Quantifying the carbon impact of a consultancy’s direct activity is steadily becoming integrated into common business practice, but what about the climate impact of advice? Waterman’s climate expert, Dave Allen, explores this conundrum and weighs-up the challenges and opportunities presented when considering how best to capture downstream carbon metrics associated with environmental and engineering consultancy services.
As part of Waterman’s commitment to climate action, we’ve pledged to measure and reduce our emissions. Our GHG emission boundary includes direct emissions from our company offices and vehicles, purchased electricity for powering our offices, and upstream emissions relating to our supply chain, including the business travel of our staff.
However, more organisations like us are looking at what impact they can have in the wider value chain to support the transition to a Net Zero economy. Whether it’s responding to legal obligations like the Corporate Sustainability Reporting Directive or other stakeholder obligations, or simply trying to align with new opportunities within a potential Net Zero future economy, organisations are not only looking at sustainable procurement and upstream carbon emissions but also trying to better understand the downstream impact of their business model.
Downstream emissions of professional services businesses similar to Waterman typically arise from the use of service outputs and relate to how client actions informed or enabled by our services, contribute to GHG emissions. This can be either directly – for example, energy efficiency recommendations in consulting may directly influence emissions from operations implemented by clients – or indirectly, for example, emissions from products built or processes optimised based on our professional advice.
However, the actual impact of specific professional services on a client’s project, product or process can often be relatively unquantifiable. As a result, any measurement of potential changes to the carbon emissions which can be attributed to a client’s use of our professional services is fraught with difficulty. In addition, the sheer number and diversity of projects that Waterman delivers over a year also makes quantification challenging.
So how might we tackle this particular conundrum? There are a number of questions and assumptions we’d need to consider before we could start to address this.
Could we make assumptions by service line or sector?
For instance, can we suggest that our transport consultancy services have a certain percentage associated with active travel or electrification, or that our building services advice is 100% reflective of Net Zero requirements and therefore make some estimate as to ‘Net Zero supportive’ turnover in those sectors?
Could we make judgements based on client climate change performance data?
If suitable data were available, could we make calculations based on an assessment of the proportion of a client’s turnover that is taxonomy-aligned to climate change mitigation?
Could we make judgements based specifically on the projects themselves?
Would it be possible to estimate total carbon emissions of the project and allocate these based on the fee or the specific activity being carried out? Advised emissions might be allocated by fee percentage, while designed emissions could be based on the project element delivered. A representative sample of projects is assessed and extrapolated to provide an indicative downstream carbon impact assessment.
Ultimately, assessing this downstream carbon impact would need to be standardised and quantified in some way, so we could potentially consider:
- % Fee or turnover considered to be ‘Net Zero ‘supportive’
- % Fee or turnover considered to be taxonomy aligned
- Or even as tCO2e per £ turnover
As with any performance indicator, it’s vital to remember the outcome or goal you are trying to measure progress against.
One major concern is how measurement of current performance would drive improvement in future performance, and how this might shape business practice. For example, does an organisation focus only on Net Zero services? Should they only engage with taxonomy aligned clients, and would they only support projects based on their likely carbon cost? I suspect the answer in many cases would be ‘probably not’, but they are certainly considerations in our overall business risk management matrix.
The current raft of sustainability directives – CSRD, CSDD, EU Taxonomy – were all designed to try to help the flow of capital towards sustainable value creation. Whether these policies survive in their current state given the recent more hostile global outlook is a matter of conjecture. However, its undeniable that building resilience into business models and thriving in a future world economy certain to be climate impacted will require consideration of wider value chains. This will mean taking steps to estimate the associated downstream impact of your business output to enable more informed strategies for reducing emissions and enhancing sustainability.
