Understanding the language of a sustainability manager

If you work in sustainability, you probably often hear, “Nice, you are doing something for the environment!” or “so you are taking care of recycling in your company?”. The term “sustainability” is often associated with environmental topics although it covers many more areas. And even though it is finally not a niche topic anymore, there are many frameworks and acronyms behind it, that you might have never heard about. 

As a growing number of companies is moving towards a sustainable path to adopt the increasing demand from customers, employees and investors, or simply to refine the purpose of their company, sustainability managers are hired externally as well as internally. No matter if you are new to the topic and want to introduce it within your company or you are an expert in the field of sustainability and you aim to make your colleagues and management to understand your language: this guide will help you shed light on the different terms, standards and abbreviations connected to the topic. 

Let’s start with the basics: Sustainability is not just about the environment. Even though it derives from forestry, it means meeting the needs of the present without compromising the ability of future generations to meet their needs. In business it is often integrated applying the concept of the triple-bottom-line – a phrase introduced by John Elkington in 1994. It describes the financial, social and environmental ‘bottom lines’ of companies. In principle it is designed for companies to value their social and environmental profits and losses, as well as the financial ones: Companies that define their purpose beyond making financial profits, but also profiting society and the planet. This leads us to the first concept. 

CSR

Ranging from voluntary activities to a comprehensive sustainability strategy, corporate social responsibility includes the measures introduced by a company to take responsibility for society in general. There is no official standard or requirement connected to the term, it is rather a business concept. However, CSR efforts often describe rather add-on activities next to the core business, while an integrated sustainability strategy drives the core business values and activities and is therefore more holistic. 

ESG is the abbreviation for environmental, social, and governance. It provides criteria, especially for investors, to help find companies with values that match their own and to include not only the economic performance but also environmental and social performance into the investment decision. Environmental criteria may include the energy use of a company, the amount of waste and pollution, natural resource conservation, and their carbon emissions. Social criteria focus on the working conditions, for example, equal opportunities, health and safety at work. Criteria for governance can include business ethics, compliance, independence of the Supervisory Board, salaries, and shareholder structure. 

The term is not connected to a specific standard. It rather helps organisations to cluster their impact and activities into the three relevant areas. Not a single company will pass every test in every category, so the investors need to decide what their priority is. ESG investing is sometimes referred to as sustainable investing, responsible investing, impact investing, or socially responsible investing.

To differentiate between the two terms: While CSR (corporate social responsibility) is a businesses self-regulated way of contributing to societal goals, ESG (environmental, social and governance), on the other hand measures a company’s activities to assess its precise actions. 

There are enough reasons for every company – SMEs and corporates – to engage in sustainability activities and talk about them. However, for corporates from 500 employees upwards, the EU has introduced a Directive to report on so-called “public-interest-entities”, which include ESG criteria and are encouraged to align the reporting with recognized standards. There are a few organisations that provide standards and support with the structure and scope of your CSR report. Some smaller companies, who are not obliged to report by the EU, but have a truly purpose-driven mindset voluntarily publish a so-called impact report. 

Global Reporting Initiative – GRI

One of the providers of CSR reporting standards is the Global Reporting Initiative. Founded in 1997, the GRI provides the most comprehensive and transparent standardization for CSR activities. The standard helps companies to report about all their impact-driven indicators such as diversity, human-rights, pollution and carbon emissions. The latter can be measured through Planetly’s services, which are aligned with the GHG Protocol – the international standard for carbon calculations, which is explained further below. 

UN Global Compact – COP 

“Transparency builds trust” is the slogan by the UN Global Compact – A United Nations initiative for companies on sustainable business activities. Their reporting standard “Communication of Progress (COP)”, not to be confused with the annual climate conference COP (Conference of the parties), guides and supports companies to report on their sustainability progress towards external stakeholders. 

Deutscher Nachhaltigkeitskodex – DNK 

German companies also have access to an additional cross-sector standard for reporting corporate activities in the field of sustainability: The “Deutsche Nachhaltigkeitskodex (DNK)” provides a reporting framework for all companies, regardless of their size and legal form. In order to meet the requirements of the DNK, companies must report on 20 criteria, each with up to two performance indicators relating to environmental and social aspects and corporate governance. The performance indicators are selected from the Global Reporting Initiative (GRI) and European Federation of Financial Analysts Societies (EFFAS).

CDP (formerly the Carbon Disclosure Project) is a UK-based non-profit organization that discloses the environmental footprint for investors, companies, cities or states and therefore focuses on climate specific reporting. The organization collects the environmental performance on climate change, water treatment and deforestation of their members through a standardized process on a yearly basis. The information can be transferred into e.g. the GRI report or reports based on ESG criteria. 

Looking through the reporting standard landscape is one thing, in addition to that, there are many organisations providing tools and standards for measurement and communication of sustainability KPIs. At Planetly we have developed a technical software for carbon analysis that is in line with GHG Protocol.

