New Scope 2 reporting guidelines

The Carbon Disclosure Project issued new guidance last week, on how businesses should account for Scope 2 emissions - otherwise known as emissions from electricity. The revision recognises that, prior to this, the guidelines were in a bit of a mess when it came to the question of how to account for emissions from electricity generated from renewable sources.

Everyone felt that the blanket use of a grid average emissions factor was wrong but no one had come up with an alternative.  The good folk of the GHG Protocol had maintained a stony silence while their working group looked into the issue, Defra created a Gross and Net approach, energy suppliers had exploited the confusion to sell "green" tariffs that were anything but and businesses that had paid a premium for a renewable energy supply felt cheated that they were then not able to use it in their green house gas calculations.         

There are 2 major differences in the new guidance. 

In simple terms, businesses are now required to account for emissions from electricity using a supplier specific conversion factor (not grid average), based on the supplier’s declared fuel mix.

Furthermore, businesses can log zero emissions for each MW of electricity consumed for which they receive an acceptable tracking instrument.  These instruments are Guarantees of Origin, confirming that the electricity consumed corresponds to an equivalent amount of electricity generated from a renewable source.    

Putting to one side the fact that this will add another level of complexity to an already complicated process (one of our clients has almost 100,000 electricity meters)  its interesting to look through the facts to speculate on the potential implications -  

1. Procurement of electricity generated from renewable sources will now be seen as a valid component of a corrporate GHG reduction strategy.  Will this increase demand, price and therefore encourage investment in new supply? Clearly this is the hope from a policy perspective

  

2. Energy company tariffs will be less important than fuel mix. Will suppliers scale back green tariffs, which have had little to recommend them and aim to buy more renewable supply?     

3. EDF and British Gas could be beneficiaries.  A look at table below shows the fuel mix of major suppliers in the UK. As maybe expected, Good energy and Ecotricity top the table for lowest emissions per kWh, but with the likelihood of higher unit costs.  EDF and British Gas, on the other hand, with high proportion of nuclear in the fuel mix, are significantly better than the rest at no premium.  

Supplier	Coal	Gas	Nuclear	Renewable	CO2*
Good Energy	0.00%	0.00%	0.00%	100%	0.000 g/kWh
Ecotricity	12.10%	19.70%	2.30%	64.30%	195.5 g/kWh
EDF Energy	27.90%	5.70%	61.80%	3.90%	280 g/kWh
British Gas (Centrica)	11.40%	56.90%	22.80%	7.70%	338 g/kWh
EBICo	29%	59%	1%	10%	505 g/kWh
Scottish and Southern Energy	29%	59%	1%	10%	505 g/kWh
npower (RWE npower)	28%	60%	1%	9%	509 g/kWh
Utility Warehouse	28%	60%	1%	9%	509 g/kWh
E.ON Energy	34.30%	47%	5%	10.20%	543 g/kWh
ScottishPower	48.90%	43.40%	0.00%	7.60%	620 g/kWh
UK average	28.90%	44.20%	17.30%	7.90%	450 g/kWh

Source - Uswitch 

Everyday Value, Occasional Values

We all want to believe that we're doing the right thing. We buy fair trade chocolate, we frequent independent shops, we cycle to work, we feed the birds.   But in vast swathes of our daily lives as consumers there is very little to point us in the right direction and we rely on trust.  We trust retailers to do the digging for us, to know that the factory isn't using forced labour, to be sensible with hazardous waste, to know what they're selling and to be honest about it.  In doing so we enter into a compact - we'll go quietly if you don't diddle us. 

The horse meat issue is a harsh reminder that, for some retailers, that contract is flexible. That in the in the pursuit of profit they are willing to abuse the trust of consumers.

So, as consumers, what do we do? Maybe its time we we went a little less quietly and took a little more responsibility for finding out. Perhaps not to this extent but it never hurts to ask.   

   

The United Faces of Benetton

United Colors of Benetton has always challenged status quo in it's advertising. From its controversial ads in the 1990s to its more recent UNHATE campaigns, it has always seeked to challenge existing paradigms and 'fight against hate and discrimination in all its forms'.

It's most recent activity is a global advert campaign featuring 9 models it believes to be trendsetters. These include disabled model Maio Galla, who caused a stir during Berlin Fashion Week in 2012 when he wore shorts that revealed his artificial leg, trans-sexual super model Lea T,  and Charlotte Free, a Californian model made famous because of her pink hair. Whilst the print ads look normal at a glance, they have created 'getting to know' videos where each of the models explains where they came from and what colour means to them. It is also hoping to build an online community dedicated entirely to colour which will engage user-generated feeds from online channels and it will also sell limited edition t-shirts with the proceeds from these sales going to the UNHATE Foundation.

