Greenwash already damages businesses. Adopt See Through Carbon’s reporting framework to future-proof your stock price, ROI, HR & reputation

Like bear baiting, slavery, voting for women and gay marriage, corporate carbon reporting is at a crisis point. See Through Carbon is an innovative framework to future-proof businesses as the Age of Voluntary enters the Age of Compliance. 

First society changes, then laws

Things are fine until they’re not. What was once accepted becomes unacceptable.

Henry VIII was so keen on bear-baiting, he set up a pit at his Whitehall Palace. His daughter, Queen Elizabeth, was also an aficionado, attending bear-baiting as well as plays by hot dramatist William Shakespeare. When some godly Parliamentarians suggested banning the practice on Sundays, Queen Bess overruled them.

A couple of centuries later, bear-baiting had become so unpalatable, the British Parliament passed the Cruelty to Animals Act 1835, following other European countries by banning what had for so long been considered a ‘sport’.

Societal reforms follow the same phase shift pattern: 

1. Embraced
2. Not OK
3. Regulated
4. Illegal
5. Anathema

Hindsight makes these inflection points easy to identify. We can plot all 5 phases for former controversies that have reached the Anathema phase: slavery, votes for women, black civil rights. 

Note that these goods-turned-evils can still exist at Phase 5 (Anathema), just as many people in any given locale can disapprove of them before Phase 3 (Regulated). In all cases, the closer they are to the time we live in, the more ‘controversial’ they appear.

Same-sex marriage is currently at all 5 phases in different countries. In a few decades, meat-eating might look the same. Without hindsight, these societal shifts are harder to spot. They can take decades, or centuries to move from one phase to another. They happen first in some places, and later in others. They’re processes, not events.

But in every case, when the dial reaches a certain inflection point, those in power flick a binary switch. At the stroke of a pen, or an imperial edict, or a dictator’s decree, what was legal becomes illegal, what was once normal is now reprehensible. The passage from norm to taboo pivots around the moment when a practice is explicitly banned by law or regulation, which are then enforced.

Globally, corporate carbon reporting is at that inflection point right now. The accelerating impact of global heating means the tide is turning faster than ever.

Think slave trade, not carbon reporting 1.1

Scientists have known about the Greenhouse Effect in theory for more than a century, in practice for nearly 50 years, and have been monitoring it’s real-world impact with growing desperation, as Homo sapiens goes through the painful process of weaning ourselves from our fossil fuel addiction.

Our carbon cold turkey has not gone well, so far, and a critical remedy is partly to blame.

Management 101 teaches that you can’t manage what you can’t measure.

Current carbon reporting standards are meant to be part of the cure. They are the key X-ray, MRI scan or blood test to determine the past, current and projected carbon footprints of an individual, business, brand or country.

Our carbon reporting methodologies reflect our unserious approach to date. They are legacy constructs, engineered for the Age of Voluntary – i.e. optimised for greenwash.

They are critical tools that are unfit for purpose if we – however reluctantly – want to adapt to the reality of human-induced climate change.  

Business’s climate problem

Businesses exist to:

a) stay in business

b) make money/generate shareholder value

As regulations appear, companies adapt, pricing in a new ‘cost of doing business’. More forward-thinking companies get ahead of the game, stealing a march on their less responsive rivals, to gain competitive advantage.

In the Age of Voluntary, businesses, in one way or another, dynamically calculated the risk/reward of: 

• Actively lobbying against ‘green’ regulations (e.g. Big Oil)
• Plausibly appearing green (e.g. greenwashing via offsetting schemes)
• Implausibly appearing green (e.g. Big Oil featuring wind turbines in their advertising)
• Embracing ‘green’ (e.g. renewable energy providers, electric vehicle makers, vegan food producers)

The faster real-world impacts of human-induced climate change manifest themselves, the closer we approach the regulatory inflection point that ends the Age of Voluntary (AKA the Greenwash Era) and ushers in the Age of Compliance (AKA compulsory decarbonisation of our economy).