Greenhouse Gas Protocol – GHG Protocol

The GHG-Protocol is another global standardized framework that provides detailed guidelines on how to measure GHG emissions from private and public sector operations, value chains, and mitigation actions. The framework divides emissions in three scopes ranging from on-site emissions of a production site to detailed measurements of emissions occurring along the value chain of a company. 

Science Based Target Initiative – SBT

Knowing an organisation’s footprint and reporting the outcome is not enough to tackle the climate crises, therefore most companies have set reduction targets and partly align them with the science-based-targets. The term differs from regular corporate targets because SBTs are based on scientific calculations and findings and are designed to achieve the target of either 1.5°C or a maximum of 2°C warming.  The limit is set by climate scientists and the UNFCCC (United Nations Framework Convention on Climate Change) to avoid significant and potentially catastrophic changes to the earth’s ecosystem. 

Sustainable Development Goals – SDGs

Lastly, zooming back to the overall sustainable development vision, you might regulary stumble over the SDGs. The sustainable development goals, also global goals, designed by the United Nations, are common targets defined and signed by all member states in 2015. The 17 SDGs aim to combat various global challenges, including the goal of ending poverty, protecting nature and ensuring equal rights for all. The UN strongly encourages organizations to work with the goals in streamlining their sustainability activities and communicate them through the goals. 

How to reduce carbon emissions in your company

Every year, almost 41 gigatons of carbon are emitted worldwide. In order to achieve the international goal of limiting global warming to 2° Celsius, the carbon budget we as humans have left is only between 600 and 800 Gt carbon by 2050. This 2°C-target was adopted at the 2015 Climate Conference in Paris, and all participating nations have developed individual reduction paths based on it. Since these regulations increasingly affect a variety of industries, it is up to the companies themselves to develop and implement reduction measures.

Carbon footprint analysis and target setting 

In order to implement appropriate measures, the first step is for companies to determine their carbon footprint and thus identify the main emission drivers. To find out how this is done, read our article “How do you analyze the carbon footprint of your company?”. Creating transparency is fundamental to avoiding and reducing emissions. 

After a successful analysis, the next step is to set clear targets and objectives in order to implement effective and cost-efficient reduction measures. These targets are not only necessary for climate action, but also to manage reputational risks or to be prepared for future regulations.  

Reduction measures 

Many companies are already interested in implementing quick and effective measures. The options for doing so vary depending on the size and complexity of the companies’ value chain. Every company, however, can make changes that can have an imminent effect, especially in parts of their value chain that they can directly influence. This article focuses on Scope 1 and 2 emissions, which result from the direct combustion of fossil fuels, as well as indirect emissions from the consumption of purchased electrical and thermal energy. However, some Scope 3 emissions, especially those that are caused by employees and the office, among other things, also have great potential to be addressed directly. For manufacturing and service sector companies, emissions during the use of the sold products are a particularly significant factor. Optimized design can both improve the energy efficiency of products and reduce emissions – two clear advantages for customers.

At the end of this article, we have prepared a checklist to help you implement the right measures to effectively reduce carbon emissions in your company. 

Buildings

In Germany, about 30% of carbon emissions are generated in buildings. Within the framework of the German government’s climate action targets, these must be significantly reduced by 2030, including in the commercial property sector. In buildings, such as your office, emissions are caused by electricity and heat consumption. In order to reduce thermal energy use, it is worth considering energy-conserving renovations, such as insulating your building so that less heating is required in winter. Despite the initial investment, this kind of activity can save money in the long term. Moreover, many of these investment measures are eligible for KfW grants and subsidies as part of the German government’s climate action package. You can apply for funding for both the initial consultation by accredited energy efficiency consultants and loans for the implementation of recommended activities.

If you do not own the buildings, you probably cannot renovate them. Nevertheless, it is worth talking to the owner – perhaps they are interested in modernizing their property and you can reach an agreement. Contact us and we will help you to find the right partner. 

Electricity

In order to meet electricity needs in a more sustainable manner, you can switch to a certified renewable electricity provider or off-grid solutions, such as using photovoltaic panels. For the former, independent suppliers are preferable because some of the large energy companies which produce and sell 80% of the electricity in Germany continue to lobby for fossil fuels. Smaller suppliers such as Lichtblick or Bürgerwerke, on the other hand, are actively promoting the expansion of renewable energies and thus sustainably reducing their customers’ carbon footprint. The same applies to suppliers of heating gas. Please contact us if you are interested in switching – we will be happy to help you find the right partner and you will benefit from attractive rates.

Energy efficiency

In addition to improving your carbon footprint, improving energy efficiency can also reduce costs considerably. Smart solutions for heating and lighting can adapt the energy supply to match the working hours of employees. This not only saves up to 25% of costs (according to a study by the German Federal Ministry of Commerce), but also reduces emissions.  

