The immediate challenge

We’ve outlined elsewhere how carbon auditing is complex and the devil is in the detail — and why complexity is no excuse for inaction.

See Through Carbon’s standard is based on impartial advice volunteered by world-class experts. Not being paid guarantees our integrity, and being open course means we can incorporate the best-available practice. Ultimately, the quality of See Through Carbon’s reporting and scoring system depends on the See Through Carbon Trust Trustees.

The Trustees are experts in the complexities, technology, methodology, nuances, loopholes, pitfalls and challenges of carbon auditing.

In the interests of transparency, See Through Carbon makes their work and judgements visible for robust interrogation by anyone with a view, through articles such as these, as well as more detailed information provided for carbon auditing experts to examine.

In the interests of clarity, this article seeks to explain their role and responsibilities to non-experts.

Who Decides?

The See Through Carbon Trust sets all the parameters for the carbon calculations. These include: continuously improving See Through Carbon by deciding which new databases, methodologies and resources to integrate. designing the in-app questionnaire used to gather data, and optimising it for convenience, business size, sector and accuracy. reviewing the weightings required by the algorithm that generates the absolute scores required for ESG reporting determining the algorithm that generates the relative scores, for the 1 – 100 scale and Green/​Amber/​Red grade boundaries.

As See Through Carbon grows, the Trust will expand to include a wide range of specialisms. For the Pilot the See Through Carbon Trust is composed of: Dr.Renuka Thakore Dr. Joe Jack Williams * Robert Stern (Chair)

What will the Trust decide?

The Trust determines two separate standards, serving different purposes.

Absolute Standard:

Description:
  • the basis for calculating true carbon footprints as accurately as current best practice, data and technology permit.
Purpose:
  • to eliminate greenwashing, and reflect real-world physic, by providing a total impact global warming impact from a business.
Output Metric:
  • mass of CO2 equivalent
Target Audience:
  • the SMEs themselves, to empower them with an accurate picture of their real carbon footprint
  • the SMEs’ customers, who increasingly demand accurate carbon calculations from their supply chain

Relative Standard

Description:
  • the basis for creating an easily comprehensible, evidence-based system that allows businesses within a similar sector to be compared.
Purpose:

To create a simple, consistent, fair, transparent system to incentivise SMEs to measurably reduce carbon over time. It: reflects real carbon impacts fairly compares different types of businesses * incentivizes businesses to measurably reduce carbon

Output Metrics:
  • generating the Pilot’s 0 – 100 score
  • determining grade boundaries for the Green/​Amber/​Red ratings
Target audience:
  • SMEs’ customers, empowering them to assess local businesses based on their actual carbon emissions.
  • SMEs’ competitors, empowering them to compare themselves with their peers

Transparency

As outlined in our explanatory video , there’s a huge gap between the standards demanded by financial reporting and carbon reporting. The latter is currently rudimentary, inconsistent, erratically applied, and barely enforced.

Bridging the gap to the rigour of financial reporting requires a very steep learning curve for all parties, for which clarity and transparency is essential.

Carbon auditing, especially in its current form, is an inexact process, requiring a range of estimates, approximations, blanket factors, and generalisations. Standards will improve as these practical estimates are gradually replaced by specific, granular data. This is a dynamic, iterative, trial-and-error process, requiring constant updating and application of best practice as it emerges.

This can best be achieved by making the methodology transparent and open source. This allows anyone to see how our standard works, and suggest improvements. The Trustees can then incorporate any suggested improvements they consider reasonable and practicable.

See Through Carbon’s algorithm, rationale, and debate will always be made public, and never proprietary. This is the foundation of its credibility.

Major challenges

The current reality of carbon auditing means the Trust will face many challenges to use its collective judgement to deliver the fairest and most evidence-based outputs possible. Examples of the kinds of decisions the Trustees will have to make include:

Absolute Standard Issues

The challenges of accurately measuring carbon footprints are many, complex, and constantly evolving.

See Through Carbon’s Trustees will incorporate best-available open source solutions into its methodology and algorithm as they become available. For example:

Energy factors:

Energy use is the largest single source of most carbon emissions. The optimal, most specific solution is to calculate the actual energy consumed by any business on a real-time basis. This is currently impractical, so approximate factors’ are applied at various levels (national, regional, local, company-specific) to make these estimates as accurate as is feasible. The more granular, the more any reduction will be reflected in an individual SME’s score, and the greater their incentive to lower their emissions — though the best way is to use less energy, whatever the source.

Sector Specific:

Certain sectors, such as construction, retail and hospitality, are developing their own open source ways to improve the accuracy of carbon measurement specific to their industry. These too can be incorporated into the See Through Carbon standard as they become available.

Relative Standard Issues

Absolute Achievement v. Relative Improvement:

The algorithm should reward SMEs that start and remain at a low carbon intensity, and those that can prove rapid improvement. As the general level of carbon intensity diminished, these goal posts may have to be incrementally moved.

Grade Distribution

A system that generates 100% Red or 100% Green wouldn’t meet the goal of incentivising SMEs, so the Green/​Amber/​Red grade boundaries must deliver a reasonable spread of these categories

Possible solutions include an exam-board’ type allocation of a certain percentage of Green/​Amber/​Red for each grade, a sector-based relative ranking which favours early adopters, but requires them to keep ahead of their peers to maintain their Green status, or some combination of the two.

Sector Comparison

Some kind of weighting has to be applied to reward relative improvement in sectors of different carbon intensity.

See Through Carbon’s standard is designed to be flexible and responsive to proven new opportunities as they emerge.

The biggest challenge

Carbon reporting has a long way to go before it can reach the rigour and enforcement of financial reporting, but has the advantage of the model the latter provides.

Whatever our sustainable future may be, it will depend on valuing our environment over our bank accounts. See Through Carbon is a step on that path.