The MPF Carbon Footprint Report 2008

MPF
Managing Partners Forum

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MPF Carbon Footprint campaign

Highlights
The MPF Carbon Verified list, the inaugural listing of firms that have had their footprint independently verified Online resource bank of information, standards, examples and great ideas

Beyond easy wins join us on the journey

Register of carbon valuers and offset sources Panel of sustainability champions meeting to share best practice

Guidance on sustainability accounting Best Sustainability Reporting category at MPF Awards

Nick Shepherd

Register of emission inventories and reduction strategies

Public pledge from leaders to verify carbon emissions using independent valuers More on page 10

Copyright Practice Management International LLP 2008. All rights reserved. The MPF Carbon Footprint report is distributed by Practice Management International LLP, Warnford Court, 29 Throgmorton Street, London EC2N 2AT, UK Tel: 020 7786 9786 Fax: 020 7786 9799 mpf@pmint.co.uk www.pmint.co.uk PMI LLP accepts no responsibility for loss of or damage, however caused, to any material submitted for publication nor for consequences resulting from the use of the information in this publication, nor in any respect for the content of such information. Managing Partners Forum does not endorse the opinions expressed or any products or services advertised in this publication or on its website. No part of this publication may be reproduced or transmitted in any form or by any means, or stored in any retrieval system of any nature, except for permitted fair dealing or fair use under applicable law, without the prior permission of the publishers. This report is printed on recycled paper

ll professional firms serve two constituencies: their clients and their staff. Both these constituencies are showing that they are increasingly concerned about climate change, and it is essential that professional firms respond appropriately. Even where the pressure from clients and colleagues to address climate change is muted, managing partners have the option I would say the obligation to show some leadership on this issue. And that is the underlying driver of the MPF Carbon Footprint campaign. Far too often (and in many cases wrongly) professional firms are perceived to be commercial laggards slow to adapt to change, conservative in their behaviours and unlikely innovators. In joining the MPF Carbon Footprint campaign, professional firms can be the first major industry group to join together to tackle what is surely one of the greatest challenges facing our society. Lets not get too excited: we have not found a solution to global warming. But the campaign will help

all professional firms to take the first steps on a journey in the right direction, knowing that others are heading the same way. The steps are not difficult: secure the commitment of senior management and staff, measure your carbon footprint, set the target for reducing the footprint and a timetable for doing so, implement the plan for reducing emissions, measure again, and offset any balance with an accredited partner. * keep people informed. My firm, Drivers Jonas LLP, started this journey in 2002 with the help of The CarbonNeutral Company. Whilst initially viewed with cynicism by some, the project quickly gained support. Now it is second nature for everyone in our business to implement our carbon reduction policies, and the challenge for us is to go further still down this road, whilst maintaining a hard commercial and competitive edge. I hope you will join us on this journey, for the sake of your clients, your staff and the environment.

Nick Shepherd Managing Partner Drivers Jonas LLP leader of the MPF Carbon Footprint Campaign

MPF Carbon Footprint Report 2008

Contents

Join the movement

Founded in 1995 with its HQ in London, the Managing Partners Forum is the premier association for those involved in the management of professional firms throughout the world. As well managed firms are more profitable and attractive to clients, the MPF actively campaigns for excellence in management. We find that fee earner attitudes often result in insufficient priority being devoted to management. To help alter attitudes in favour of management, the MPF highlights issues that stand in the way of effective management and campaigns through a combination of: hard-hitting reports and surveys; articles in the media; rigorous awards; well-attended events in cities worldwide; and extensive knowledge-sharing. Current issues include: Changing behaviour and systems to reduce carbon footprints Harnessing employee energy Selecting the right leader Creating an efficient after market for listed professional firms Enhancing contributions from management experts Hiring management talent Measuring the value of a firms brand The MPF believes that management requires expertise so we encourage firms to appoint experts to their boards and executive committees. Through our global Panels of leaders in marketing, HR, finance and other disciplines, we provide these experts, many promoted beyond their comfort zone, with free survey-based insights and tailored events to enable them to make a valued contribution at the table. The MPF executive committee comprises: Chair: Nigel Knowles DLA Piper Deputy chair: Ed Smith Ted Burke Freshfields Bruckhaus Deringer Sarah David Whitehead Mann Stephen Denyer Allen & Overy Neville Eisenberg Berwin Leighton Paisner Mike Francies Weil, Gotshal & Manges Alan Hodgart H4 Partners Rodney Kaye PricewaterhouseCoopers Peter Matthews Ernst & Young David Miles BDO Stoy Hayward Gareth Pearce Smith & Williamson David Pester TLT Solicitors Michael Strong CB Richard Ellis Executive Directors: Richard Chaplin and Paul Lemon Our members consider our contribution to be significant and appreciate our energy, commitment and insights. Further information is available at www.mpfglobal.com.

