ESG
Market-based calculations to build a reliable ESG framework
Today, investors, clients, and team members expect companies to understand and Environmental, Social, and Governance (ESG) and the framework reporting required for compliance. In order to achieve this, a Greenhouse Gas (GHG) carbon inventory needs to be compiled and calculated. Further, a story needs to be told of the investments a company is making to increase efficiency and layout science-based goals needs that support the message around ESG.
These are tasks that are straightforward, but each requires specific industry knowledge of the calculations, standards, and accepted practices to execute. Where and when to use market-based calculations in lieu of electric grid averages, how to pick a baseline year, and how to identify levers available to the organization to control carbon emissions can be difficult to ascertain.
This is where an energy consultancy like SMG Energy can become an extension of your team. SMG can perform rudimentary carbon inventory activities as well as work with a client to building a complete step-by-step sustainability program framework for the company, which is supports the uniqueness of the business as well as the broader initiatives around sustainability and ESG.
Create a lasting foundation for sustainability
SMG Energy can help provide our clients with the foundations for establishing a publicly facing corporate sustainability program, which will include the establishment of an initial greenhouse gas (GHG) emissions baseline and ongoing measurement strategy, measurement of past and future energy project effectiveness, mandatory benchmarking compliance, and a pro-active program to identify opportunities and measure corporate goals against actual performance.
Our goal is to provide reporting that is complete, consistent, and accurate through a transparent lens.
SMG Energy will work with clients
within the following scopes:
Scope 1
Direct Emissions
This includes vehicles used by the business, gas combusted in boilers or furnaces. refrigerants leaked into the environment, This can include all retail operations, office and support facilities, manufacturing, and distribution.
Scope 2
Electricity Indirect
Purchased electricity used to operate the business, facilities such as retail stores, warehouses, offices. Since this energy has emissions associated with the production of the electricity, this must be calculated not only from the amount of energy but also the source of the energy which can include nuclear, natural gas, coal, etc.
Before accounting for scope 2 emissions, companies should consider which business goal or goals they intend to achieve. Companies consuming electricity may seek to:
- Identify and understand the carbon impact associated with emissions from purchased and consumed electricity
- Identify internal GHG reduction opportunities, set reduction targets, and track performance
- Engage energy suppliers and partners in GHG management
- Enhance stakeholder information and corporate reputation through transparent public reporting
- Consider how capital investments and expansion of the business scales the carbon footprint and water impact to local communities
Scope 3
Supply Chain Emissions
There are a number of benefits associated with measuring Scope 3 emissions. For many companies, the majority of the greenhouse gas (GHG) emissions and cost reduction opportunities lie outside a client’s own operations. The scope of work is outlined in the following areas: Carbon reporting, performance analysis, benchmarking, and guidance.
By measuring Scope 3 emissions, organizations can:
- Assess where the emission hotspots are in the supply chain;
- Identify resource and energy risks in the supply chain;
- Identify which suppliers are leaders and which are laggards in terms of their sustainability performance;
- Identify energy efficiency and cost reduction opportunities in the supply chain;
- Engage suppliers and assist them to implement sustainability initiatives
- Improve the energy efficiency of the products
- Positively engage with employees to reduce emissions from business travel and employee commuting.