Enhanced carbon reporting

Calculating the carbon footprint connected to energy usage presents several significant challenges for companies. These challenges impact the accuracy of the calculations, the collection of data, and the overall ability to measure and reduce carbon emissions effectively.

Here are the main challenges:

Data accuracy and reliability

Ensuring the accuracy and reliability of data is crucial when calculating carbon footprints. Inaccurate or incomplete data can lead to incorrect calculations, undermining efforts to track and reduce carbon emissions. Companies must ensure that all energy usage data is accurately recorded and verified.

Varying tariffs and energy consumption

Energy consumption can vary significantly based on different tariffs at different times of the day or year. Peak and off-peak tariffs, as well as time-of-use pricing, add complexity to the calculation of carbon footprints. Companies need to accurately track energy usage across these varying tariffs to ensure precise calculations.

Renewable energy sources

Incorporating renewable energy sources into carbon footprint calculations adds another layer of complexity. Renewable energy, such as solar or wind, typically has a lower carbon footprint compared to traditional fossil fuels. Companies must accurately account for the proportion of energy sourced from renewables to ensure a true reflection of their carbon footprint. Evidencing the source of renewable energy is also vital if you want your organisation to be able to make claims based on these low carbon options.

Data collection

Collecting the necessary data for carbon footprint calculations can be challenging. This involves gathering detailed information on energy usage from various sources, including electricity, gas, and other fuels. Ensuring that all relevant data is collected and integrated into a unified system is essential for accurate calculations. The less time you can spend collecting data, the more time you can spend decarbonising your organisation.

Integration of data sources

Integrating data from multiple sources, including different types of meters and energy suppliers, can be difficult. Disparate systems and formats require sophisticated integration solutions to ensure seamless data flow and consistency. This integration is crucial for accurate and comprehensive carbon footprint calculations.

Regulatory compliance

Companies must comply with regulatory requirements related to carbon emissions reporting often shown by the increasing adopt of ESG reports. Keeping up with these regulations and ensuring that all data is accurately captured and reported is resource-intensive but essential to avoid legal penalties and support sustainability goals. Regulation includes:

The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013

• Large companies must report non-financial information on environmental, social, human rights, and anti-corruption matters, including greenhouse gas emissions and energy efficiency measures.

The Non-Financial Reporting Directive (NFRD)

• Requires large public-interest entities to disclose non-financial information on environmental, social, human rights, anti-corruption, and board diversity aspects in their annual reports.

The Task Force on Climate-related Financial Disclosures (TCFD)

• Mandates disclosures on climate-related financial risks and opportunities in governance, strategy, risk management, and metrics, becoming mandatory for certain GB companies.

Streamlined Energy and Carbon Reporting (SECR)

• Applies to large companies, requiring energy use, greenhouse gas emissions, and energy efficiency actions to be reported in the Directors’ Report.

The EU Sustainable Finance Disclosure Regulation (SFDR)

• Requires financial market participants to disclose integration of sustainability risks and opportunities into investment processes and their impact on sustainability factors.

Complexity of calculations

The complexity of calculating carbon footprints, especially when considering various energy sources and tariffs, can be daunting. Companies need robust software solutions that can handle these complexities and provide accurate, comprehensive calculations.

The solution

By addressing these challenges with advanced data management and calculation solutions, companies can enhance the accuracy and reliability of their carbon footprint calculations. TMA’s comprehensive suite of tools and services is designed to help companies manage energy usage data effectively, ensuring accurate carbon footprint calculations and supporting sustainability initiatives.