{"id":92728,"date":"2025-03-07T13:49:45","date_gmt":"2025-03-07T18:49:45","guid":{"rendered":"https:\/\/www.rbcroyalbank.com\/en-ca\/?post_type=rbc_my_money_matter&#038;p=92728"},"modified":"2025-03-07T13:49:46","modified_gmt":"2025-03-07T18:49:46","slug":"carbon-management-what-is-it-and-should-your-business-do-it","status":"publish","type":"rbc_my_money_matter","link":"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/carbon-management-what-is-it-and-should-your-business-do-it\/","title":{"rendered":"Carbon Management: What is it, and Should Your Business Do It?"},"content":{"rendered":"\n<section class=\"wp-block-rbc-section-block  pos-rel\" style=\"border-radius:0px\">\n<div class=\"wp-block-rbc-section-inner-block  section-inner\" style=\"border-radius:0x\">\n<div class=\"wp-block-rbc-rbc-block drop-shadow pos-rel top-line-blue block-wpr  mar-b-hlf\">\n<div class=\"wp-block-rbc-rbc-block-inner-block block-inner\">\n<h4 class=\"wp-block-heading\" id=\"h-tldr\">TLDR<\/h4>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>In the transition to net-zero, in certain jurisdictions, companies are now required to provide climate disclosures and more clients are asking companies to improve their carbon management and climate disclosures.&nbsp;<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>\u201cCarbon management\u201d is a broad term for measuring, reporting on, and reducing your carbon emissions.&nbsp;<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Carbon management can be a challenge, particularly as many businesses are approaching it for the first time. However, with the right tools and guidance, companies can take steps to reduce their carbon emissions.&nbsp;&nbsp;<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Carbon management can benefit businesses with operational efficiencies, cost savings, and a positive reputation.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Clarity around a business\u2019 carbon emissions profile can help to identify risk, protect investors, and unlock access to capital.<\/p>\n<\/li>\n<\/ul>\n<\/div>\n<\/div>\n\n\n\n<p>As the world economy transitions to net-zero, more businesses are&nbsp;<a href=\"https:\/\/www.canada.ca\/en\/department-finance\/news\/2024\/10\/government-advances-made-in-canada-sustainable-investment-guidelines-and-mandatory-climate-disclosures-to-accelerate-progress-to-net-zero-emissions.html\" data-dig-id=\"LP-92728-d56f8323\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"measuring, reporting on, and working to reduce their carbon emissions\" class=\"rbc-link-format\">measuring, reporting on, and working to reduce their carbon emissions<\/a>. While some companies are&nbsp;<a href=\"https:\/\/www.walmartsustainabilityhub.com\/project-gigaton\" target=\"_blank\" data-dig-id=\"LP-92728-0d4ba7ff\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"choosing to voluntarily disclose\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">choosing to voluntarily disclose<\/a>&nbsp;their emissions data, businesses could be impacted by mandatory regulations that require them to report on Scope 1, 2 and 3 emissions. Scope 3 includes supply chain emissions, meaning that companies are starting to turn to suppliers to gather this information.<\/p>\n\n\n\n<p>And regulatory standards are being set around the world, which impacts companies with global supply chains and operations: In the United States, California has passed two laws requiring businesses to disclose their greenhouse gas (GHG) emissions and disclose climate-related financial risk (Bill SB-253 and Bill 251). The European Union\u2019s Carbon Border Adjustment Mechanism applies a carbon price to goods imported into the EU, and Canada\u2019s Bill-59 aims to mitigate greenwashing by requiring companies to back up environmental claims with data and reporting.<\/p>\n\n\n\n<p>Getting a clear picture of your company\u2019s carbon emissions is not an overnight task, nor should it be taken on without a plan and clear understanding of the process. In this article, we\u2019ll explore what carbon management means, what it entails.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is carbon management?<\/h2>\n\n\n\n<p><a href=\"https:\/\/natural-resources.canada.ca\/energy-sources\/carbon-management\/canada-s-carbon-management-strategy#a2\" target=\"_blank\" data-dig-id=\"LP-92728-bf7e0aeb\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"Carbon management\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">Carbon management<\/a>&nbsp;is the process of measuring and reducing the greenhouse gas (GHG) emissions produced by your business activities, which is sometimes referred to as a \u201c<a href=\"https:\/\/www.carbontrust.com\/our-work-and-impact\/guides-reports-and-tools\/a-guide-to-carbon-footprinting-for-businesses\" target=\"_blank\" data-dig-id=\"LP-92728-c3edca5f\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"carbon footprint\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">carbon footprint<\/a>\u201d.