Do leaders always have to go along with the consensus? A recent survey of boardroom attitudes suggests that while leaders and the younger generation are strongly in favour, less concern is expressed by shareholders and non-executive directors.

Is the boardroom heating up?

Improving sustainability

Most leaders start on easy wins before tackling the areas that really touch partners. We hear from firms that are encouraging everyone to travel less and make greater use of video conferencing.

Staying ahead means a carbon inventory. Emil Breza explains how to select your auditor, scope the work, what the auditors report should contain, and why findings must be shared with clients as well as employees.

Preparing for a carbon audit

The MPF Carbon Verified List 2008

The inaugural listing of the professional firms worldwide that have had their carbon footprint independently verified with aggregate emissions by type of client base.

10

The MPF campaign covers far more than pledges, protocols and resource banks. Joining up carbon management, employee engagement and external communication is the management agenda most likely to win over sceptical partners.

Introducing the MPF campaign

Practical guidance from a pioneer

KPMG has had a public environmental policy for eight years. Mike Kelly shows the benefits of a long term consistent approach to environmental issues and highlights a range of practical dos and donts.

12

15
2

Fast growth usually results in increases in the absolute level of emissions. Yet asking partners to voluntarily curb growth to save the planet quickly leads to new management.

Offset is part of the mix

MPF Carbon Footprint Report 2008

Is the boardroom heating up?

The carbon credentials of all suppliers, including professional service firms, are likely to come under the microscope as more boards embrace a green agenda.
up the planet, but its in our boardrooms where you will find people sweating the most. Until now it has been taken as read that business leaders are going green, and that they have been happy to go along with the broad intellectual consensus on the causes and implications of climate change. Our recent study shows hard evidence of the first signs of a split in the boardroom against this green orthodoxy. In a nutshell, there are as many opinions as there are shades of green but broadly our interviewees broke down into believers, opportunists, agnostics and sceptics. Many business leaders are deeply worried by the economic frictions that will occur as companies chase the twin goals of sustainability and profit. So where is the pressure coming from in forcing senior leadership to give the issue serious air time in the boardroom? A number of our key findings can be seen in the table below. One energy CEO said: The younger generation expects to work for a company that cares about the environment and is contributing to it that is very important. However, many of our business leaders expressed deep frustrations at the difficulties in carrying out their ambitions. None of the 108 interviewees said that they were under pressure from shareholders to make changes to their business strategy because of green issues. However, in companies where the chief executive is an enthusiast, the shareholders are persuaded that going green is a benefit to the company and, therefore, to the bottom line. They also disclosed that they found many nonexecutive directors on their boards tended to be indifferent if not uninterested in the whole eco-sustainable debate. There is evidence that the green shoots of action are beginning to emerge in the boardroom. Our survey revealed that the issue is getting more airtime during board meetings and some 10% of senior leaders are linking board remuneration to performance against climate change objectives, whilst other interviewees said they could envisage this happening with their own organisations in the short to medium term. It would be safe to assume that within professional services we will need to give serious thought to how we respond to the issue. During a recent business development meeting with a senior executive, it was made clear to this author that all suppliers are under the microscope and was asked so what are you doing about it within your firm? Is the boardroom heating up? This author believes it is, and that it is likely to get warmer still.

