ENERGY MANAGEMENT & SUSTAINABILITY
NAVIGATING SHIFTING DEMANDS
Carbon reporting, along with Environmental, Social & Governance (ESG), have been ramping up in recent years. Paul McCaig, ESG Lead at Valpak by Reconomy, unravels their complexity and sets out a plan of action for businesses.
If you ask a facilities manager to name what their job entails, ‘carbon accountant’ is unlikely to top the list. Yet, increasingly, as we approach the UK’s target to reach net zero by 2050, and ESG (Environment, Sustainability and Governance) requirements spread to every corner of the supply chain, it is FMs who are asked to oversee the process.
Almost 12,000 large UK companies already report through the Streamlined Energy and Carbon Reporting (SECR) regime. But the direction of travel is towards greater disclosure. While larger organisations typically begin the journey, much of the information needed to meet targets and framework demands lies within the supply chain. To succeed, the two need to work together.
The drivers for suppliers vary. Some organisations offer favourable rates to those that engage; for NHS suppliers, sustainability and carbon reduction carry a minimum 10% weighting in every procurement evaluation, and evidence of change is now a condition for doing business. By April next year, every NHS supplier must publish a carbon reduction plan, with the five previously-required Scope 3 (indirect) categories expanding to the full 15. A year later, in April 2028, suppliers will need to show the life-cycle emissions of individual products.
From January 2027, the UK Sustainability Reporting Standard S2 is proposed to become mandatory for around 500 listed companies, starting with financial services. Meanwhile, energy-intensive industries face a deadline of December 2027 for ESOS Phase 4. Other sectors, including agriculture, transport and energy, are setting their own targets.
Which framework? For suppliers, this can be a tricky area to navigate. There are many options to choose from so, before jumping- in to one process or another, it is important to assess customer requirements against your own goals and mandatory requirements.
Untangling the threads The most important piece of advice is simple: don’t panic. Having said that, this is new ground, so almost everyone is facing the same challenges. One of the most common misconceptions is that data has to be perfect first-time round. In the early stages, it is acceptable to flag missing data, before putting a plan in place to source the figures.
When Valpak manages the process for clients, in every case, the key to success lies in an engaged contact within the organisation. Data comes from every area of the business, from procurement and production, to transport and packaging departments. In a recent project, I required information from around 50 people within the organisation. For each of these contacts, it was a new task in a busy schedule, so having the support of an in-house project manager is key.
Managing processes Keeping this in mind, the first step is to build a reliable baseline before setting a strategy and monitoring progress.
1. Position audit
The initial audit is designed to assess current ESG practices and identify legislative or data gaps. It will
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