&nbsp; This is one part of your company\u2019s broader environmental impact, which can&nbsp;<a href=\"https:\/\/nbs.net\/wp-content\/uploads\/2022\/01\/NBS-Executive-Report-Impacts.pdf\" target=\"_blank\" data-dig-id=\"LP-92728-9c3e209a\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"also encompass\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">also encompass<\/a>&nbsp;water consumption, material use, waste management, biodiversity considerations, and much more.<\/p>\n\n\n\n<p>In this article, we\u2019ll help you start thinking of carbon management as a multi-step process for your business. It involves first measuring your emissions, which helps&nbsp;<strong>set a baseline year&nbsp;<\/strong>that will give you a snapshot of your emissions at a particular point in time. From there, your new emissions data will help you&nbsp;<strong>understand your hotspots<\/strong>&nbsp;(that is, your most carbon-intense activities). You can focus on these to&nbsp;<strong>set targets<\/strong>&nbsp;for reduction, and then&nbsp;<strong>track these reductions<\/strong>&nbsp;over time.<\/p>\n\n\n\n<p>Carbon management is about more than just measuring emissions, but knowing these levels is a critical first step. It lays the foundation for your company\u2019s environmental sustainability strategy, allowing you to set achievable reduction targets, identify relevant next steps, and report credibly on your environmental sustainability progress.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the business benefits of carbon management?<\/h2>\n\n\n\n<p>In many cases, carbon management is simply a business necessity. For example, carbon reporting requirements have recently become mandatory in several regions globally, such as the&nbsp;<a href=\"https:\/\/climate.ec.europa.eu\/eu-action\/international-action-climate-change\/emissions-monitoring-reporting_en\" target=\"_blank\" data-dig-id=\"LP-92728-a97c2155\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"EU\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">EU<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/ww2.arb.ca.gov\/our-work\/programs\/mandatory-greenhouse-gas-emissions-reporting\" target=\"_blank\" data-dig-id=\"LP-92728-5687d6e9\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"California\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">California<\/a>. But carbon management is more than just complying with regulations \u2014 it can be good for business for a number of reasons:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Understanding the scope and scale of your carbon emissions could help to improve operational efficiency, leading to cost savings through <a href=\"https:\/\/www.energystar.gov\/industrial_plants\/decarbonizing_industry\/energy_efficiency_reduces_industrial_carbon_emissions\" target=\"_blank\" data-dig-id=\"LP-92728-91dc04ac\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"reduced energy consumption\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">reduced energy consumption<\/a> and streamlined processes.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Sharing information about your environmental sustainability strategy and actions can&nbsp;<a href=\"https:\/\/www.newswire.ca\/news-releases\/while-brands-think-they-have-consumer-trust-most-canadians-are-skeptical-about-sustainability-claims-809685631.html\" target=\"_blank\" data-dig-id=\"LP-92728-3149876b\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"build brand trust and reputation\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">build brand trust and reputation<\/a>, attracting like-minded customers and investors.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Companies with a genuine commitment to corporate responsibility have <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/Strategy%20and%20Corporate%20Finance\/Our%20Insights\/Five%20ways%20that%20ESG%20creates%20value\/Five-ways-that-ESG-creates-value.ashx\" target=\"_blank\" data-dig-id=\"LP-92728-bb124012\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"higher productivity\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">higher productivity<\/a>. Climate action can also <a href=\"https:\/\/www.deloitte.com\/cbc\/en\/services\/risk-advisory\/blogs\/gen-z-and-millennial-survey.html\" target=\"_blank\" data-dig-id=\"LP-92728-1da2379b\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"help to attract new talent\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">help to attract new talent<\/a>, particularly as more people look for purpose in their work.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Climate action can also improve access to capital, as banks and insurers look to <a href=\"https:\/\/www.canada.ca\/en\/department-finance\/programs\/financial-sector-policy\/sustainable-finance.html\" target=\"_blank\" data-dig-id=\"LP-92728-c3cce8a5\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"provide support for carbon-cutting projects\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">provide support for carbon-cutting projects<\/a> through special interest rates and sustainability-linked financing.