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Carbon Auditing 2.0: Accurate, Free, Open-Source and Transparent

see through carbon pilots SME live music multinational industry health service NHS local government farming agriculture textiles fashion carbon auditing accounting Scope 3

How See Through Carbon’s ground-breaking pilots will help small businesses, bands, multinationals, hospitals, governments, farmers and fashion labels measurably reduce carbon

See Through Carbon – new, unique, necessary

See Through Carbon (STC) soft-launched its website in September 2023, with zero fanfare. In a series of articles and short videos, the website:

  • provides a primer for carbon auditing
  • explains why current carbon auditing system was unfit for purpose
  • introduces the See Through Carbon standard, and what made it new, unique and necessary
  • lists the experts providing their time and knowledge to STC pro bono
  • gives details of first pilot to use this new standard, ‘Wiltshire/SMEs’

Pilot 1 targeted local Small and Medium Enterprises (SMEs) not because they were the easiest to sign up to their new service, but because they were the hardest.

If you can convince local businesses, struggling to survive with soaring bills, a sluggish economy and fickle customers to sign up to something that was not (yet) a legal requirement for them, convincing upstream big businesses who were feeling the regulatory heat should be much easier.

The website explains why, in a crowded competitive field of rival carbon accounting standards, See Through Carbon holds a spectacularly strong competitive ace – it’s impossible to undercut.

What’s the Catch?

See Through Carbon immediately attracted interest from a wide variety of entities interested in participating in Pilot 1, or future pilots.

Until the Pilots started delivering real-world data, much of the conversation focused on how STC could possibly do this for free. This issue is dealt with extensively in other See Through News articles, so we won’t repeat them here, other than briefly.

STC is, and will always be, free to use, because it deals in the currency used by climate scientists – metric tonnes of carbon dioxide equivalent – not money.

There are many familiar ‘free’ models, but none apply to STC, so here’s what they’re not.

  • STC isn’t free because its Pilots are bait-and-switch marketing gimmicks to sucker clients into adopting a standard they’d later have to pay for. Software startups offer the first 6 months for free as a loss-leader to gain market share. STC does it because it doesn’t believe small businesses should pay to use a set of scales, especially when the scales are measuring something as critical as carbon emissions.
  • Nor is STC free because STC customers pay for its services in their attention, converted first into data, and then into dollars. The business model of Facebook and Google and other Silicon Valley surveillance capitalist data-vendors is to sell your personal information to companies who use it to sell you more stuff you don’t need. By contrast, STC will make most of its data publicly available. It will hold back a small amount to ‘sell’, but the only currency you can use to buy it is not dollars, but metric tonnes of CO2e reduced or sequestered.

STC is free because not involving money is the only way to avoid the contamination that afflicts Carbon Auditing 1.0.

The Money Risk

The experience of the past few decades of carbon accounting 1.0, and all previous human history, prove that when you introduce money as a proxy for success, the means become the end. 

That may be acceptable when it comes to health care or education, but apply that to an industry whose supposed objective is to measurably reduce carbon, and it becomes irredeemably disastrous.

Involving money not only compromises the stated goal of carbon reduction, but corrupts the very process. The long-term survival of our species is too important to risk this corruption.

Any carbon auditing standard must be based not on financial muscle power, or political influence, but on physics. STC guarantees its integrity by dealing directly in the same currency used by climate scientists – metric tonnes of carbon dioxide equivalent reduced or sequestered (CO2e for short). 

The obvious way to prevent Money – that beguiling, insidious middle man – from fiddling with the books is to cut him out of the deal.

That’s why STC is a zero-budget disruptor to a trillion-dollar carbon accounting industry, built by a global network of sustainability, auditing, IT, data, AI, business and storytelling experts, working pro bono.

Why so many pilots?

A consistent, pervasive, reliable carbon auditing standard must prove that it works at all scales and in all scopes.

We’re all made of carbon, and everything we do involves carbon, so measuring different human activity at different scales shouldn’t matter if you can consistently apply the same methodology.

The physics of carbon emissions mean there’s no difference, in principle, between auditing the carbon footprint of an individual, an SME, a band, a hospital, a multinational, a government, an industry, or a country. 