Neil Pennington

rompted by the UK government-sponsored Stern Report, Whitehead Mann undertook a study to discover what business leaders are really thinking about climate change issues and what they believe the implications are for their business strategies and their leadership responsibilities. During the summer of 2007 we interviewed 108 senior executives from public and private companies and other large organisations based in the UK, France, Germany and Hong Kong. We asked if concerns about climate change are affecting the way they run their businesses, altering their approach or influencing their recruitment planning. Global warming may be heating

Neil Pennington is co head of the Climate Change and Sustainability Practice at leadership consultancy partnership Whitehead Mann.

MPF Carbon Footprint Report 2008

Improving sustainability
Professional firms are using their ingenuity to tackle climate change. They may not quite be at the stage of making hydro-electric power in the Thames or the Tiber but it is not something to rule out forever. In the meantime, composting schemes are starting up in city centres; car pools are appearing in the countryside; green energy is in excess demand; partners and staff are drawing up plans together. Some of the most active firms in this field tell Neasa MacErlean exactly what they are doing.
tonnes pa per head and it thinks it could get to 1.8 or so. (A 2.1 level is impressive, under half the level of most other firms we spoke to.) About 100 UK employees in consultancy WSP Environment and Energy have signed up to a personalised carbon tracking scheme and will be fined or rewarded for their usage when the first years tracking is complete in October 2008. 2 Business travel. KPMG Ireland, Drivers Jonas, property consultant Davis Langdon and lawyers Beachcrofts are among firms using video conferencing. Davis Langdon is introducing incentives to encourage partners and staff to chose energy-efficient vehicles for company cars. Several firms are encouraging more train than plane use but this is problematic across borders, especially (as is usually the case) when people are under considerable time pressure. Engineering consultancy WSP in Sydney Australia has bought a lowemitting hybrid car as its pool car, while its sister company in Malmo, Sweden has office bikes in the vehicle pool. 3 Commuting. Plans to increase flexible working should reduce commuting to work, says Jeffery Ng of Beachcrofts. The promotion of more home-working will have a similar effect at Simmons & Simmons. Car-pools in the countryside and season ticket loans for urban and city commuters also help. About 4 per cent of accountant BDO Stoy Haywards employees have used their tax-efficient bike to work scheme as well as the showers and lockers and people who want to run to work are also encouraged. 4 Waste. Replacing plastic cups with mugs and making double-sided photocopies are two of a broad range of measures being introduced at Beachcrofts. KPMG Irelands replacement of plastic by wood disposable cutlery in its staff canteen has been our most controversial measure in terms of very positive and very negative reaction!, says Jim Clery, the tax partner in charge of the firms sustainability programme. Simmons & Simmons has started composting all kitchen waste (from staff canteen, client dining rooms and special bins for staff eating at their desks) at its City of London-based 36-storey head office. A specialist organisation, the East London Community Recycling Partnership takes away the food waste each day and the matured compost is given to schools and those staff who want it. 5 Recycling. Recycled paper is used in all photocopying and printing machines and for all letterhead at KPMG Ireland. Staff are being given reusable water bottles for use at the offices water fountains in US law firm Chadbourne & Parke. Davis Langdon has set a target to recycle 60 per cent of waste. 6 Green energy. Demand exceeds supply in the UK of sustainable energy and firms cannot yet buy as much of it as they want. We are currently supplied with Good Quality Combined Heat & Power [an efficient, but not green, type of electricity from supplier Scottish and Southern] energy and hope to successfully lobby our landlord to source a 100% sustainable green tariff later this year, says James Clark, facilities manager of

here is no magic formula for making the activities of your firm less damaging to the environment and more sustainable but there is a set of steps that just about each organisation needs to consider. Below we list the main ones and explain what the best firms are doing.

