Software special: Rebooting reports

With the introduction of mandatory GHG reporting, the environmentalist examines what carbon accounting software can offer organisations

Under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, quoted firms in the UK must include in their directors’ report the amount of greenhouse-gas (GHG) emissions their activities produced that year. The introduction of mandatory GHG reporting is a good time for businesses, whether or not they are directly affected by the legislation, to revisit how best to gather their emissions data.

Over the next few pages, the environmentalist examines the carbon accounting software solutions available from several of the leading providers, including reviews by IEMA members, and outlines how to select the right software for your organisation.

Driving change

While the UK legislation will not directly affect more than the 1,100 firms listed on main market of the London Stock Exchange, it is likely to require many more companies to improve the quality of their data. Groom Energy reported earlier this year that company requests for suppliers’ carbon emissions data increased significantly in 2011–12, and represent the most important new pressure point for emissions disclosure. Software can help to ensure those numbers are robust.

“We have clients that are keen to enhance the quality of their GHG data,” says Alistair Blackmore, sustainability consultant at software company CRedit360.

Effective carbon accounting software can easily illustrate performance by country, site, business unit or process. As a result, organisations can quickly pinpoint where to focus their efforts to improve carbon and energy management. “Companies are no longer gathering and reporting GHG information for solely reputational reasons; it’s about driving operational efficiency,” says Blackmore.

Gary Davis, operations director at software vendor Ecometrica, agrees: “A lot of companies now believe that accurately measuring environmental impacts will help build better businesses. They’ve seen the leaders cut costs and want to follow the same model.”

Spreading the word

Spreadsheets have been the default option when it comes to gathering and reporting GHG data, but they have their limitations, particularly in complex organisations. Multiple data points can soon overload even the best spreadsheet systems and there is plenty of scope for version control errors.

A best practice guide on implementing carbon software from the Carbon Disclosure Project (CDP), which was published in 2012, highlights some of the problems. “As carbon reporting matures, spreadsheets are growing increasingly complex and becoming cumbersome, prone to error and an increasing burden on resources,” it states.

The CDP cites IT and management consultancy Capgemini as an example of when spreadsheets are no longer viable. It reports that the UK team at Capgemini managed a 4GB spreadsheet, with more than three million new data points being processed each year from 30 sources.

Jamie Devlin, head of client services at Greenstone, a provider of GHG software, also highlights the practical limitations of spreadsheets. “A client came to us because they genuinely could not add another column to their spreadsheet,” he says. Meanwhile, Blackmore says that the tipping point for moving from spreadsheets to software is often reached when organisations start to make their GHG data publicly available. “As soon as you start publishing data, spreadsheets are not good enough. They are not auditable,” he explains.

Vincent Reulet, key account manager at sustainability consultants and software company Best Foot Forward, says that when more than three or four people are working on a spreadsheet it becomes hard to manage. “You can lose data if the file is saved locally,” he warns. “And spreadsheets can easily hide errors.” Devlin agrees: “There are examples of firms uploading historic data to software systems and getting a different result. It could potentially mean that the GHG figures over a number of years are simply wrong.”

Spreadsheets and free tools for tracking and calculating carbon still have their place, at least for now, particularly in situations where a select number of people are collecting data from a handful of sites. However, if you want to go further than measuring and reporting CO₂ emissions, and start to cut carbon and reduce costs, software is probably necessary.

The benefits of switching from spreadsheets to software are numerous. Automated real-time or batch feeds with data validation, field mapping and error reporting can reduce the cost of capturing the data, for example. Built-in version control tools can provide good audit trails, showing when data was modified, while documentation, such as energy invoices, can be uploaded to the system, simplifying the verification process. Ultimately, software can improve the accuracy of GHG reporting, bringing it more into line with financial accounting systems; with integrated reports more likely in future, this will help to make all businesses more transparent.