The bigger the entity, the more questions you need to ask, and the greater the number of zeroes in the answers, but the basic mechanism is identical. Whoever the client may be, See Through Carbon follows the same procedure:

  1. Asks them to quantify all their activities that emit CO2 or other greenhouse gases.
  2. Applies the best available data, science, conversion factors, embedded energy estimates, environmental product descriptions etc. to attach an accurate carbon price tag to each answer.
  3. Makes the resulting data public.
  4. Suggests ways of reducing each client’s main sources of CO2, including an estimated CO2 reduction price tag with each solution.
  5. Documents and tracks progress publicly.

Different industries, locations, and scales, however, do present different challenges to accurate carbon measurement.

This is why STC has a suite of 7 Pilots, each testing different variables. Proving STC’s standard is robust in each Pilot will demonstrate it measures carbon footprints accurately, compile a rich data set to provide useful data visualisations and train AI models to automate certain outputs – and prove that all this can be done without money.

Here are details of each pilot, explaining why STC chose them in terms of locale and scope, the particular method being used to recruit pilot guinea pigs, and, where available, the current partners signed up, or in talks.

Pilot 1: Wiltshire SMEs

Locale 

Estimating how many small businesses there are in any given geographical area is a surprisingly inexact science. The OECD defines an SME as a company with up to 249 employees. A town of 40,000 may have a handful of companies with, say, 100+ employees. The local chamber of commerce may have dozens of members with, say, 10+ employees. Include every single part-time sole trader who’s invoiced once in the past year, and there will be thousands. The Pilot could have chosen anywhere in the UK, but initially targeted two Wiltshire locations of approximately 40K populations as they were local to See Through Carbon’s current headquarters, and for reasons explained in the Method below.

Scope

According to the best available OECD research, Small and Medium Enterprises (SMEs) generate up to 70% of total global business emissions. SMEs produce twice as much carbon as big businesses, but can’t access current carbon auditing and consultancy because they can’t – and never will be able to – afford to pay for such services.

Now that big businesses are being required to account for their Scope 3 emissions (which largely come from their supply chain of SMEs) this is an intractable problem for any commercial carbon auditing standard. Neither government subsidies nor AI can help crack this problem. The only way to accurately measure SME carbon emissions is to offer a free service.

Until government regulations percolate down to SME level (which is already starting to happen in certain sectors – see Pilot 4 below), the only way to persuade struggling SMEs to adopt carbon auditing voluntarily is to offer commercially advantageous incentives (see Method below).

Method

As local governments have found, getting local businesses to take a few minutes to sign up a carbon audit is hard. Even making it free isn’t enough, on it’s own. STC offers 5 additional incentives, which collectively reduce the barrier to engagement substantially.

Most persuasive is the incentive of free advertising in local Facebook Notice Board groups. The greater the percentage of the local population who’ve joined those Facebook Groups, the greater the incentive. Pilot 1 can offer SMEs free advertising in these groups:

  • Salisbury Notice Board: 21K members (50% of total 42K population), avg. 40 posts/day, 95% local businesses seeking local customers and vice versa.
  • Chippenham Notice Board: 23K members (63% of total 37K population), avg. 55 posts/day, 95% local businesses seeking local customers and vice versa.

Partner

Both these groups, plus similar groups in more than 400 locales around the UK, are administered by STC’s sibling network See Through News. STN has offered STC exclusive access to these unique and critical assets, of proven value to local SMEs, at zero cost.

Wiltshire County Council is in discussions with STC to adopt STC itself, and promote it to local businesses. Since launch, officials at various levels of other UK counties have expressed interest in expanding the Pilot to include their locales. Local governments have long struggled to engage local businesses with net zero goals and recognise STC as a zero-budget solution.

Pilot 2: UK Live Music

Locale

As one of only three net exporters of recorded music (behind the US, ahead of Sweden), the UK is a music industry superpower. Live music has a different carbon emissions profile, and is proportionate to the numbers of people attending live events. Even for live music, the UK is still relatively rich in the number and variety of its live musical acts, so Pilot 2, launched in Jan 2024, can rapidly provide a granular and comprehensive dataset from a relatively small number of participants.