Server

If you work with large amounts of data or if your offering consists mainly of software services, you will certainly use data centres to process and store your data. Data centers are responsible for about 2% of the world’s greenhouse gas emissions, and this number is likely to grow as digitization progresses and the demand for digital services grows. Companies do not usually operate their own data centres, but can still reduce their carbon footprint by switching to a carbon neutral cloud provider or making their website carbon neutral.

Mobility 

Mobility emissions are caused mainly by employees commuting and going on business trips. Any form of mobility in which conventional fuels are burned or non-renewable electrical energy is used is harmful to the climate. This takes into account not only the company’s internal fleet, but also the commuting of employees and the business trips they take. 

Business travel

Especially for companies that have little to do with material goods but offer services and frequently visit customers in person, the type of transport can play a decisive role in the carbon footprint. Many personal meetings are not absolutely necessary. Instead, telephone calls or online meetings can lead to the same result. Thus, in addition to significant cost savings, emissions caused by hotel stays can also be avoided. For meetings that cannot be avoided, train connections should be preferred whenever possible. Another advantage here: In addition to the emission savings, the time spent on the train can also be used to work in a focused manner.

Commuting

In addition to business trips, the influence of commuting on the climate should not be underestimated. Many employees travel to work by car, whether in rural or urban areas. This increases not only emissions but also noise and stress levels, especially in the city. Here it is increasingly worthwhile offering employees the freedom to work from home. In Germany alone, suspending the daily commute to work can lead to a saving of 850 million kilograms of carbon per year if only 10% of the workforce work from home one single day a week. 

In addition, you can give your employees incentives to switch to public transport by making a financial contribution to their public transport subscription.

But the best option for a small carbon footprint is if your employees cycle to work. Leasing company bicycles is becoming increasingly popular and you can claim a tax break through salary conversion. Many federal states now promote the leasing of company bicycles for some public service professions. 

Emissions in office operation 

Catering

Many companies offer food and drinks such as coffee and fruit to their employees. While these products make workers happy, they also release emissions over their life cycle. At Planetly, we have calculated how simple changes in purchasing can achieve carbon emissions reductions.

For example, by switching from cow’s milk to oat milk, 40.6% of carbon emissions in milk consumption can be avoided. Vegan or vegetarian lunches should also be promoted, as these are generally not only healthier but also more climate-friendly: meat production is responsible for 14.5% of global emissions.

The US company WeWork has therefore decided to take a drastic step in 2018: Employees will only receive lunch reimbursements from business trips if they choose vegetarian food. 

Waste production 

Waste separation is no longer a new topic. Nevertheless, some offices are not yet or only partially doing it. A prerequisite for this is, of course, sufficient and suitable waste bins, but also information and training of employees as to what and how to separate. The new German Commercial Waste Ordinance has made waste separation obligatory in workshops since 2018.

Involvement of employees 

It is important that employees adhere to the measures and develop an understanding and acceptance for them. A climate strategy can only be successful if everyone works together. Climate action should not just be a vision, but firmly anchored within the corporate culture. Training courses, employee education, and innovative ideas, such as establishing sustainability boards or idea pools, can help to achieve this goal. 

The checklist for your company

As you can see, there are many mechanisms that can be implemented in a more or less rapid manner, but all of them lead to a reduction in emissions. Many of them not only result in an improved climate balance, but also lead to long-term cost savings and increased well-being of employees. By pursuing a strict internal climate policy, you are also preparing for increasing legal regulations and growing pressure from customers, investors, and employees. 

Office: 

▢ Change to an independent renewable electricity provider 

▢ Off-Grid solutions, e.g. photovoltaic modules

▢ Increase energy efficiency through smart home solutions

▢ After work: daily check that all lights, power strips, and electrical appliances are switched off (not in stand-by mode) and all windows are closed 

▢ Efficient use of heating and air conditioning: heating / air conditioning only on when all windows are closed

▢ Replace old light bulbs with LED lighting

▢ Energy-efficient renovation (walls, windows, doors)

▢ Switch to a carbon-neutral cloud provider

▢ Switch to climate-friendly food and drink (regional, seasonal, meatless) 

▢ Waste separation 

Mobility: 

▢ Avoid unnecessary business trips and replace them with online meetings

▢ Use rail connections for necessary business trips and corporate events 

▢ Compensation for unavoidable business travel by air

▢ If possible: introduction of home office days

▢ Offer business bicycles 

▢ Subsidy for public transport tickets  

▢ Carpooling platform for employees

▢ Fuel-efficient company cars (and conversion to an electric fleet)

Employee commitment:

▢ Employee training on in-house climate action

▢ Sustainability Board

▢ Regular implementation of idea pools to collect climate action proposals

Climate action strategy:

▢ Increasing the energy efficiency of the products offered (Optimized product design)

▢ Analysis of the carbon footprint 

▢ Identification of the largest in-house issuers

▢ If possible: Reduction of internal emissions

▢ Compensation of unavoidable emissions

Planetly helps you analyse your carbon footprint with intelligent software, offset it through the purchase of emission reduction certificates, develop customized carbon reduction strategies, and track their results with our software. We are looking forward to your message.

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