteen months? You can find the interview on our “Good News Interviews” page.

For me a couple of the standouts from the interview were:

• Their staff engagement program. Almost all of their savings have come about by making better use of what they already have, rather than investing in new technology. This has been achieved by getting their staff involved in changing the way things are done and in how trucks and buildings are operated, and making hundreds of small changes.
• Their carbon accounting system – developed in-house. Linfox programmers set up their SAP system such that now monthly carbon reports can be generated, down to the level of individual trucks if necessary. A consistent theme of all organisations cutting their carbon footprints is their focus on accurately and frequently tracking their emissions
• David’s recommendation to any organisation wishing to cut their carbon footprint to undertake an energy audit, which provides the business case for action. Thanks for the plug for my profession David!

After the interview we discussed Linfox’s Greenfox program, and I wish I had left the voice recorder on. This is a fantastic program. Staff can become a Greenfox by passing five training modules. Everyone who completes the training gets a framed certificate, and drivers who complete the training get a Greenfox badge on the shoulder of their uniform. David mentioned that Greenfox’s often become ambassadors, with truck drivers going to their kid’s schools and talking about climate change.

Also not covered in the interview was the great help David got from Linfox’s IT department in modifying SAP. Normally there is a long queue in the organisation for projects requiring SAP changes. The carbon accounting adjustments though were undertaken by the SAP programmers on top of their normal requirements, such was their commitmen to the company reducing its carbon footprint.

Finally David also spoke off the record about the need to focus less on the science and more on the community and the emotional response that when sparked can result in great change.

As one of Australia’s larger businesses Linfox is taking a leadership role by getting on with reducing its corporate carbon footprint. David McInnes is providing inspirational leadership. Take half an hour to listen to David McInnes and I guarantee you’ll come away motivated and hopeful about what is possible if we focus on cutting carbon emission.