Scope

Music accounts for a small proportion of global carbon emissions, but musicians’ relatively high profile makes them disproportionately influential. Construction may account for 40% of global emissions, but most people can name far more musical acts than construction conglomerates.

This means focusing on live music can ‘punch above its weight’ in terms of uptake and influence. 

Method

Many famous bands have a reputation for ‘caring for the environment’, and gain considerable reputational benefit from publicising actions like banning disposable cups from their concerts, or recycling backstage food. Whether cynically advertent, or naively inadvertent, such claims are risibly ineffective in reducing carbon, and classic greenwash.

Music provides a particular carbon auditing challenge, as it doesn’t conform to the neat linear supply-chain model assumed by current auditing standards. For example, the screw manufacturer-carburettor maker-engine manufacturer-carmaker supply chain is clear, and follows the flow of money.

When it comes to identifying the ‘instigating entity’ of any transaction, however, live music is much fuzzier. All gigs require a venue and an act, but both can also take on the role of promoter, or the promoter role can be filled by one or more third parties. It’s not all obvious even to the parties concerned who the ‘instigating party’ is.

In fuzzy cases, carbon accounting often follows the money, using ‘revenue basis’ as a good-enough proxy for allocating carbon liabilities between different equal parties. The live music business, however, makes even this hard. Each contract is different, awarding different ticket splits, merchandise sale splits etc. which in turn can vary depending on audience size. This means the money allocation may not become apparent until months after the gig, making it impractical even if the parties were prepared to divulge such commercially sensitive information.

This makes live music a particular technical challenge for STC’s Trustees to make the STC standard universally functional, fair and practicable. If STC can come up with a fair and consistent way of allocating carbon liabilities, it will prove itself an upgrade on all existing standards.

Partner

STC has partnered with musical acts, including The Ukulele Orchestra of Great Britain (which has been filling venues for 40 years, including Carnegie Hall, Sydney Opera House and the Royal Albert Hall), and venues of various capacities, including the Cheese & Grain in Somerset, and Trowbridge Civic Centre in Wiltshire. Pilot 2’s working group includes representatives involved in administering festival-intensive locales including Edinburgh and Cheltenham, which provide an additional carbon auditing challenge to fixed, single-act, venues like theatres.

Pilot 3: Global Industry

Locale

The Industrial Revolution was based on fossil fuels, and fossil fuel globalised local economies. This means that supply chains are now lashed around the planet. Just as all life on Earth is linked by carbon, all carbon accounting must follow these links as they snake to all corners of human civilisation. That’s why Pilot 3 must follow the supply chain wherever it leads.

Scope

Technically, measuring the carbon footprint of a global supply chain is no different from measuring one limited to a single village. You just count all the carbon emissions of each party, and allocate them fairly up and down the supply chain to ensure there’s no double counting.

Despite global jurisdictions like the World Trade Organisation, different countries and blocs have so far adopted different measuring systems – this is one of the many reasons why Carbon Auditing 1.0 is so unfit for purpose.

Still, a Chinese multinational must obey local carbon reporting standards in Belgium, and vice versa. Both must do the same if they do business in Brazil or Bahrain. Politics may favour asymmetry, but business and accounting logic favours a single, uniform, consistent, pervasive standard. 

Such standards are used in financial accounting, when global accounting firms compile annual reports for multinationals. We’re currently nowhere near a similar pervasive accounting standard for carbon emissions. STC, being is the only one that’s independent of any political entity, and free, should have the best chance.

Method

Start with any multinational, at any point in its supply chain, and work upwards and downwards to supply all links with their Scope 1&2 reports, and allocate Scope 3 without double-counting.

Partner

Within 6 days of www.seethroughcarbon.org going live, a head of sustainability at a billion-dollar turnover multinational emailed info@seethroughcarbon.org to enquire about participating in a future pilot. Their story was typical of the challenge faced by multinationals to comply with increasingly stringent carbon reporting requirements, and the inability of Carbon Auditing 1.0 to address their needs.