1 Measurement. You cannot tell the size of the problem, nor whether you are improving or getting worse until you have your footprint (carbon and otherwise) measured. Property consultancy Drivers Jonas had its footprint measured in 2004 and thinks it was the first sizeable property consultancy to go carbonneutral when it did so in 2006. Its CO2 emissions level is down to 2.1

MPF Carbon Footprint Report 2008

Simmons & Simmons. Business may need to lobby the government to increase supply of green energy. Provision is very much a political issue. Portugal, for example, gets 40 per cent of its energy from wind, wave and other green sources. 7 Energy-saving. All KPMG Ireland printers/faxes/scanners are on a 45-minute powersave mode (so they switch off if unused after 45 minutes). Energy-efficient lightbulbs are widespread in most firms. Davis Langdon and Beachcrofts have switchoff campaigns. All bathrooms are being refitted to use less water in Chadbourne & Parke. BDO has a clever chilled beam cooling system which heats, cools and lights, and ensures (unlike traditional, inefficient systems) that no spaces are ever being heated and cooled at the same time. 8 Suppliers. All suppliers to Simmons must have a credible and relevant environmental policy. Beachcrofts is about to start talking to suppliers especially taxis, deliveries, couriers, stationery, office supplies, catering and vending. 9 Staff involvement. Perhaps one of the great unexpected management spin-offs of the sustainability

Cycling to work

drive is the way in which partners and staff are working ever-more closely together. The importance of the issue appears to cut through hierarchies and bureaucracy. In the course of researching this article it became clear to MPF that senior partners are willing to give up time to talk about the subject and that relatively junior staff are given fairly free rein to speak to the media. 10 The future. Many of the easy wins have already been made and further progress will be harder.

Simmons & Simmons cut its CO2 emissions 19 per cent from 5.7 to 4.6 tonnes per head between 2006 and 2007 largely because of a switch in its energy procurement. As the quick wins run out, well need to be more innovative to continue chipping away, says James Clark. And sometimes firms will take steps backwards if, for example, they win contracts on the other side of the world and staff begin flying more. Very controversial issues could cause controversy among staff who have been encouraged by the sustainability drive to get involved and get judgmental. For instance, it would be a brave firm that tried justifying procuring nuclear power to staff even though nuclear power can be described as green. Moving to new buildings will provide opportunities. KPMG Ireland, commissioning developers this year, expects to move within four years into a far more energy-effective property which can pump heat from the ground and use clever ventilation and shuttering to cut its energy use. In the long run, firms including Simmons, BDO Stoy Hayward and Drivers Jonas say that self-generation of energy is possible. I can see a world where we would, says Joanne Dooley, corporate responsi-

Video conferencing in action

MPF Carbon Footprint Report 2008

There are thousands of companies providing green products. These are some of the companies being used by professional firms.
BUILDING DESIGN The seven environmental sins of refurbishment are committed in the fields of timber, water, flooring, lighting, waste, furniture and heating & cooling, according to fit-out and refurbishment contractors Overbury. But you can often save money (on lighting, for example) or break even (by using the right timber) by working with the environment, say the firms experts. ENERGY British Gas offers a 100% green electricity product to customers (see British Gas Business), as do the other energy suppliers including EDF, Scottish and Southern, NPower and ScottishPower. Scottish and Southern claims to be the leading generator of renewables. ENERGY SAVING UK developer, 1E has produced a programme called Nightwatchman through which individual PCs can be closed down remotely. So firms could shut down all PCs left on at 8pm, for instance. People still working on their PCs can be sent a message giving the option to stay connected. SuveyorTM, another PC power management solution, developed by Verdiem, has an independently verified reporting capability which reports annual power savings in both pounds and carbon tonnes. This application can provide a quick win for CSR strategy by immediately generating verifiable year-on-year energy savings, sending positive message to stakeholders. LIGHTING There is a vast choice of long-life, efficient light bulbs and lighting systems. Websites such as www.greenconsumerguide.com and www.ebulbshop.com explain the types and products available. MEASUREMENT Businesses who want to measure their carbon outputs as a whole or by department can use an online service developed by
bility manager at BDO Stoy Hayward. As well as the environmental benefits, rising energy prices will make it become more cost-effective to generate your own energy. Alan Lattimer, chief oper-

