Could climate change damage business reputations? BSI, for one, is calling on companies to tweak their sustainability strategies as a hedge against reputational risk.
In a note published Wednesday, the business improvement and standards firm warned that ISO 14064-1 Greenhouse Gases Part 1—the standard companies use to independently verify their emissions reporting—has become more “rigorous,” in part because global emissions levels continue to defy corporate mitigation efforts.
Instead of allowing firms to report only on direct emissions at the organizational level, such as switching on a boiler or driving a car on premises, the updated standard now requires companies to record emissions throughout their supply chains, including from subcontractors.
The standard remains voluntary, but BSI has seen a “marked increase” in the number of organizations worldwide expressing interest in the new version, according to Martin Townsend, its global head of sustainability and circular economy.
“This remains a voluntary standard, and the change has not been reflected in regulation as yet,” he said in a statement. “However, those organizations around the world who are taking an interest in the new standard will be on the right track to becoming more responsible industry leaders. We may even start to see contracts stipulating that supply-chain partners must provide independently verified data.”
To be sure, meeting this new standard will “signal a dramatic shift” in corporate emissions reporting, Townsend said.
While indirect emissions make up the bulk of a company’s impact, most businesses are not equipped to track or report them. At the same time, today’s increased public scrutiny means companies have little choice in the matter. They can either “get ahead of the issue” by securing third-party verification for their total emissions or they can risk damage to their reputations for not doing enough in the face of rising temperatures, worsening natural catastrophes and shrinking gross domestic products.
“Many companies struggle to get accurate data on their supply-chain emissions, and being able to rely on the current figures is a further challenge,” he said. “External verification will help to verify data from suppliers and provide a clear picture of the organizations’ total emissions.”
Climate change has been touted as one of fashion’s most pressing challenges, yet fewer than a handful of brands have made commitments that will put the planet on a path of less than 2 degrees of warming, experts say. The garment and textile industry is reported to account for between 8 percent to 10 percent of global greenhouse-gas emissions, or more than all international airline flights and maritime shipping trips combined.
In November, Gucci president and CEO Marco Bizzarri issued a “carbon neutral challenge” to urge his fellow CEOs to take full and immediate responsibility for the total greenhouse-gas emissions generated by their supply chains. The same month, Textile Exchange, a nonprofit consortium whose membership includes brands such as Burberry, Gap, H&M, Kering, and Zara owner Inditex, announced a new “strategic direction” to reduce carbon emissions from textile production by at least 35 percent by 2030.