Towards a standard approach to carbon accounting in UK manufacturing

We’re pleased to be launching our joint research report Cross-sector carbon accounting standards research with the British Standards Institution (BSI) today. The report marks an important milestone on our journey towards a standardised framework to carbon accounting in UK manufacturing.

Why do we need a standard approach to carbon accounting?

We want to establish the UK as an onshoring or greenshoring destination for manufacturing, a place where materials and components are manufactured in the most environmentally sustainable, lowest emissions way.  But we know that greenshoring can only happen once we have a trusted and transparent carbon accounting framework in place – one that supports, and is supported, by both industry and policymakers.

The current carbon accounting problem

Our problem is that we’re a long way off having any such framework in place. Instead, when we look at current practice, it’s rife with confusion due to the plethora of different tools and standards available – often conflicting in their definitions and methodologies, on top of the huge number and variety of requests for emissions information at both the organisational and product level.

To sum up in numbers alone, our report identified 575 unique carbon accounting standards across four key sectors of interest. It’s no surprise that industry representatives consistently say they get lost with the sheer number of standards and guidance – just getting into the swing of carrying out one approach, when further guidance is published. Meeting such demands requires a huge commitment of time, resource and investment for companies.

The burden of carbon accounting is being placed onto manufacturing companies of all sizes.  Large companies must report Scope 1 and 2 emissions, and are coming under increasing pressure to report Scope 3 emissions; however, the approach and methods available to do so are, as mentioned, conflicting and inconsistent – preventing comparisons from being made.  The review of existing standards in this report reinforces this message, suggesting sector specific approaches are becoming commonplace, adding further to the complexity of the landscape.

SMEs in particular report a struggle with accessing the knowledge and resources required to account and report emissions of any Scope. There is no coherent or co-ordinated approach that provides the overall baseline needed to make significant, positive differences that drive real progress towards becoming the lowest carbon emissions region that we intend to become – that we absolutely must become given our national legal targets for net zero.

Working towards a carbon accounting solution

A standardised framework would enable manufacturers to benchmark and evidence the embodied carbon in their goods, supply chains and factories, whilst making informed decisions about decarbonisation action and provide evidence to the market about the results of such action. A standardised framework to generate and report trusted data is essential.

So, what are we doing?

This report gives us a robust baseline of information and insight from across multiple sectors, allowing us to understand the scale of problem in more detail. We know, as Dr Danial Sturge and Elle Butterworth of Energy Systems Catapult point out in their recent blog that a ‘one size fits all’ approach is difficult and that some flexibility will always be necessary, but the flexibility within existing practices is disjointed, often overly vague and open to too much interpretation. It has led to a complex web of standards, methodologies and reporting requirements.

So, in line with the findings of the report, we already have several recommendations in train as part of our Innovate UK funded Carbon Accounting Programme, which is now well underway.  In partnership with Connected Places Catapult, Digital Catapult, Energy Systems Catapult and Satellite Applications Catapult, the Carbon Accounting programme is working towards a standardised carbon equivalent framework suitable for all UK manufacturers regardless of size, sector or place in their supply chain.  The programme also considers the longer-term impact that introducing a standardised framework would have – for the benefit of industry, the economy and all importantly, our planet’s environment.

The work we’re doing will reduce the reporting burden on companies, allowing them to get on with the exciting, innovative work to decarbonise their processes and supply chains, rather than just gathering data. Ultimately this supports the overarching goal of greenshoring more sustainable, lower-emission manufacturing – providing a much greater incentive for more investment in UK companies.

In summary, industry is looking for us to take the bull by the horns and work collaboratively to drive forward a national, standardised carbon accounting framework. So, we’ve set out to do just that and I’m looking forward to sharing more information over the coming months on our Carbon Accounting programme, its vision and roadmap.