This blog explains the fundamentals of carbon management, why it is relevant to businesses, and the steps involved in understanding, managing and reducing your organisation’s greenhouse gas emissions. It also explains the relationship between carbon management and Streamlined Energy and Carbon Reporting (SECR), and how Valpak’s Carbon Management service can support businesses with understanding and managing their emissions.
Climate change and the need to reduce greenhouse gas emissions are increasingly influencing business decisions, customer expectations and regulatory requirements. As a result, businesses may need to understand their carbon footprint and explain how they are working to manage and reduce emissions.
But carbon management is about more than reducing emissions and meeting reporting requirements. By understanding where emissions arise, businesses can also identify resource inefficiencies, prioritise opportunities for improvement and build greater organisational resilience.
Valpak’s Carbon Management service helps businesses measure, understand and manage their organisational greenhouse gas emissions. This can include establishing a carbon footprint, supporting relevant reporting requirements such as Streamlined Energy and Carbon Reporting (SECR) and identifying opportunities for emissions reduction. Carbon Management is one of the services within Valpak’s wider Carbon Solutions suite.
Carbon management is the ongoing process of measuring, understanding, managing and reducing an organisation’s greenhouse gas emissions.
It can involve identifying where emissions arise, calculating a baseline carbon footprint, setting reduction targets, developing an action plan and monitoring progress.
A structured approach to carbon management can help businesses understand their emissions, identify potential efficiencies and provide the information needed to respond to relevant reporting requirements.
Under the Greenhouse Gas Protocol, greenhouse gas emissions are grouped into three scopes. This helps businesses distinguish between direct emissions from their own operations and indirect emissions associated with purchased energy and their wider value chain.
| Emissions scope | What it covers | Business examples | Typical data sources |
|---|---|---|---|
| Scope 1 | Direct emissions from sources owned or controlled by the business. | Fuel combustion in company vehicles, heating systems and industrial processes. | Fuel bills, fuel purchase records, fleet records and meter readings. |
| Scope 2 | Indirect emissions from the generation of purchased energy used by the business. | Purchased electricity, heat and steam. | Electricity bills, energy invoices and meter readings. |
| Scope 3 | Other indirect emissions that occur across the business’s value chain. | Suppliers, transportation, product use and waste disposal. | Supplier data, purchasing records, logistics data, travel records and waste data. |
Understanding the three scopes can help businesses identify where their emissions arise and determine which areas to investigate when considering reduction opportunities.
Understanding relevant Scope 3 emissions can also require information from suppliers and other organisations across the value chain.
SECR and carbon management are related, but they are not the same thing.
SECR is a reporting requirement. Government guidance states that it applies to UK-incorporated quoted companies and to large unquoted companies and LLPs that meet the relevant criteria. Organisations within scope are required to disclose specified energy use and greenhouse gas emissions information.
Carbon management is broader. It involves understanding an organisation’s emissions and using that information to inform decisions, identify reduction opportunities and monitor progress.
For organisations that fall within the scope of SECR, gathering and understanding relevant energy and emissions data is therefore an important part of meeting their reporting requirements. The same information can also provide a foundation for wider carbon management activity beyond the reporting requirement itself.
Whether an organisation falls within the scope of SECR depends on its individual circumstances and the applicable eligibility criteria.
Businesses may undertake carbon management for several reasons.
For businesses within scope, requirements such as SECR create an obligation to report specified energy and carbon information.
A structured approach to carbon management can help businesses understand the information they have, identify what additional data may be needed and support the preparation of relevant emissions information.
Establishing a carbon footprint can help businesses understand which activities and emission sources contribute to their overall footprint.
This provides a baseline from which potential priorities and reduction opportunities can be considered.
Measuring emissions can highlight areas of high energy, fuel or resource use.
This may identify opportunities to improve operational efficiency. Any resulting cost or emissions reductions will depend on the actions selected and how they are implemented.
Customers, procurement teams and other organisations in the value chain may request information about greenhouse gas emissions.
Having a defined approach to carbon measurement and reporting can make it easier to provide consistent information in response to these requests.
Carbon management can also contribute to wider sustainability activity by providing emissions data that can inform objectives, action plans and progress monitoring.
Valpak’s Carbon Management service follows a structured approach to helping businesses understand their organisational emissions, establish a carbon footprint and identify potential reduction opportunities.
The objectives may include supporting SECR reporting requirements, establishing a carbon baseline, informing emissions reduction activity or contributing to a wider sustainability strategy.
The scope and outputs of an assessment will depend on the organisation’s objectives, activities, reporting obligations, assessment boundary and available data.
We start by understanding what you want to achieve.
This could include establishing an organisational carbon footprint, supporting SECR reporting requirements where applicable, informing a wider sustainability strategy or developing an existing approach to emissions reduction.
We can also help you understand which recognised standards and frameworks may be relevant to your objectives.
Once we understand your objectives and operations, we define the scope of the assessment.