Whilst in the past Benetton's actions were seen as more shocking than socially motivated, this campaign shows that Benetton is really think about the social purpose of its company. It ticks all the boxes by choosing models from across the globe who represent different things, through supporting it with online activity, and by generating money for the cause through selling T-shirts. All in all - Well done Benetton!

Get a Purpose and Get Real

Great new blog from our girl Harriet Henry in Boston, exploring the differences in approach to business responsibility between Europe and the US.

Harriet’s latest post takes a look at the growing momentum (on both sides of the pond) behind the idea of a business’s ‘Purpose’.  In many ways, this is yet another good sign that companies are looking beyond the silos of ‘corporate social responsibility’ to explore what a business itself stands for. What’s it achieving? Why are we all better off that it exists? Why should I buy its stuff rather than another brand?

Purpose needs to reflect substance and action. Back over here in the UK, we heard last week that Barclay’s boss Antony Jenkins has announced a new ‘purpose and values’ blueprint for the company. He sent a message out to all staff to say that if they’re not on-board with the new ethical approach to how they do business, then they’re not welcome at Barclay’s anymore.

It certainly grabbed some headlines.  And to be fair, this is a (small) step in the right direction for rebuilding standards of the UK’s financial services. But surely Barclay’s bosses, like the media, must be aware that the new ‘purpose and values’ will only affect the company’s risk profile and its reputation if they’re accompanied by a hard-nosed plan to make them a reality – to actually create cultural change from within.

As Harriet says – Purpose can help a company’s people unite behind a cause, behind a bigger meaning of why they all turn up for work in the morning.  As the stock markets continue to rally this week after five years of uncertainty and learning hard lessons of business ethics, let’s see whether this growing commitment to corporate Purpose manages to translate itself into real change.

How many slaves work for you?

The word ‘slave’ provokes a response. It’s aggressive, it’s nasty, it’s taboo. Slavery Footprint says there are at least 27 million slaves working in the world today, and their website – SlaveryFootprint.org – uses a simple but very engaging mechanism to help consumers calculate the answer to the provocative question 'how many slaves work for me?'.

Millions have used it, and tomorrow – National Human Trafficking Awareness Day – Slavery Footprint is going to make a lot of noise, as hundreds of thousands take part in a social media flashmob to raise awareness of how we’re all supporting slavery through the everyday goods we buy.

And because we all know people respond to visual cues, the chain is everywhere. Not the traditional iron type that tugged at the ankles of slaves; this time it’s a corporate supply chain: slave, raw materials, manufacturer, brand, consumer.

“Everyone says they would have fought against slavery 150 years ago. Now’s your chance” we're told. “Today, you still have slaves working for you but they’re hidden deep within the supply chains of the products you love. In Uzbekistan, forced laborers harvest the cotton for your t-shirt, boys in the Congo mine the raw materials for your cell phone, and children in Ghana are enslaved on fishing boats and forced to catch a seafood supper.”

This campaign is one to watch. Not only is it symbolic of the increasingly effective tactics and tools that campaigning organisations are using to generate support, they’ve also adopted a very interesting strategy to provoke (force? inspire?) corporate change.

They primarily target the consumer. Not the company. Not the brand. Not the manufacturer. The person who's buying the products, unwittingly supporting slavery.

Slavery Footprint say that ignorance of slavery is what keeps it alive. They realise that a campaigning organisation is far more likely to get heard if a million voices are shouting at a business for change, rather than just one, and they think the consumers would shout if they knew.

The social reach of tomorrow’s thunderclap currently stands at 177,300. Tomorrow's social media extravaganza will take place in a largely indiscriminate direction, shouting loudly but not embarrassing any specific big brand. Give it a year though, and I wouldn’t be surprised if that army of passionate, volunteer campaigners was putting pressure on specific companies that haven’t sorted out their supply chains.

If you're in business and interested in the solutions, take a look at Made in a Free World for ideas - or talk to us!

Sponsoring sport - the golden goal?

Coca-Cola’s sponsorship of last year’s Olympic Games was a real landmark.

At a time when society is increasingly expecting businesses to demonstrate that they play a positive, responsible role in the world, sponsorship is the ideal moment to do something really impressive and really public, and get the rewards that leadership deserves. 

