Climate change: How bogus carbon accounting is damaging UK efforts to get to net-zero emissions – Professor Ian Thomson

As we reflect on efforts to reach net-zero emissions, there are concerns that unsustainable business practices and inertia within industries may well lead to the downfall of our carbon-neutral future.

Under current international carbon accounting standards, cycle-to-work schemes for company staff can add to the firm's reported carbon emissions (Picture: Sean Gallup/Getty Images)

Whilst this does not account for all businesses, the fact of the matter is that most UK businesses are nowhere near on track to achieving net-zero targets. There are many reasons for these shortcomings but one of the most egregious is unreliable carbon accounting systems.

Recent research from the University of Birmingham Business School shows a worrying mismatch between the most used measures of carbon and their actual impacts, meaning bogus emissions claims are being made by businesses.

This means, when it comes to ‘decarbonising’ the country, it can be nearly impossible to identify impactful ways forward.

Under current international carbon-accounting standards, emissions from supply chains and after-sale product use and waste are excluded from calculations. This means that supermarkets selling food from local UK farms have higher reported carbon emissions than those importing their products from overseas.

It can also cause walking or cycle-to-work schemes for staff to add to reported carbon emissions, and nature-based solutions to be ignored altogether.

With this confusing and simply nonsensical way of measuring carbon emissions and the effectiveness of sustainability initiatives, it’s no wonder there is a lack of activity from business when it comes to net-zero.

A recent survey by Birmingham Business School’s Lloyds Banking Group Centre for Responsible Business demonstrated that an astounding 50 per cent of senior business decision-makers have no net-zero strategy whilst 74 per cent of British adults expect businesses to have one.

Further to this, there is a disproportionate focus on profitability; nearly a third of senior business decision-makers subscribe to the myth that success is exclusively linked to profitability.

Increasingly, consumers and investors are placing value on social and environmental justice. But few businesses are planning to take the necessary radical steps towards change.

More than that, businesses seem actively unaffected by public pressure; only seven per cent of businesses responded that a public boycott would make them more sustainable.

We must encourage all businesses to view sustainable practices and social justice as part of their business model and urge business and government to come together to work on more honest ways of measuring emissions.

With a climate emergency rapidly accelerating in severity, business must view it as a collective issue, not a luxury. With social inequality skyrocketing, and time ticking forward to our 2050 net-zero target, businesses must not only meet the expectations of the British public but take proactive steps to combat these issues, in turn, building trust and creating long-term strategies.

It has never been more crucial, or more urgent, for businesses to base their decisions on accurate, well-informed information, and the Birmingham Business School is continuing research to formulate a programme of suggested reforms that will allow for the realisation of the goals set at the COP26 climate summit.

If net-zero is ever to become a viable option for the UK, it is imperative that UK businesses recognise they hold the key to a much more sustainable future.

Professor Ian Thomson is director of Lloyds Banking Group Centre for Responsible Business at University of Birmingham, convenor of the Centre for Social and Environmental Accounting Research and a world-leading expert on carbon accounting.