It’s reasonable to assume that smart business leaders constantly re-assess their business’s status, and matching the results to their own risk aversion or appetite:

• Do they risk getting left behind, ignoring warning klaxons?
• Are they in the middle of the pack, staying safe?
• Are they out in front, gaining first-mover advantage?

At the moment, there are dozens of carbon accounting standards, hundreds of different accounting regimes, and thousands of carbon consulting businesses vying for their attention, each adapting their offer to suit their potential client’s needs.

The problem is, these standards are no longer fit for purpose.

Business’s current carbon reporting options

At worst, existing standards are discredited greenwashing tools,  ‘papal indulgence’ schemes that sell ‘Carbon Neutral’ badges to greenwashing clients, usually via spurious offsetting schemes.

Such standards can only prosper when carbon reporting is voluntary, as they don’t survive serious regulatory scrutiny. This is why so many big adopters of offset schemes are now removing their ‘carbon neutral’ logos from their websites.

They weren’t nimble, attentive or smart enough to spot that societal attitudes had moved faster than they had. They were still proposing banning bear-baiting on Sundays, when the public mood wanted to ban it outright.

Get caught out like this, and the spurious greenwashing claims for which you’ve paid ‘good’ money, end up doing you more reputational harm than good.

Even at best, however, the options are inadequate for any forward-looking business that wants to future proof itself against the growing Compliance Gap separating emerging new carbon reporting laws (like the EU’s CSRD) from current carbon reporting practice. This gap is expanding rapidly, because Carbon Reporting 1.0 standards tend to:

• Use discredited offsetting schemes 
• Not count all carbon emissions (usually Scope 3 indirect emissions)
• Ignore small companies who can’t afford their fees, though SMEs account for 70% of emissions)

These legacy standards are so fundamentally compromised, they’re hard to tweak. 

See Through Carbon offers a radically different framework.

STC’s 3 Key Features

STC has four core features, three of which are innovative.

1: Accuracy

Any credible standard must include Scope 3 and exclude offsetting. 

Increasing numbers of standards are adopting this position.

2: Transparancy

Publishing accurate carbon footprints is still a major stumbling block for companies accustomed to decades of greenwash, where they get to massage the numbers and decide which bits to make public.

For meaningful decarbonisation and credible carbon reduction plans, every business’s carbon footprint should be conform to strict standards, and be public. Just like its financial statements.

The EU’s new CSRD law, and other regulatory changes in Singapore, UK, and elsewhere, are passing laws requiring such transparency. Such legislation tolls the death-knell of carbon reporting’s Age of Voluntary, and rings in the Age of Compliance.

See Through Carbon goes beyond all current carbon accounting standards by:

• Publishing all participants’ carbon footprints
• Including any audit trail by default
• Including a basic List of Solutions for carbon reduction, each with an estimated carbon reduction ‘price tag’. 

3: Resolving Big Businesses’ Scope 3 Contradiction

Even the most progressive legislation doesn’t directly address a major contradiction – Scope 3 reporting. The EU’s CSRD:

• Initially focuses on big businesses, with a timeline to phase in smaller businesses
• Requires accurate Scope 3 reporting, only possible by accurately measuring  small businesses’ emissions 

How can big businesses accurately report their Scope 3 emissions without accurately measuring the emissions of their Small and Medium Enterprise (SME) supply chain, who can’t afford the additional costs of existing commercial standards?

By being free to use, and openly available to anyone who wants to adopt it as a standard, See Through Carbon, uniquely, removes this contradiction.

4: Double-counting and commercial sensitivity

Even if a big company can somehow persuade/compel/fund its entire SME supply chain to accurately measure their footprints, a critical question remains – how to allocate a reasonable proportion to their Scope 3? There are two issues, one an accounting technicality, the other a commercial sensitivity:

1. Double-counting: occurs, for example, when one SME’s total emissions are allocated to multiple customers. This is only a ‘problem’ if governments penalise companies based on their absolute total emissions, rather than relative carbon reduction, but many, like Singapore and France, are going down the carbon tax ‘stick’ approach, rather than the carbon-reduction ‘carrot’ approach currently signalled by the UK and EU. Both may change in future, but either approach depends on accurate measurement.
2. Pro-rata allocation: The simplest basis for dividing up the SME emission pie is on a revenue basis – if a customer buys half the products, allocate them half their emissions. In many cases SMEs would be very reluctant to make this information public, as it would mean disclosing its relative dependence on its big customers.