SUPPLIERS OF GREEN SERVICES AND PRODUCTS

CarbonAccountable.com. The software supplied allows you to chart the outputs of single individuals or organisations of thousands of employees and to project the carbon effect of business decisions such as recruiting more staff in particular locations. BT has created its 'carbon impact assessment' which helps firms analyse their CO2 footprint and then use technology (see Telecommunications below) to reduce it. TELECOMMUNICATIONS Cable and Wireless, BT Corporate Business and Affiniti are among the best known names bringing together all telecoms, PC and video conferencing into unified systems. These systems can particularly help mobile or flexible working and working from home. TRANSPORT Radio Taxis, the London-based taxi group started using E3, the first bio-fuel created specifically for taxis, in July 2007 as part of a move to become carbon-neutral. CO2 emissions are cut 7% by E3, says the company, and there is also a 9% mileage improvement. The company also offsets its emissions. Measurement and analysis of emissions made through travel is offered by Capita Business Travel which also helps businesses design and enforce travel policies. VIDEO CONFERENCING Cisco TelePresence is a video conferencing system done on life-size dimensions (using 60 inch plasma screens), in real time, using spatial sounds (to connect each persons voice to their place in the virtual meeting). You forget the technology, says Richard Given of Cisco. Asysco, Electrosonic and Tandberg are other well-known names in video conferencing. WiredRed has real time communication products which are made for use on PCs including multiparty conferencing, web conferencing and secure IM software.
move the issue forward, he believes: Unless our planning laws change to allow us all to have wind turbines on our roof tops I think it is difficult to see how this can progress in the short term.

ating officer of Drivers Jonas supports calls for laws requiring new commercial buildings to include the capacity to generate 10% of their own energy needs. Changes in legislation would be required to

MPF Carbon Footprint Report 2008

Preparing for a carbon audit

Carbon audits have four stages: appointing an auditor; clarifying the scope; collecting the data; and the audit report. Emil Breza explores the process in more depth.
A firm must follow internationally accepted procedures and protocols, and implement suitable systems to ensure that any published footprints are accepted. Each firm is likely to have its own approach based on its structure. For example, a single site firm has different challenges when reducing emissions compared with a multi-site firm. It is important to create a reliable system to track any expenses that contribute to a firms carbon footprint. Completing a carbon inventory typically involves four stages: Appointing a service provider. A number of companies provide GHG services, ranging from sole proprietors to multinationals. Because measurement is so closely linked to legislation, any provider should be well versed in relevant accounting standards, as defined by ISO 14064 and the WRI/WBCSD GHG Protocol. Fees vary widely depending on the level of detail, and how far the firm wants to take its reduction strategies. An initial meeting should be held to clarify the level of detail for the inventory, for example direct electricity, building heating and cooling systems, and employee transportation and travel. The firms employees should work with the provider to assemble the required data and information. Valuable time is saved if this is already being tracked. Once the information has been assembled, the providers report should contain: a detailed assessment of the firms carbon inventory; scope and methodology of the audit; future GHG/environmental goals of the firm; and recommendations on how the firms footprint can best be reduced in future years. It is recommended that the findings of the report be communicated to the firms employees and external clients as this should favorably influence engagement.

anaging greenhouse gases (GHG) and mitigating climate change are serious issues facing every business. The questions that leaders have to ask are no longer why or when but how to select a risk management strategy for climate change and associated legislation that fits with their firm. There are several compelling reasons to adopt a GHG strategy: It leads to operational efficiencies as it forces firms to analyse their operations in greater depth. It feeds into corporate responsibility initiatives and serves to make a firm more desirable to existing employees and recruits, and its services more attractive to clients. It is rapidly becoming essential for competitiveness. Managing emissions may be the easiest way to stay ahead, but you cant manage what you dont measure. Carbon assets and liabilities dont show up on a traditional balance sheet so a carbon inventory must be completed. This determines the carbon footprint and assists in identifying opportunities to reduce carbon emissions and operating costs. Several issues should be considered before undertaking a carbon inventory: Each country is likely to introduce its own guidelines, so be aware of any legislation that applies.