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Beyond meeting regulatory standards, having a clear picture of your company\u2019s GHG emissions could help to <a href=\"https:\/\/ghgprotocol.org\/sites\/default\/files\/standards\/ghg-protocol-revised.pdf\" target=\"_blank\" data-dig-id=\"LP-92728-324847be\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"identify risks in your value chain\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">identify risks in your value chain<\/a> that investors could view as a liability, such as increased costs or reduced sales.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Are there any drawbacks to carbon management?<\/h2>\n\n\n\n<p>Companies might fear that measuring and disclosing their total carbon emissions could expose them to reputational risks. However, transparency should be considered a <a href=\"https:\/\/unfccc.int\/process-and-meetings\/transparency-and-reporting\/about-transparency\/what-is-transparency\" target=\"_blank\" data-dig-id=\"LP-92728-49894556\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"key part of your environmental sustainability strategy\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">key part of your environmental sustainability strategy<\/a> in order to build long-term trust with stakeholders. Avoiding disclosure could actually increase risk for businesses, as a lack of transparency can leave stakeholders and investors <a href=\"https:\/\/ccli.ubc.ca\/why-should-canadian-companies-disclose-climate-related-financial-information-if-not-required-of-them\/\" target=\"_blank\" data-dig-id=\"LP-92728-96bd6425\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"vulnerable to undisclosed climate risks\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">vulnerable to undisclosed climate risks<\/a>. Even if you\u2019re starting from zero, being upfront about your current impact and your commitment to improvement can help to build trust and credibility.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to create a carbon management plan<\/h2>\n\n\n\n<p>To get your company\u2019s carbon management plan underway, it can help to have the right team and <a href=\"https:\/\/carbonhound.com\/\" target=\"_blank\" data-dig-id=\"LP-92728-e63286b4\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"tools in place\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">tools in place<\/a> from the outset: Find experts who can guide you through the process, helping you navigate complexities of collecting accurate data, and choose the most effective approach to reducing GHGs.<\/p>\n\n\n\n<p>Here are steps to consider as you plan to launch and operate a carbon management plan:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Calculate your company&#8217;s baseline emissions<\/h3>\n\n\n\n<p>The first step in any carbon management plan is understanding your starting point: <a href=\"https:\/\/ghgprotocol.org\/sites\/default\/files\/standards\/ghg-protocol-revised.pdf\" target=\"_blank\" data-dig-id=\"LP-92728-fb58f129\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"Your baseline emissions\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">Your baseline emissions<\/a>. To do this, you\u2019ll need to collect accurate data on the activities that contribute to your total carbon emissions. The type of data you\u2019ll need depends on the business you&#8217;re in, but might include things like receipts and invoices from suppliers, energy bills, business travel data, surveys to learn about how employees commute to work, details on company vehicles and fuel purchases, and so on.<\/p>\n\n\n\n<p>Generally, anything you pay for or do within the business has an associated carbon footprint. Don\u2019t be overly ambitious about how quickly you can gather all this data. It\u2019s not always obvious up front which data (and how much of it) you\u2019ll need, and scope creep is a common experience. Getting the right tools or partners involved early can help manage expectations here.<\/p>\n\n\n\n<p>Once you\u2019ve collected the data, the next step is to convert it into carbon emissions. This means using standard conversion factors to translate activity data (like kilowatt-hours of electricity or liters of fuel) into greenhouse gas emissions. There are many tools and resources available to help with this process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Set an emissions reduction target<\/h3>\n\n\n\n<p>With your baseline emissions in hand, the next step is to set a reduction target. Make sure this target is science-based and aligned with credible organizations, such as the <a href=\"https:\/\/sciencebasedtargets.org\/\" target=\"_blank\" data-dig-id=\"LP-92728-420c8393\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"Science-Based Targets initiative (SBTi)\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">Science-Based Targets initiative (SBTi)<\/a>. A credible target ensures your efforts will have a meaningful impact and be taken seriously by others.