Our future prosperity is dependent individuals, corporations and institutions taking action today, to reduce their dependency on fossil fuels, and enable the transition to a low-carbon economy.

In this white paper we discuss the principles of carbon reporting and how independent verification can enhance reputation, reduce risk, and bring rewards.

Carbon reporting

For larger companies carbon reporting is now mandatory. In the UK, quoted companies and those operating in Europe, are required to report on their global energy use and greenhouse gas emissions (GHG), and others are encouraged to do so.

As a general principle, reporting should be:

• Relevant to the environmental impacts of the organisation
• Quantitative and measurable against KPIs
• Accurate to enable confidence of stakeholders
• Complete to include all sources of impact within the boundaries chosen
• Consistent to enable meaningful comparison
• Comparable by using standard indicators
• Transparent by keeping a record of assumptions, methods, and calculations.

To meet these requirements, companies use internationally recognised standards to report against, such as ISO 14064, which sets out a framework that can easily be followed.

There is a trend towards greater transparency, and many organisations are also choosing to voluntarily disclose their GHG emissions and carbon reduction programmes on platforms such as the CDP (formerly known as the Carbon Disclosure Platform) and EcoVadis. Here a firm’s performance can be benchmarked against its peers and a high rating on these platforms is recognised as an indicator of good governance by customers, employees, funders, and other stakeholders.

Although it is no statutory requirement to have your environmental data audited there is a reputational risk if it is misleading.

Regulation over ‘Greenwashing’ has increased and firms can face heavy fines up to 10% of global turnover for consumer law infringements. Similarly, companies that deliberately choose to under report or hide their credentials, to reduce scrutiny are open to the accusation of ‘green hushing’.

Independent verification of your environment and sustainability data by a qualified and objective third-party reviewer is becoming vital to provide internal and external confidence in your data, methods, and reporting. It can also provide a robust defence for your green claims and enable your organisation to gain the highest ratings on voluntary disclosure platforms.

What is independent verification?

Many companies compile their reports inhouse, or with the assistance of external consultants, and seek the insight of an independent assessor to ‘mark their homework’ and confirm their claims.  

Verifiers are objective and use their expert knowledge to share best practice. They should be considered as partners, rather than just auditors, and a productive relationship can contribute towards your continuous improvement process.

There are two levels of verification:

Limited assurance is an entry level verification and provides a negative confirmation. A typical statement asserts: “Based on the process and procedures conducted, there is no evidence that the assertion is not materially correct and is not a fair representation of data and information; and has not been prepared in accordance with (the related standard).”

Reasonable Assurance is more comprehensive and offers the highest level of confidence. A typical statement would be: “Based on the evidence provided and the samples selected for verification, it is our opinion that the GHG assertion is materially correct based on the scope presented and is a fair representation of the GHG data and information; and was compiled in conformance with (the related standard).”

Once concluded, the verification process results in certification and a neat table for the annual report with the emissions broken down by scope and type with a number for each. This can be normalised to give tonnes of CO₂e per pound of revenue created, and in theory that can be compared to that of any business.

Benefits of carbon verification

Reputational benefits – confirms that your carbon reporting is credible, robust, transparent, and compliant.

Internal confidence and process improvement – compiling reports internally can be time consuming if the data isn’t readily available.  An experienced external verifier can confirm that the right information is being collected and help to improve environmental management systems to make them more efficient. This gives confidence to staff and management that best practice is being followed.

Cost-reduction – rigorous emissions verification can identify ‘hot spots’ where excess energy is being used and efforts can be targeted to reduce waste. In this way verified data can help to set credible net-zero targets specific to the organisation, support carbon reduction and make a positive impact to the bottom line.

Avoiding duplication of effort – once the data and methodology is verified it is accepted by other reporting platforms. Having accurate historical data will also future proof your reporting and reduce the effort required by the introduction of new frameworks.

Evidence of being a good corporate citizen – a high rating on EcoVadis or CDP is only possible with independent verification. These rating are used by investors and funders as an indication of good governance and integrity.

Support for green claims – verification gives confidence that the data collected against international standards is meaningful and complete before information is exposed to public scrutiny. This reduces risk, and potentially liability, if claims are challenged.

Attractive to supply chain partners – all reputable companies want to reduce their Scope 3 emissions and the easiest way to achieve this is by working with partners that are actively reducing their own impacts.

Access to green finance – some banks give preferential rates to companies that are reducing their climate impacts and risks.  Independent verification is essential to access this finance.

Quotes

Paddy Linighan, Chief Sustainability Officer at Clyde & Co

“Independent verification of our carbon reduction programme with Carbonology gave a second set of eyes on our reporting, and this has enabled us to be sure that the information we are disclosing is accurate and reliable. It also enhances our credentials and will help us to gain the highest level on CDP and EcoVardis.”

Chris Truss Global Sustainability Director at Reed & Mackay

“The process of verification helped me to dig deeper, crucially, it gave full visibility about where our carbon emissions were coming from and the opportunities to mitigate them.

“So, we now have a very focussed and accurate reduction plan based on real and verified numbers. This has given us validation of our processes and confidence in what we have been doing, this has made a huge difference.

“Verification by Carbonology has definitely helped give our staff visibility of the impacts they have, as individuals, on our carbon footprint. That learning has been massive and has made a real difference to our business”.

David Algar, Carbonology

“Verification is much more than a box ticking exercise. It gives confidence that any green claims are made against an internationally understood and respected framework, and they are accurate and credible. In effect, it prevents ‘greenwashing’.”

Selecting an independent verifier

Verification bodies vary in size and scope, so you need to check there is a good fit with your organisation and aspirations and their competence has been independently assessed. The CDP is internationally respected and has a stringent due diligence process for selecting its own authorised verifiers, so that is a good place to start.

Also, some banks, such as HSBC, have a recommended list of verifiers.

Next steps

Find out if you are ready for verification with a free readiness review (link).

Carbonology is a CDP accredited verification solutions provider. Its Carbonologists are experts in carbon standards and provide consultancy and training to enable clients to improve the quality and efficiency of their carbon reporting and to build capability within their in-house teams.

When it comes to independent verification and assurance, against a range of GHG standards including ISO 14064 and Net Zero transition (ISO14068), Carbonology’s in depth knowledge and friendly approach is highly respected and trusted by its clients, the financial and legal sectors, and leading disclosure platforms.  

About the Author: Melanie Blackmore, entrepreneur, CEO, podcaster, and author

Melanie Blackmore is the founder and CEO of Carbonology, a leading specialist in carbon standards.

Through consultancy and independent verification, Carbonology helps companies embrace the opportunities of the low-carbon economy, by substantiating their environmental credentials for stakeholders including regulators, customers, banks, and investors. It is a CDP verification solutions provider.

Melanie is a passionate advocate for – and communicator about – sustainability. She has led award-winning environmental projects, created a popular podcast 'The ISO Show' and hosts a webinar series featuring leaders in sustainability. She is currently conducting interviews with captains of industry as part of her Masters by Research (MRes) to deepen the understanding of the role of carbon standards in supporting businesses to achieve Net Zero.

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