Recent changes in greenhouse gas emissions reporting enable large electricity consumers to apply market forces, compelling electricity providers to shift towards renewables. Many of our clients are knowledge-based companies. For these companies, electricity is not a material source of emissions – business air-travel is.
In this post, we look at how similar changes in air-travel emissions reporting can enable knowledge-based companies to drive meaningful change. We conclude with a challenge to all airline carriers.
The Role of Emissions Inventories in Sustainability Reporting
More and more companies are realizing the value in conducting emissions inventories and reporting their greenhouse gas emissions to various authorities such as the Carbon Disclosure Project. Benefits range from boosting brand value as Unilever, Levi’s, or Organic Valley have done, to bottom-line gains from greater efficiencies and waste reduction. Often these go together.
Effective emissions inventories reveal opportunities to drive action. For example, a company might conclude as a result of conducting an emissions inventory, that shifting heating fuels from oil to natural gas or from older refrigerants to modern low-emission refrigerants, can reduce their emissions.
In this example, opportunity is apparent because different emissions factors are published for different heating fuels and different refrigerants. If all heating fuels or all refrigerants had the same emissions factors, the emissions inventory would not be nearly as useful.
New Reporting Guidance Ushers in Opportunity for Electricity Consumers
Historically, emissions resulting from electricity generation and consumption have been quantified using one of a small number of regional emissions factors. Variations between different electricity providers’ emissions were obscured because all electricity consumption in each region was subject to a single emissions factor that represented a gross average; whether a consumer consumed electricity from a hydroelectric plant that was practically emissions-free or from a coal plant that had very high emissions, the same factor was applied.
In the last couple of years, the Greenhouse Gas Protocol (an authority that guides methodologies for conducting emissions inventories) released their Scope 2 Guidance. This guidance has been key to driving utility providers to release provider specific emissions factors. Using these, electricity consumers are able to identify preferred providers and to shift their business away from emissions intensive providers. Large electricity consumers are now able to demonstrate the results of such action in their sustainability reports. Even more importantly, market forces are being applied to drive electricity providers towards renewables.
The Same Model can be Applied to Air Travel
As stated previously, for knowledge-based companies, electricity use is not a material source of emissions, business air-travel is.
Microsoft recognizes the materiality of air travel by including it as one of a small set of activities governed by their internal carbon fee.
The global consulting firm Accenture, reveals in their sustainability report that emissions due to business air-travel account for more than any other activity, over 50% of the firm’s total emissions. In 2015, Accenture’s air travel emissions amounted to 373,000 metric tons of CO2. This is equivalent to the annual electricity usage of 50,000 North American homes.
Those of our clients for whom air-travel is a material source of emissions are faced with a similar quandary as large electricity consumers faced over the years – all air travel activity is forced into a small set of emissions factors representing gross averages.
In actuality, air travel emissions vary hugely. Certain airlines use predominantly modern, more fuel-efficient fleets. Even within an airline, certain aircraft are vastly more fuel-efficient than others. Yet the categorization of air-travel into five or ten emissions factors obscures variation in emissions across the air travel market. Purchasers lack the ability to exercise choice.
One Step Back, Two Steps Forward
Years ago, when I first started working with sustainability reporting, fuel consumption figures for air travel were available on a flight-by-flight basis. This level of granularity would enable consumers to make choices in the routes they fly, the aircraft they fly, and the providers they use to fly.
These fuel consumption figures are still tracked – it’s just that they’re not made available to the public.
A Challenge to Airlines
Imagine if each air-travel provider published verifiable emissions for each flight flown? Short of that, just publishing average emissions factors across the provider’s fleet would be a big step forward. Today, not a single airline comes close to this level of transparency.
As CEO of Scope 5, I challenge all airline carriers to start publishing emissions factors that represent their fleet-average emissions.
Publishing such numbers would be more attractive to those airlines providing a less emission-intensive service. Doing so would put those airlines that are more emissions intensive in an uncomfortable situation. They would be motivated to take a harder look at fuel strategies and aged aircraft modernization plans.
This could emerge as a source of differentiation alongside customer service, price, and on-time departure and arrival.
Which Airline Will Be First?
We stand ready to incorporate these emissions factors into our libraries just as we now do for many electricity providers. Businesses engaged in sustainability reporting will have the choice to direct air travel to those carriers that publish their emissions factors or to those that can only be quantified by the small set of emissions factors derived from industry averages.
In this spirit, we recently integrated with Concur (the leading provider of integrated travel and expense management solutions), making it easier for companies using Scope 5 to track and report business travel emissions as part of their emissions inventory.
We look forward to supporting airlines in this journey, as well as enabling you, and your company, to make real progress towards sustainability goals.
About Scope 5
Scope 5 helps organizations improve environmental and economic impacts by tracking progress, revealing waste and driving action. Using Scope 5 Tracker™ technology, Scope 5 software can track any type of sustainability data at any scope by facility or product-line, and much more. Common examples include greenhouse gases (GHG), office buildings, business travel, supply chains, targets and forecasts, and public sustainability reporting. Learn more at www.scope5.com or contact us.