<\/p>\n\n\n\n<p>When setting your target, strike a balance between ambition and reality. An ambitious target can energize your team and create momentum, but it\u2019s important to remain practical. Reducing carbon emissions is a long-term project, so ensure your goals are achievable over time. If in doubt, start small. It\u2019s better to reach for higher goals over time than to have to publicly (or privately) walk back your goals.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Identify emissions hotspots<\/h3>\n\n\n\n<p>Using your baseline emissions data, pinpoint activities that contribute the most to your total carbon emissions count. These are your emissions hotspots. It\u2019s worth comparing your data to industry benchmarks or competitors (you can learn a lot from greenhouse gas data tables in sustainability reports). These comparisons can help you determine where you might have a competitive \u2018carbon\u2019 advantage and where your emissions are unnecessarily high.<\/p>\n\n\n\n<p>Understanding these hotspots will allow you to focus your initial efforts where they\u2019ll have the greatest impact.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. Get started!<\/h3>\n\n\n\n<p>Once you\u2019ve identified your emissions hotspots, move into action. Begin by addressing hotspots that can be easily, quickly and cost-effectively reduced. These might include actions like switching to renewable energy providers, implementing sustainable travel policies or upgrading to energy-efficient equipment like LED lightbulbs, heat pumps or improved insulation.<\/p>\n\n\n\n<p>Securing a few quick wins is helpful to the success of your program,. It can also become a source of cost savings. For example, revising your company&#8217;s travel policy might reduce both emissions and travel expenses, making it a win for both your carbon management plan and your bottom line.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Set regular intervals for monitoring and reporting<\/h3>\n\n\n\n<p>Carbon management is like budget management \u2014 it\u2019s an ongoing activity. Decide how often you\u2019ll collect new data and report on your carbon reduction progress.<\/p>\n\n\n\n<p>Regular reporting is vital for maintaining momentum and accountability internally, and it can also unlock business benefits externally.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Carbon management is a journey for your business<\/h2>\n\n\n\n<p>Preparing your company for the net-zero economy is not a one-and-done activity, and neither is carbon management. The process of measuring and reporting greenhouse gas emissions is a journey that can equip your business to meet regulatory standards, gain access to investors and capital, and identify potential risks and opportunities for your business in the long- and short-term.<\/p>\n\n\n\n<p>To support clients on their journey to net-zero, <a href=\"https:\/\/carbonhound.com\/\" target=\"_blank\" data-dig-id=\"LP-92728-f2a40621\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"RBC works with Carbonhound\" rel=\"noreferrer noopener\" class=\"rbc-link-format\">RBC works with Carbonhound<\/a>, a climate action platform that helps companies measure and track their environmental impact. Speak to your RBC relationship manager today to learn more.<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Measuring, reporting on and reducing your company\u2019s carbon emissions can help Canada\u2019s transition to a lower-emission economy. <\/p>\n","protected":false},"author":132,"featured_media":92727,"parent":57338,"menu_order":0,"template":"wp-custom-template-optimizely-mmm","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"tags":[574],"rbc_content_type":[31],"rbc_audience":[110],"rbc_lob_group":[35],"rbc_difficulty_level":[70],"rbc_mmm_category":[305,391,326],"class_list":["post-92728","rbc_my_money_matter","type-rbc_my_money_matter","status-publish","has-post-thumbnail","hentry","tag-commercial-insights","rbc_content_type-article","rbc_audience-business-owners","rbc_lob_group-business","rbc_difficulty_level-intermediate","rbc_mmm_category-business","rbc_mmm_category-commercial","rbc_mmm_category-right-sized-business-advice"],"acf":{"contently_publication_id":"","custom_author":"Amelia Zimmerman","rbc_video_header":"","rbc_media_duration":"","rbc_toc_for_mmm_tag":"h2","rbc_toc_for_mmm_limit":6,"rbc_toc_for_mmm":null,"rbc_toc_for_mmm_action":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<meta name=\"description\" content=\"Carbon management involves measuring, reporting on and reducing your company\u2019s greenhouse gas emissions. 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