At London 2012 Coca-Cola did some impressively positive things, judging by any standards. Whether it’s the fact that 73% of drinks consumed at the Games were Coca-Cola’s water, juice or no/low-calorie brands; the fact that 100% of bottles were recyclable and the £15million invested into a new UK recycling plant to handle them; the 1000 young people given the chance to carry the torch as a Future Flame for their community; the investment in the Special Olympics to create sporting opportunities for people with intellectual disabilities; or the hundreds of environmental pledges made by athletes at the in-park sustainability hub created by Coca-Cola (I could go on – read more here), this was a wide-ranging, innovative and really committed demonstration of a company doing the right thing, in a relevant way at the right moment.

WWF-UK CEO David Nussbaum sees it as a new benchmark that other sponsors will be expected to reach, “The work Coca-Cola has undertaken to reduce its impact at the Games, and the lengths to which it has gone to use the power of its brand to engage others and ensure its actions have a lasting impact is to be commended and sets a standard for future corporate sponsors of international events”.

We worked with Coca-Cola to produce London 2012: Our Sustainability Legacy, detailing how the company achieved their most sustainable sponsorship to date in order to inspire and guide others wanting to deliver a truly sustainable event of their own. It provides new best practice models, including one for measuring and managing carbon impacts; another for an innovative, efficient waste recycling system for large events. Last week the final piece of the jigsaw was added when Demos published the results of their review to quantify the social impact of Coca-Cola’s London 2012 sponsorship – see the headlines here.

Models are one thing – there are three in the links above to get you started if you’re responsible for (or sponsor of) a big event.  But they’re not enough. It’s putting it into practice that matters for the brand and for us all. Coca-Cola did it at London 2012. 2013 brings the World Athletics Championship, the African Cup of Nations, the Rugby League World Cup, the Australian Open, as well as the conclusion to the Champions League, Wimbledon and all the other annual sporting highlights. Which of the many corporate sponsors will step up and take gold? It requires commitment and investment but there’s a big prize on offer.

Being a good brand is the new brand

“People trust companies less and less. They do not believe companies, they do not believe CEOs, they do not believe advertisers”. So opens the trailer for a new documentary on the revolution in the advertising world: The Naked Brand.


The Naked Brand explains how the 21st century explosion in the use of social media is making brands more transparent – whether they like it or not. Today, consumers can easily look, search and find the reality of what the company behind the brand stands for. The film documents how an increasing number of brands are responding to this, recognising that these days they can’t just say they’re great, they have to actually be great. 

The film comes hard on the heels of new research from the UK, the US, Germany, China, India and Brazil, which found that two thirds of consumers say they feel “a sense of responsibility to purchase products that are good for the environment and society”.

I haven’t yet watched the full length film but it certainly looks like it’s setting out in the right direction. Especially encouraging is the director’s emphasis that it’s about doing good business because it’s the business-savvy thing to do, not because it’s a 'nice' thing to do. This is about sustainable business in its original sense – managing a company for the long-term.

But I’m less sure about the film’s target audience. Created by an ad agency, it looks like it heavily features and focuses on the role of marketing. Although I agree that it’s absolutely essential that brand and marketing teams are informed, supportive and activating around a brand’s values, this can only be done when the business has ensured it genuinely is standing for those values. You have to walk the talk before you start talking. Over the years, far too many brands have tripped up. The reputational crises that result have been widely reported, not least by us in Value with Values.

If this film triggers businesses to improve how they do business and then communicate it more effectively to consumers – great. But if it simply makes marketing teams think they’ve found an easy win without understanding how to do it properly, oh dear. We’ll be watching.



From Director Jeff Rosenblum (courtesy of Sustainable Brands):

“The big lesson is that social media makes brands completely transparent. They’re essentially naked. What that means is, if a corporation creates a crappy product — if they behave unethically — no advertising message can cover that up. Brands are spending a ton of time figuring out how they can create great content and ads for social media, but what they should be saying is, instead of facing outward, let’s turn our focus inward — let’s focus on our own behavior. When we establish excellent corporate behavior, people will carry that message on social media platforms much more effectively than we ever could with a paid advertisement. What we don’t want the film to be is a ‘green’ story — ‘be sustainable because it’s good for the environment.’ The story we want to tell is, when you start moving the planet forward, you as a corporation can make more money. And that doesn’t sound as nice as ‘you should behave better because it’s the right thing to do,’ but I think it’s more of a sustainable business practice.”