Covid-19 has significantly disrupted work behaviour, driving greater flexibility around employment hours and work location. What are the challenges relating to a dispersed workforce in terms of quantifying and reporting carbon emissions?
The pandemic saw in-office attendance plummet, and carbon emissions fall
Covid-19 has had a fundamental impact on daily lives across the globe, altering our behaviour and subsequently decreasing the levels of carbon emissions generated as a result of our reduction in activity. In our previous entry to this series, we discussed how the pandemic “has driven a decline in carbon emissions across the globe”, where, according to the Global Carbon Project, global emissions were expected to have fallen by about 7% in 2020 (equivalent to 2.4 billion tonnes of carbon dioxide) when compared with 2019. They argued that this could be attributed to the slowdown in economic activity associated with the Covid-19 pandemic. “To put this into perspective, the Global Financial Crisis in 2008 saw a 1.5% drop in global emissions compared to 2007. This year’s emissions decline is more than four times larger.”[i] The pandemic’s effect on CO2 emissions was driven in part by government policies imposed during the first year of the outbreak, including the associated lockdowns. This of course varied by nation, but many countries imposed stay at home measures and quarantine guidelines. Such measures have drastically altered patterns of consumption, movement of people, and demand for goods, around the world. Offices were eerily quiet at the height of the pandemic
Source: Unsplash
Behaviour’s relating to the ways in which people now conduct work has changed, with in-office attendance at the start of the pandemic falling significantly in many countries. In the UK, data shows that at the peak of the first wave of the pandemic, up to 60% of the adult population[ii] of the UK were working from home; roughly 30 million people. For context, 2019 saw just 1.54 million people working from home in the UK as part of their main job[iii]. As life has begun to return to a semblance of ‘normality’, we have seen the move to work from home remain, with many individuals now participating in a ‘hybrid’ model of working; whereby some days are spent working from home, and others back in the office.
This has meant that commuting practices have been impacted, often leading to a decline in the use of public transport and mass transit systems. However, in many countries, a favoured method of commuting is by car, thus reduction in commuting also means fewer car journeys. In the US for example, there is a reliance towards the use of personal vehicles to attend the office: “29% of U.S. greenhouse gas emissions come from transportation, more than any sector of the economy. Most of those emissions come from personal cars, SUVs and light trucks… Americans overwhelmingly drive to work- According to the 2018 American Community Survey (ACS), 76% of commuters drove alone and 9% carpooled, meaning that a total of 85% travelled by private vehicle.”[iv]With a reduction in travel to the office, the result has been a decline in associated emissions. For example, the City of London saw air pollution decline by 35% within the first few weeks of the lockdown imposed back in April 2020. Given that around half of London’s air pollution comes from road transport, according to TFL data, it is no surprise that the lockdown would have a dramatic result on emissions. Further, according to City of London data, nearly half of car trips made by Londoners before the first coronavirus lockdown could have been cycled in around ten minutes[v].
Dispersed workforces & hybrid working models create issues for emissions reporting
Whilst workers have begun to return to the office, many employers are allowing their employees to continue to work flexibly, with some days spent continuing to work from home. Others have made the decisions to allow home working permanently. Working Adults in Great Britain, Split by Work Location from January 2021-March 2022 (%)
Source: ONS[vi]
This change in work location has raised multiple issues for businesses and has been further disrupted by the numerous changes in pandemic laws and restrictions, for example, the lifting and subsequent reimposing of lockdowns. In terms of sustainability, a significant challenge now lies in business being able to calculate its emissions; how can they accurately do so when many in their work force may no longer be operating from the office or are only present at certain times?
When looking at the reporting of carbon emissions, we often hear reference to the GHG Protocol of 2001, where emissions created by businesses were broken into 3 separate scopes. These form the basis for GHG reporting across the world.
Source: GHG Protocol
Scope 1 and 2 relate to the emissions from a company’s owned buildings, fleet and other assets, these are the most commonly reported areas of GHG emissions- 55% of the SAP500 now report on both of these[vii].
In contrast, Scope 3 is much less common, with only 38% reporting. This is because it’s far more difficult to measure- it covers the indirect emissions up and down the supply chain, making it a substantial task to quantify. The GHG Protocol states that “measuring Scope 3 emissions is a big undertaking, but it matters: for many businesses, Scope 3 emissions account for more than 70 percent of their carbon footprint.”[viii]
Unfortunately, when we look at the situation with working from home “Emissions from homeworking are classed as Scope 3 emissions, i.e., they occur as a consequence of an organisation’s actions, but are not owned or controlled by that organisation.”[ix]
This means that reporting them can prove challenging and, while large unquoted companies and LLPs are required to report on some Scope 3 emissions related to business travel, home working is not included in this. However, even though Scope 3 emissions reporting is often not required by law, UK government guidance says that it is strongly encouraged.
Businesses themselves are now seeing increased pressure to be transparent around their supply-chain, leading larger companies to expect suppliers to accurately report their emissions and show their green credentials. As a result, it is paramount that both large and small companies alike recognise and factor in their emissions data making an effort to include Scope 3 activities such as employees working from home. Whilst this is not a legal requirement at present, it places businesses in good stead for any future law change and addresses concerns around some emissions data (such as previous commuters, who now work from home) falling through the cracks. The dramatic shift in working patterns presents a challenge for organisations reporting their emissions, especially with 2020-2022 emissions being atypical due to a reduction in office attendance, travel and other activity. The risk is that with a newly dispersed workforce, some emissions data is being missed, creating a deceptive reduction in overall emissions figures for some companies.
The challenge is in assessing the level of carbon emissions employees working remotely produce, with workers using their own electricity for lighting and work equipment, their own heating in winter months and cooling equipment, such as air conditioning or fans in summer. To report this will require a culture within the workforce to record and report what is being used during work hours. For some companies, this will also form a catalyst for engaging their staff more in the net zero journey and help form a greater integration between the best working practices that are followed in the workplace and at home in this new hybrid model.
References
[iii] Ibid
[vii] https://www.iea.org/data-and-statistics/charts/number-of-companies-in-the-s-and-p-500-reporting-energy-and-emissions-related-metrics
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