How Has COVID-19 Changed the Way We Think About Corporate Emissions?
by Derek Six, Chief Business Officer | October 22nd, 2020
Like many companies with office-based employees, ClimeCo has mostly had its staff working remotely over the past six months. Over the next year, I suspect many firms will have some employees return to the office, but I think there will be a portion of office jobs that will permanently telecommute. Both employers and employees have discovered that it is possible to be productive at home, and that the time saved from commuting is a valuable resource. With more employees working from home now than before, I started to think about what carbon footprints may look like for companies and how this has likely changed since their employees have shifted from company facilities to off-site locations.
Emissions in 2020 vs. 2019
For many years, ClimeCo has committed to reducing its emissions as much as practical and to offset the rest each year. I am guessing that when we perform our emissions accounting for 2020, the total will be substantially lower than in 2019. Most of this will result from reduced travel to conferences and sales meetings, but a part of this will also be due to the lower use of electricity and natural gas at our office locations. I think other companies will find the same when they do their accounting for 2020 – less energy used on-site; reduced heating and cooling costs; reduced purchases of office, breakroom, and bathroom supplies; and less spent on office space maintenance.
For companies that do extensive GHG reporting, this may bring cheers: “Look how much we reduced our emissions in 2020!”. But is that true? Or did we shift these same emissions to the homes of our employees?
Computers, monitors, lights, and coffee makers are buzzing between 9 and 5 each weekday at telecommuters’ homes across the country. What responsibility do companies have for these employee emissions? Even in “normal” times, should companies think more about employee emissions and employee health and sustainability issues than they previously have? Could companies make a more significant impact by leveraging their size and scale to address employee sustainability issues at home?
Making a Bigger Impact
Stephen Bay, CEO of EarthUP, Inc., and Stacy Smedley, Skanska’s Director of Sustainability, recently introduced me to a new concept which they call “Scope 4 Emissions”. For those of you unfamiliar with GHG reporting, companies typically have considered the following 3 Scopes described in the Greenhouse Gas Protocol:
- Scope 1 – Direct Emissions: on-site fuel combustion, transport fuels for fleet vehicles, air conditioning leaks, etc., things that are under the direct control of the facility
- Scope 2 – Indirect Emissions: purchased electricity, heat, and steam
- Scope 3 – Other Indirect Emissions: business travel, waste, water use, purchased goods, services, etc.
Stacy and Stephen suggest that Scope 4 would include emissions from employee energy use, employee waste, and employee commuting.
Why is their concept of Scope 4 emissions compelling to me? In times of COVID-19 telecommuting, the answer is easy – companies should take responsibility for the shifted emissions resulting from employees working from home. But even in more “normal” times, I think there is still a compelling argument to do this. Companies could make a significant impact on global emissions by assisting the employees to address household emissions. A thoughtful strategy for doing this could include helping employees improve indoor air quality in their homes, reduce their energy bills and waste, as well as improve their quality of life, all while saving them money.
Many companies have found that reducing their corporate emissions by just a little bit is pretty easy and generally profitable, as simple solutions like installing programmable thermostats and more efficient lighting in the office can save them a lot of money; however, as the reduction goals become more ambitious, solutions tend to become more challenging. Why not widen the net, so to speak, to allow companies to impact employees’ lives significantly? Wouldn’t this lead to improved employee retention, reduced employee healthcare costs, and increased employee satisfaction and productivity?
For me, taking some responsibility for emissions of telecommuting employees is arguably necessary for any company committed to accurate GHG reporting, but taking additional responsibility for their employee emissions may be good business.
About the Author
Derek Six serves as Chief Business Officer at ClimeCo, where he leads the company’s cross-cutting business functions, as well as the firm’s ODS management program and private equity fund. He holds an MBA in investment management and portfolio analysis from Pennsylvania State University’s Smeal College of Business.