This engineering conglomerate, operating in 30+ countries, under increased regulatory pressure in multiple jurisdictions to deliver accurate, verified carbon reporting, was searching for carbon auditing solutions. As they used huge quantities of cement and steel, two of the world’s most carbon-intensive products, they knew that including the embedded energy of their raw materials would greatly increase the Scope 3 element of their own carbon footprint. They also recognised that excluding them would amount to greenwash.

Carbon accounting experts, like those on the panel of the Financial Times’s webinar on Tackling Scope 3 Emissions, shrugged their shoulders and said there were’ ‘no tools out there’ for the job. Being engineers, this multinational tried creating their own tools in-house.

After months of effort, hundreds of person-hours and thousands of dollars, they’d reached an impasse. Attempting to make sense of the various carbon reports submitted by different suppliers, each using different methodologies, all opaque because the carbon auditing standards wanted to protect their IP as ‘commercially sensitive’, was a hot mess of comparing apples and oranges, and huge guesses and assumptions.

Reading about Pilot 1, they asked STC if a future Pilot might apply the same standard to their supply chain. When told not only that it would, and that it was designed to automatically calculate their Scope 3 instantly at no cost to them or their supply chain, so long as they instructed their suppliers to sign up for free, their suppliers agreed to allow STC to share specific data with them, they realised this was the only available solution to their reporting requirements.

Along with several other multinationals who have also contacted STC, and are doing their due diligence on STC’s methodology, this engineering multinational is eagerly awaiting the results of Pilot 1 before trying it out on their global supply chains.  

Pilot 3 will be ready to start once Pilot 1 proves STC’s basic mechanism and functionality, and STC develops an API to use at scale (currently in development, awaiting real-world data from Pilots 1 and 2).

Pilot 4: UK Health Services

Locale

With 1.7 million employees, the UK’s National Health Service is not only the UK’s biggest employer (1.7million staff), but the 5th biggest in the world (behind US multinationals Walmart and McDonalds, and China’s railways and police, in case you were wondering…).

The NHS’s US$210 Billion annual budget accounts for 10% of the UK’s entire GDP

Scope

The NHS has a clear hierarchy and supply chain, conveniently clearly divided into health trusts, hospitals, clinics etc. Systems like this facilitate carbon accounting, as it’s relatively clear whose carbon liabilities should be allocated where (as every supplier’s carbon footprint constitutes part of their upstream customer’s Scope 3, such clarity is important to avoid double-counting).

Even better, as a public body, the NHS is among to first to make carbon reporting a legal requirement throughout its supply chain including its SMEs. With health care accounting for 10% of OECD countries’ GDP, this is a sector requiring accurate carbon accounting.

Method

With such a complex system, the Pilot should focus on a limited geographical scope at the lower end of the supply chain, using it as an anchor to spread up and down the supply chain.

Partner

STC is in discussions with potential partners, to identify the best Pilot 4 starting point in the NHS supply chain (the NHS is made up of 215 Trusts, 1,148 hospitals and 6,450 clinics). It makes sense to base it in the same locale as one of the existing Pilots, probably 1 (SMEs) or 5 (local governments) as there will be considerable overlap. Pilot 4 will also require the development and testing of an STC app and API to progress.

Pilot 5: UK Local Government

Locale

The UK is made up of 317 local authorities, each with its own budget and authority to allocate it within national statutes. As well as being significant employers themselves, with particularly keenly-felt obligations to report, account for and reduce carbon emissions under their own control (i.e. Scopes 1 and 2) , local councils also have long supply chains of local services and SMEs, (i.e. their Scope 3) who they can encourage/compel to sign up to STC in order to satisfy their own reporting requirements.

The fact that STC can do this at zero cost is particularly important for the UK’s local governments, who are in a permanent budget crisis following more than a decade of real budget cuts.

Scope

The UK spends slightly more of its GDP on public services than the European average, and much of this trillion-odd pounds is disbursed via local governments. Local government covers a huge range of services, but ultimately most are delivered by SMEs down the supply chain (i.e. linking up with Pilot 1).

Method

Start with a department within a local council with a relatively small supply chain of a dozen or so local SMEs, and expand down and up from that anchor point. 