By acting as a trusted 3rd party, the See Through Carbon standard resolves both these issues.

When SMEs submit their carbon data, their results are public by default. But they also confidentially report their main customers and suppliers, with the proportion of their revenue and outgoings they represent.

See Through Carbon only reports the aggregate supply chain number to big businesses, without a breakdown of how much comes from which supplier. If audited, it can share carbon reporting methodological detail to a regulatory enforcer without disclosing and SME’s business secrets either publicly, or to their customers.

This unique feature requires a high degree of trust in the standard’s integrity.

Future-proofing carbon compliance

The Compliance Gap between emerging carbon reporting legislation and real-world reporting is vast, growing, and likely to exist for a long time.

This is unsurprising. Most of them have roots in the Age of Voluntary, when carbon reporting was primarily a function of PR/greenwashing, not carbon drawdown.

What See Through Carbon Is

See Through Carbon (STC) is a tool enabling an urgently-needed paradigm shift in corporate carbon reporting.

It’s a protocol designed to re-frame attitudes to carbon reporting as we transition from the Age of Voluntary to the Age of Compliance and – belatedly but better late than never – start to take global heating seriously.

In the digital age, See Through Carbon’s deployment may borrow from models like Wikipedia, Linux, ISO or 5G technical standards, but in essence it is simply a statement of values, a Ten Commandment benchmark against which to rate other carbon standards. A greenwash detector. 

The standard is designed to comply not just with today’s most demanding climate reporting legislation, but to future-proof compliance with tomorrow’s more stringent or widely-applied regulation.

Businesses that decline to use the STC standard are:

• content to be in the following pack, sniffing the winds of change
• cynically focused solely on short-term profit
• delusional enough to believe the climate crisis will somehow fix itself

Businesses that adopt the STC standard are:

• leaders gaining first-mover advantage, not me-too followers
• future-proofing themselves against tightening compliance regimes
• benefiting from the well-documented share price, ROI, reputational and recruitment & retention advantages conferred by having a persuasive ‘green story’

What STC isn’t 

STC is not a technical solution involving patentable software. 

Its execution is unlikely to require such innovation. Carbon reporting’s major obstacle isn’t technical, but psychological – recognising the culture shift that normalises routine publication of accurate carbon footprints for all businesses, big and small.

A solution, not a competitor

Transitions can be painful. 

Vested interests who profit from the status quo strive mightily to retard the process and hold back the tide of history.

Naturally, Big Oil is doing the same. It’s as, or more, powerful than any of the bear breeders, slave-owners, misogynists, white supremacists, religious leaders who held out against previous societal shifts. 

But as King Canute demonstrated, you can’t argue with the laws of nature. 

Big Oil and its paid proxies have chosen to set themselves in opposition to atmospheric physics, a force as indifferent human wishes as tidal movement.

The climate crisis’s scope, scale and speed make this mindset-shift uniquely urgent and global. 

By formalising a new standard, See Through Carbon seeks to facilitate the process of carbon accounting becoming part of the solution. The only existing commercial standards STC is ‘competing with’ are the greenwashing ones. 

Widespread adoption of See Through Carbon’s tenets will free carbon consultancies and businesses to focus on the real-word decarbonisation issues, no longer hobbled by greenwash-optimised standards and metrics.

It’s time to abandon a moribund system that enables companies to sell invisible rulers and scales that measure the wrong things inaccurately, to 30% of the emitters.

If we’re not accurately measuring carbon, how can we possibly be serious about reducing it?

Want to know more?

More details on See Through Carbon’s seven pilot schemes at www.seethroughcarbon.org

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