This establishes which parts of your organisation, activities and emission sources need to be included. Clear assessment boundaries help determine what data is required and how the results should be interpreted.
We gather the data needed to calculate the greenhouse gas emissions within the agreed scope.
Depending on the assessment boundary, this may include information about your organisation’s operations, purchased energy and relevant upstream and downstream value-chain activities.
The availability and quality of the data will influence the assessment and may determine whether estimates or other appropriate calculation methods are needed.
We apply appropriate emission conversion factors and calculation methods to the data collected to estimate the greenhouse gas emissions within the agreed boundary.
This establishes a baseline that can help you understand where emissions arise, consider reduction priorities and measure future progress.
Where relevant to the agreed scope, Valpak conducts organisational greenhouse gas assessments in line with ISO 14064-1, which specifies principles and requirements for quantifying and reporting greenhouse gas emissions and removals at organisational level.
Once your carbon footprint has been calculated, we help you interpret the results and identify significant emission sources within the agreed scope.
This can support the identification and prioritisation of potential reduction opportunities. The most appropriate actions will depend on factors such as feasibility, available resources, operational requirements and potential impact.
The next step is to use the assessment findings to inform practical action.
Valpak can help you develop an action plan based on the priorities identified through the assessment. This may include proposed actions, responsibilities, measures of progress and opportunities for further investigation.
Carbon management is an ongoing process. Reviewing your data and approach over time can help you monitor progress, respond to organisational changes and identify further opportunities for emissions reduction. Where relevant, Valpak can also help you understand applicable carbon reporting requirements, standards and frameworks.
For organisations within scope, SECR may be an important reason for collecting and reporting carbon and energy information. However, carbon management can go beyond meeting a reporting requirement.
Once a business has established a clearer picture of its greenhouse gas emissions, that information can provide a basis for considering reduction opportunities, reviewing progress and supporting wider sustainability objectives.
Valpak’s Carbon Management service can support businesses with understanding their organisational emissions, establishing a carbon footprint, identifying potential reduction opportunities and responding to relevant carbon reporting requirements, including SECR where applicable.
Carbon Management is part of Valpak’s wider Carbon Solutions suite. The wider suite includes services beyond organisational carbon management, so businesses can access related support based on their individual needs.
Whether you are starting to understand your emissions, responding to reporting requirements or developing an existing carbon management approach, Valpak can help you identify practical next steps based on your objectives and agreed scope.
Contact Valpak to discuss how our Carbon Solutions can support your business.
Senior Researcher
Not every UK business is required to measure and report its greenhouse gas emissions.
However, some organisations are subject to mandatory energy and carbon reporting requirements. For example, SECR applies to certain UK-registered quoted companies, large unquoted companies and large limited liability partnerships.
Other businesses may choose to measure and manage emissions to support sustainability goals, respond to customer or supply chain requests, or inform their wider business strategy.
Organisations should assess their circumstances and take appropriate professional advice when determining which legal or reporting requirements apply.
SECR is a reporting requirement for organisations that fall within its scope. Carbon management is the wider process of measuring, understanding and managing an organisation’s greenhouse gas emissions.
For an organisation within scope of SECR, collecting and understanding relevant energy and emissions data supports its reporting obligations. That data may also be used to inform wider carbon management activity.
A carbon footprint measures the greenhouse gas emissions associated with an organisation, product, service, activity or other defined subject.
Carbon management is the wider, ongoing process of understanding those emissions and deciding how they will be managed and reduced.
Put simply, a carbon footprint provides the baseline information. Carbon management involves using that information to identify priorities, plan action and monitor progress.
Valpak’s Carbon Solutions can support businesses through these stages, from establishing an organisational carbon footprint to identifying potential reduction opportunities and developing an action plan.
There is no single standard or framework that applies to every UK business.
Relevant requirements will depend on factors such as the organisation’s legal structure, size, activities, assessment boundary, reporting obligations and intended use of the results.
ISO 14064-1 sets out principles and requirements for quantifying and reporting greenhouse gas emissions and removals at organisational level. The Greenhouse Gas Protocol also provides widely used corporate greenhouse gas accounting standards and guidance.
SECR is a UK reporting requirement rather than a carbon-accounting standard. It applies to organisations that fall within its scope.
The appropriate approach will depend on your organisation, its reporting responsibilities and what it is trying to achieve.
The time required will depend on the size and complexity of your organisation, the agreed assessment boundary, the emission sources included and the availability and quality of the necessary data.
For example, an assessment that includes relevant Scope 3 categories may require information from suppliers or other organisations across the value chain.
Defining the scope and reviewing the available data at the outset will help establish what is required for the assessment.
The contents of a carbon footprint report will depend on the agreed scope, objectives, reporting approach and available data.
It may include:
The report can provide a baseline for setting targets, developing an action plan and monitoring progress. The precise contents and level of assurance should be agreed as part of the scope.