Businesses must help fight climate change as it can disrupt supply chains

The changing office environment continues to affect businesses and employees worldwide as the post-Covid atmosphere sees a return to the office and Zoom meetings winding down.

While this is not the reality for all employers and employees, so much is happening at the same time that it is difficult to predict what our work lives will resemble in a month, let alone another decade.

Of course, one of the main issues today surrounds climate change and the effect mankind is having on our planet. Cities around the globe are full of office buildings and naturally, one of the many ways to tackle this global crisis would be to focus on how offices can mitigate their effect on climate change.

Unpredictable weather patterns and extreme events can disrupt supply chains, especially for companies reliant on vulnerable regions. To ensure business continuity and compliance with laws, companies should assess supply chain resilience and labour practices.

Companies should avoid greenwashing and accurately disclose their environmental initiatives. Overstating green efforts could lead to accusations of unfair practices, impacting reputation. Transparency and responsible claims are crucial to avoid potential liability.

Jurisdictions may implement ecocide laws, scrutinising business practices causing severe and long-term environmental damage. "Green amendments" protecting the environment's rights have been enacted in some US states, possibly leading to private business liability.

Companies should assess climate change impacts in statements during securities sales. Vulnerabilities like climate-vulnerable supply regions should be disclosed. "Green" claims must be accurate, and reliance on emissions offsets should be cautious. Companies operating in multiple jurisdictions should also consider the most restrictive laws to assess risks, as climate rules vary and evolve by location. Seeking advice from local counsel is advisable.

Carbon accounting constitutes the meticulous process of quantifying and closely monitoring the quantities of carbon dioxide (CO2) and other greenhouse gas (GHG) emissions produced and absorbed by an organisation within the biosphere.

An integral component of gauging and effectively managing an entity's carbon footprint is tracking the comprehensive sum of GHG emissions released into the air due to human activities. By engaging in carbon accounting, individuals and organisations can not only determine the environmental impact of their carbon emissions stemming from various operations, processes and strategies but also ascertain the measures taken to counterbalance these emissions.

In essence, carbon accounting empowers these entities to comprehend their influence on the global climate and offers a foundation for making well-informed decisions aimed at diminishing their carbon footprint.

In the realm of business, governance and personal stewardship, carbon accounting functions as an indispensable tool for comprehending and mitigating one's impact on the ever-pressing issue of climate change. This practice plays an instrumental role in advancing sustainability aspirations, advocating for environmentally responsible actions, and consequently, aligning with broader objectives related to the environment, society and corporate governance.

The significance of carbon accounting in the battle against climate change is multifaceted and compelling for various reasons:

Carbon accounting offers a framework for organisations and entities to recognise their production of greenhouse gas emissions. This insight enables them to take proactive measures in diminishing their carbon footprint. The ability to track emissions and establish reduction targets is the initial stride in curbing climate change and curtailing global carbon emissions.

Comparable to the acknowledgement decades ago that factories emitting excessive smoke were unacceptable, today's realisation revolves around the unacceptable nature of current carbon emissions. Carbon accounting offers a vehicle through which individuals, businesses and governments can assume accountability for their contributions to climate change.

While environmental responsibility might initially seem altruistic, a growing number of nations and regions are introducing mandates and policies to curtail GHG emissions. Carbon accounting serves as a guide, aiding organisations in adhering to these regulations while ensuring precise reporting of their emissions. This not only helps avoid potential penalties but also fosters a culture of transparency.

Investors and stakeholders in publicly traded entities are progressively demanding transparency and accountability regarding an organisation's environmental impact. By effectively implementing carbon accounting within financial statements such as annual reports, businesses can actively demonstrate their commitment to sustainability. This, in turn, attracts socially responsible investors and can bolster customer loyalty.

With a comprehensive understanding of their carbon footprint, forward-thinking organisations embark on a journey to discover innovative pathways to reduce carbon emissions. This quest often leads to the replacement of less energy-efficient technologies, subsequently enhancing operational efficiency and reducing costs through infrastructure modernisation.

Every nation adopts a distinct approach to reducing climate emissions, often resulting in considerable disparities. By employing robust carbon accounting practices, nations can streamline their efforts and align with international agreements and collaborations.

Sound carbon accounting practices facilitate the strategic planning of carbon offset initiatives for companies and organisations. This empowers them to invest in projects that either diminish or remove CO2 from the atmosphere, contributing to a positive environmental impact.

In essence, carbon accounting transcends mere number-crunching; it stands as a foundational tool in the multifaceted battle against climate change, providing organisations and individuals with the insights and impetus to drive tangible change toward a more sustainable and ecologically responsible future.

By Daniel Elliot

Daniel is a business consultant and analyst, with experience working for government organisations in the UK and US. On his free time, he regularly contributes to International Business Times UK.