Partner

STC is in discussions with various levels of different local governments, seeking to partner with those who best demonstrate genuine commitment to measurable carbon reduction, rather than bureaucratic box-ticking.

There’s a further win-win if this overlaps with a locale from Pilot 1, as many local SMEs will already be in their supply chain (the same is true for Pilot 4, and eventually everywhere, as all businesses are interconnected).

Pilot 6: Global Agriculture

Locale

Globalisation means our food systems have become increasingly interconnected, with carbon auditing implications. This presents a particular challenge for limiting the geography of Pilot 6.

The carbon footprint of UK beef farmers should include the carbon costs of Amazon deforestation, if they feed their cattle soybeans grown in Brazilian plantations created by cutting down rainforest. Chinese pork’s carbon footprint should include the embedded emissions from Iowa corn fields, as much of their feed is imported from the US. Standard conversion factors exist for all these calculations, but an accurate carbon footprint requires asking the right questions, and counting everything.

Scope

Our food system accounts for around a third of total carbon emissions. Unlike the Internet, AI, broadband, space travel, democracy, human rights etc., we know future human civilisations will definitely need food. We survived the first 300,000 years of our existence without the former, but not without the latter.

Method

‘Carbon offsetting’ has been thoroughly discredited as a reliable form of carbon reduction. Trading ‘carbon credits’ has enriched many carbon traders, and until recently big businesses have been happy to buy them.

Now offsetting has been discredited, by journalists and academics, as cheap ‘papal indulgences’, permitting them to continue business a usual while paying a small fee to poor, distant, brown people to plant theoretical trees, the reputational benefits of such greenwash are now being outweighed by its downsides.

See Through Carbon’s Trustees, who set the STC standards, protect any STC user from such humiliation by setting an extremely high bar of evidence for any claims for carbon offsetting.

STC’s Trustees may consider certain forms of ‘carbon insetting’, where businesses are directly accountable for carbon reduction or sequestration, which might apply to Pilot 6.  For most businesses, ‘waste’ is a clear carbon negative, but farming offers various methods of mitigation through insetting (for example, generating biogas from manure, or recycling byproduct as animal feed or fertiliser).

There are well-established and credible carbon accounting protocols, particular to farming and the agricultural sector, designed to recognise such insetting. This makes Pilot 6 a good test of the STC standard’s range and flexibility.

Partner

See Through Together (working title for a new YouTube channel run by See Through) is currently developing a pilot entertainment format to test See Through’s ‘C2C’ (‘Content-to-CO2 reduction’) mechanism, working title ‘Betting The Farm’.

Details will follow when the channel is launched (scheduled for the second quarter of 2024), but this format is designed to appeal to mass audiences, and is based on farmers accepting the challenge of signing up for a STC carbon audit, and agreeing to consider the carbon-busting solutions provided by STC’s consultants.

Pilot 7: Global Textiles

Locale

Textile, clothing and fashion is a particularly global industry. Even an apparently ‘simple’ products like a shirt can require input from dozens of countries around the world; designers, marketers, financiers, cotton farms, polymer extruders, yarn spinners, textile weavers, fabric finishers, textile printers, button suppliers, thread suppliers, packaging suppliers, panel cutters, garment factories, wholesalers and distributors, to name a few.

A pilot would only be meaningful if it follows this global supply chain.

Scope

Textile manufacture is particularly water intensive. From the water required to create raw materials like cotton and wool, to the large volumes of water required by various stages of processing and finishing, textiles is a particularly thirsty industry.

The embedded energy and associated carbon emissions in these processes place particular demands on the accurate reporting of Scope 2 (‘Utilities’). For most industries, Scope 2 is almost exclusively composed of the carbon emissions from your power supply, but for textiles, water is also a major factor, for Pilot 7 to calculate. 

Method

As for the other pilots, accurate carbon footprint calculation in the textile industry requires all links in the supply chain to be audited using the same methodology. This is best done by the upstream client (such as a fashion label, clothing brand or retailer) requiring its supply chain to sign up to STC, in order to calculate their Scope 3 emissions.

Partner

STC is in discussion with data providers and consultants specialising in this sector, with a view to integrating free STC carbon audits and carbon reduction plans into the supply chains of their clients, largely international fashion brands.

