Dr Nicole Dando
Circular Economy Measurement & Reporting Lead, Ellen MacArthur Foundation
Businesses, and their investors, want to know how shifting to circular ways of doing business impacts their climate targets.
Imagine baking a cake with only half a recipe, watching a film after missing the first act or hiking with the wrong map. It’s impossible to imagine success without having the full picture. The story is no different with the battle to reduce global greenhouse gas (GHG) emissions.
Track, measure and report GHG emissions
Estimates suggest that energy efficiency and the transition to renewables will only account for 55% of global emissions. To address the remaining 45%, we need to change how we make and use products, materials and food.
As organisations shift their business from linear to circular, they must be able to accurately track, measure, and report the impact on their GHG emissions and broader business strategy.
Estimates suggest that energy efficiency
and the transition to renewables will only
account for 55% of global emissions.
Measurement standard overlooks circularity
Existing methodologies, such as the GHG Protocol — the world’s most widely used emissions accounting framework — have many positive attributes but were built on linear business practice assumptions and therefore largely overlook circular economy solutions. For instance, companies are penalised when extending product durability due to having to report increases in lifetime emissions. This is counterproductive to encouraging business strategies, which are designed to keep materials in use, and needs to be addressed.
Revise emissions accounting for circularity
A recent insights paper by the Ellen MacArthur Foundation, ‘Improving climate emissions accounting to accelerate the circular economy transition,’ sets out five areas of emissions accounting that can be revised to ensure that the emissions impact of circular business models can be fairly and accurately evaluated. Business leaders, alongside investors, policymakers and other stakeholders can support these revisions as the GHG Protocol updates its suite of standards and guidance over the next year.
In a world where accurate insights and reporting are more critical than ever in demonstrating meaningful progress in tackling climate targets, businesses must have the full picture to continue demonstrating the importance of the circular economy in climate action.
Visit ellenmacarthurfoundation.org/ghg-emissions-accounting to learn more.