M
Emil Breza

The report should be treated as just the first step in a journey, requiring constant monitoring: Energy efficiency projects, ranging from energy efficient light bulbs to motion-sensor light controls to automatic temperature controls, are an easy way to minimise energy use and reduce a firms footprint. Purchasing green power also makes good sense. The environmental impact of business travel can be severe. Alternatives such as video conferencing, rescheduling arrangements or using alternative (less costly) transportation go a long way towards reducing the footprint.
As a final step, offsets or carbon credits can be purchased to achieve reduction targets or even carbon neutral status. Successful offset projects in Canada include: methane gas capture from landfill gas sites and biogas capture from dairy farm wastes. Remember that while purchasing offsets can be appealing, they do not negate the need to reduce a firms own carbon output. Emil Breza is director of Greenhouse Gas Advisory Services at accountants BDO Dunwoody, the Canadian member firm of BDO International. BDO has created a unique GHG capability in Canada. For more information contact ebreza@bdo.ca.

MPF Carbon Footprint Report 2008

MPF Carbon Verified list 2008

Welcome to the inaugural listing of the professional firms worldwide that have had their carbon footprint verified by an independent valuer. Most are at the start of a long journey, so individual emissions are not provided. The MPF recognises that there are lots of ways for firms to demonstrate a commitment to the environment and to reduce their carbon footprint without going through a formal measurement process. But we believe that the very process of measurement kick starts awareness, and more importantly facilitates tangible assessment of progress. If using footprint data to influence different audiences, remember that: For as long as the data is used to encourage partners and employees to change behaviour, self-measurement will be a quick and inexpensive route. A myriad of free guidance notes, spreadsheets and on-line calculators will be readily available from MPF and organisations such as The CarbonNeutral Company, Carbon Trust, Business in the Community and the Legal Sector Alliance. When influencing external audiences such as clients, graduates or the media, pressure will be encountered for the data to have been subject to independent verification to instil public confidence. A summary of the valuers used by MPF Carbon Verified firms will be available. This should assist when preparing shortlists for carbon audits. In spite of best efforts, we suspect that a few firms have been omitted. We apologise in advance. An up-todate list will be maintained on the MPF website and formal certificates issued for public display so please inform MPF should your firm qualify for inclusion. No cost is involved.

FIRM

Allen & Overy AMEC Anderson Strathern BDO Stoy Hayward Beachcroft BI Worldwide Biggart Baillie Brabners Chaffe Street Clifford Chance CMS Cameron McKenna Corrs Chambers Westgarth Davis Langdon De Brauw Blackstone Westbroek Deacons Deloitte Drivers Jonas Ernst & Young Eversheds Faber Maunsell Freshfields Bruckhaus Deringer Garrigues GHD Harper Macleod HBJ Gateley Wareing Helix RDS Herbert Smith Hill Dickinson ICF International KPMG Lewis Silkin Linklaters Logica Mace Minter Ellison Mishcon de Reya Mott MacDonald Mundays Pannone Paris Smith & Randall PricewaterhouseCoopers Sheppard Robson Shoosmiths Simmons & Simmons SJ Berwin Smith & Williamson Stephensons Taylor Wessing TLT Solicitors Veale Wasbrough Wragge & Co

SECTOR

Law Consulting engineering Law Accountancy Law Management consultancy Law Law Law Law Law Construction consultancy Law Law Accountancy Property consultancy Accountancy Law Consulting engineering Law Law Consulting engineering Law Law Management consultancy Law Law Management consultancy Accountancy Law Law Technology Services Project management Law Law Consulting engineering Law Law Law Accountancy Architectural services Law Law Law Accountancy Law Law Law Law Law

HQ COUNTRY

UK UK UK UK UK UK UK UK UK UK Australia UK Netherlands Australia UK UK UK UK UK UK Spain Australia UK UK UK UK UK USA UK UK UK UK UK Australia UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK UK