Why should our carbon footprints be public?

STC has experienced one consistent response, when explaining the STC deal to potential pilot clients. It comes when they ask ‘what’s in it for you?’.

We explain that in return for providing a free service, we require their data. So far so good – just like Google or Facebook. But when businesses – whether sole trader plumbers from Pilot 1 or multinational CEOs from Pilot 3 – are told most of this data will be made public and open source, they have the same standard response, which can be summarised as:

STC will almost certainly come up with a much bigger number for my carbon footprint than the other available services. Even if it’s free, why would I want to advertise this by agreeing to make my business’s carbon footprint public?

While understandable, this reaction reveals why we’re in such a mess. For all the fine words about wanting to ‘help save the planet’, the fact is that nearly everyone regards carbon auditing as an optional extra, a marketing possibility, rather than a serious duty. Carbon footprints are only to be made public if they make you look good.

The same plumbers and multinational bosses who say they couldn’t possibly risk public humiliation at being the first business in their sector to admit the true size of their carbon footprint, see nothing odd in filing their annual reports with the tax authorities, where it’s visible to everyone in the world.

Why is it OK to make our money footprint public, but not our carbon accounts?

Simple. Because we take money seriously, the former is compulsory, and because we don’t yet take carbon seriously, the latter is voluntary.

Like children – or parents – who only reveal exam results if they get straight As, businesses have so far been permitted to only reveal their carbon footprints if they get a green ‘carbon neutral’ badge’. It’s optional.

There are plenty of carbon auditors, accountants traders and offsetters who make a living from these green badges. Most businesses have so far been content with buying the cheapest badge, so long as they can match their competitors’ green ‘carbon neutral’ badges.

All good business – these kind of green badges account for most of the trillion-dollar carbon accounting business. The problem is that, meanwhile, carbon emissions continue to climb. So long as carbon reporting is seen as a branch of PR, they will continue to climb.

Current carbon auditing standards pander to this delusion, promoting greenwash but also complacent inaction. Meanwhile, those parts per million of CO2 just keep climbing.

The problem has been that even businesses who genuinely want to reduce carbon, there have been no good options.

Until now.

See Through Carbon offers a lifeline to bosses who want to be able to look their investors/colleagues/employees/children/grandchildren in the eye when they ask them what they’re doing to ‘save the planet’.

All bosses know that ‘if you can’t measure it, you can’t manage it’.

If you can’t measure carbon properly, you can’t credibly claim to reduce it.

There can only be one first adopter

Breaking the greenwash cycle is hard. It requires a bold pioneer to be the first to take the plunge, someone with the vision to get ahead of the game. Someone who can see where all this ‘green stuff’ is heading, and recognise the long-term benefit of being a first adopter will ultimately outweigh any short-term awkwardness.

All business bosses must understand the basics of financial accounting and auditing. Failure to do so means soon going bust, or being busted by the taxman.

Yet even though money is something we made up 5,000 years ago, and carbon is something all life on our planet has been made of for billions of years, very few business bosses have even a rudimentary understanding of carbon accounting. 

We treat money way more seriously than carbon. To an alien visitor, this gap in understanding accounts for why our species is choosing to destroy the environment that sustains us. It’s why the first item on the STC website is a video explaining carbon accounting basics, and why so much of STC meetings with CEOs are taken up with explaining fundamental principles of carbon liabilities and assets.

It’s illuminating, if depressing, to discover that so many decision-makers, with intimate knowledge of the most recondite loopholes to be exploited in tax codes around the world, need to have the difference between Scope 1, Scope 2 and Scope 3 explained.

To an alien visitor, our current level of ‘carbon literacy’ would be as baffling as a chess grandmaster not knowing the Earth revolves around the Sun.  

People who want to be good at both chess and astrophysics are the kind of early adopters STC is seeking. Ideal pilot partners are the kind of decision-makers who want to be able to prove to their grandchildren, should they have any, that they did their best to leave them with a habitable climate, and maybe play their parts in plotting a sustainable future.

All they need do is be the first in their sector to take carbon reduction seriously, and adopt See Through Carbon.