Climate change is a global challenge with serious consequences for our social and economic infrastructure as well as the natural environment. The greenhouse gas (GHG) emissions that cause climate change are emitted mainly from burning fossil fuels such as coal, oil and natural gas. Because heavy industry is a leading source of GHG emissions, most of the business-focused programs responding to the problem emphasize participation by “emitters,” manufacturers and utilities. Action by industry alone, however, is not enough. Long-term solutions require emission reduction efforts by the entire economy, and this publication addresses service-sector companies such as banks, law firms, retailers, and real estate managers. Even though they are not considered large emitters, these companies do emit GHGs and can help mitigate climate change through changes in their energy use and the products and services they offer.
The most common greenhouse gas is carbon dioxide (CO2) and two of the largest global sources are electricity and heat (32 percent) and transportation (17 percent). (1) Service-sector companies’ activities contribute to these sources through their electricity use, heating, cooling and travel. They may also contribute to other large global CO2 emission sources such as land use change and forestry (24 percent) and manufacturing and construction (13 percent). (2) Service-sector companies have an opportunity to infl uence their operations, supply chains, customers, employees, and other stakeholders and to help change those behaviors necessary to curb the most dangerous effects of climate change.
To provide the context for service-sector companies’ action, this guide begins with:
- A brief overview of climate change science and expected impacts. This section describes climate change and why it is occurring, and summarizes some of the anticipated consequences, such as more intense weather events, water and food shortages, and possible changes in the geographic distribution of some infectious diseases.
- An outline of the connection between climate change and the service sector and the reasons that service-sector companies should take action. This section explains how service-sector companies contribute to global GHG emissions and the economic dangers of climate change that they face. Then we discuss the “business case” for service-sector companies to take action. At the outset, the business must develop a case for taking action and determine its goals for a program responding to climate change. Why should the company undertake this activity? What are the risks of undertaking or not undertaking it? What will the return on its investment be? What are the shortand long-term benefi ts for the company? How will its stakeholders react?
These sections are followed by a step-by-step manual for service-sector businesses ready to begin responding to climate change.
Planning your GHG inventory
In order to affect climate change, GHG emissions must be reduced, which service-sector companies can do by changing their energy use as well as the products and services they provide. In order for companies to track their performance and ensure that their actions do reduce their GHG emissions, they must measure them by developing a GHG inventory, a list of the sources of their GHG emissions and their quantities. This inventory is the foundation of an effective corporate climate change program. Measurement enables businesses to assess their risks and opportunities, follow their progress, and create a strategy to reduce emissions by measurable amounts.
To start, resources must be assigned, emission sources identified, and data gathered. Those staff charged with this task must be familiar with their company’s organizational structure, for example, partnerships, joint ventures, or other organizational subunits of the parent company, so they can identify its emission-generating activities and associated sources of emissions. For example, will the company include emissions from transportation? Will this include all transportation, such as business trips to meetings and conferences, product distribution, and employees commuting to and from work, or just some of these? Will all the sources of energy that the business uses, such as electricity or other fuels for heating and cooling be included? Does the company lease assets such as buildings and vehicles that should be included in the inventory? The staff should use a framework based on the World Resources Institute/World Business Council for Sustainable Development’s GHG Protocol Corporate Accounting and Reporting Standard (revised edition) (GHG Protocol) to make decisions that are comparable to those made by other businesses.
Developing your GHG inventory
Once your company has decided on a strategy for measuring emissions, it can begin developing its GHG inventory by collecting and managing data. First the company must decide for which year it is gathering information and then determine what information is needed for each emission source and where to find it. For example, is it best to start by gathering data for the current year, the previous year, or another year? How does the company measure electricity, and where can it find how much electricity each business unit uses? Are there circumstances under which this information may be estimated? Each emission source has a corresponding emission factor, how are these factors applied and where are they found? Companies must devise a way to collect this information efficiently, as well as a system to store and manage it. How best can a data management system ensure the quality of the data?
Once information is gathered about each emission source, the company can begin calculating its emissions. Although this is relatively simple, the company must be careful not to make errors that can cause inaccuracies in the inventory, such as mistakes in data entry or basic math. How should the company make these calculations? Will it create its own tools or save time and resources by using established tools such as those provided by the GHG Protocol?
Managing your GHG emissions
Once your company has measured its emissions, it can start to manage them. Its GHG inventory will help determine the best emission reduction opportunities. For example, is it better to reduce its own electricity use or to infl uence supply chain emissions? What other solutions might be feasible? What about obtaining energy from renewable sources, moving to green buildings, or improving vehicles’ fuel efficiency? The company also should fix an emission reduction target to demonstrate to its stakeholders its commitment and intentions and to track its progress through public reporting. What are the reasons for establishing a target, and how does a company decide what type of target to set? What information should be included in a company’s public GHG inventory report?
This guide answers all these questions according to the established framework of the GHG Protocol, to ensure that service-sector companies develop effective climate change response strategies that are compatible with both others in the business community and voluntary and mandatory climate change programs.
1. See World Resources Institute, Climate Analysis Indicators Tool (CAIT), version 3.0 (Washington, DC: World Resources Institute, 2006). Transportation emissions include international transport emissions, referred to as “international bunkers.”