MPF Carbon Footprint Report 2008

CO2 tonnes pa per head by type of client base

Methodology The leaders of over 1,200 professional firms in eight sectors were formally asked whether their firm had had a carbon footprint audit carried out by an independent valuer. The analysis by HQ country was approximately 60% EMEA; 35% North America; 5% Asia/Pacific. Verification by a separate clientfacing division of the same firm was deemed independent provided the other division regularly provided equivalent services to external clients. Those that had their firms footprint independently verified were asked to provide the name of the valuer, the date of the last valuation, CO2 emissions in tonnes pa per head, and the proposed frequency of valuation. The name, sector and HQ country of all firms that have had their carbon footprint verified independently were listed alphabetically. The average footprint and the min/max range were derived from the data, with firms segmented by type of client base: local, national, international. A summary of the leading valuers was derived from the data. Defining a professional firm The MPF defines professional firms as organisations whose products and services are based on professional expertise rather than on discrete products or commodities. To qualify, 80% of an organisations core business activities must require a specialised knowledge of a subject, field or science, and satisfy at least four of the following six criteria: Involves higher level education and usually a formal qualification. Regulated by a professional body, licensing authority or similar. Has an ethical code of practice. Do not derive significant financial benefit from service or product providers that are recommended. Services can be infrequent, technical or unique. Selection is usually based on a mix of skill, knowledge, reputation, ethics and creativity.

Valuers

Frequency of measurement

MPF Carbon Footprint Report 2008

A wake-up call
MPF Executive Director, Richard Chaplin, explains why the MPF embarked on its Carbon Footprint campaign and some of the leadership challenges that can be expected.
ment in real, permanent and additional carbon offsets. CAMPAIGN OBJECTIVES MPF is committed to growing the wealth creation potential of the professional services sector while reducing, in absolute terms, the GHG emissions associated with our individual and collective operations and services. The overarching objective of the campaign is to promote deep and absolute reductions in GHG emissions among firms such that the professions are recognised as a leading force in the fight against climate change. We would like to go one step further and become the first industry group worldwide to go carbon neutral. CURRENT POSITION MPF approached the leaders of over 1,200 professional firms in compiling this report. While acquiring carbon credits to offset partner air travel and seeking to become more energy efficient is becoming common-place, North American firms do not yet appear to be measuring their firms carbon footprint using independent valuers, although many are reviewing the position as saving the planet rises up the local political agenda. In the UK and Australia by contrast, 20% of the larger firms are measuring their carbon footprint (half using an independent valuer), according to a recent Professional Marketing Forum Snapshot survey on sustainability, with a further 35% saying that this is under consideration. 17% of these firms are also modelling the carbon impact of new projects. ENGAGING YOUR PEOPLE Firms have a responsibility to bring clarity to the debate around climate change and to help their people understand what they can do not only at work but also at home. Giving your people a clear understanding of what climate change means for their own firm puts them in a better position to promote the firm and to deliver on corporate goals. Is it a coincidence that a higher proportion of the firms qualifying for inclusion in the MPF100 Best Professional Firms to Work For have had their carbon footprint independently measured than nonMPF100 firms? Best Companies,

limate change is the single biggest environmental challenge that we face. Whatever your personal views on sustainability, we in professional services occupy a privileged place within the business community and people look to us for a lead. The MPF campaign is intended as a wake-up call for leaders, partners and employees to follow the example of a pioneering group of firms, based mostly in the UK and Australia, which have truly embraced the sustainability agenda.

Richard Chaplin

BACKGROUND Scientific knowledge on climate change and its likely impacts demand an urgent and substantial response to cut greenhouse gas (GHG) emissions. Scientists are calling for a 60-80% absolute reduction in global GHG emissions by mid-century. In order to achieve this, a comprehensive strategy is required that comprises measuring and monitoring GHG emissions at all levels of society, setting targets for cutting these emissions and implementing strategies to achieve these targets through a combination of Internal attitudes to sustainability in the eyes of 131 marketers and managing partners at-source cuts and invest(Source PM Forum Snapshot Survey, May 2008)

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MPF Carbon Footprint Report 2008

CARBON FOOTPRINT CAMPAIGN DETAILED ACTIVITIES

Encourage professional firms based through the world to sign a public pledge to: - Measure and analyse emissions with a single protocol, using third parties to verify accuracy, - Set absolute annual reduction targets and implement a carbon management strategy which decouples enterprise growth from emissions, - Publicly report emission inventories and progress against reduction targets on an annual basis using common protocols - Encourage and share practices that successfully reduce GHG emissions, Maintain the MPF Carbon Verified list of the firms worldwide that have had their footprint independently verified. Establish an information resource bank, including but not limited to: - A single prescribed emission measurement and reporting protocol, - A register of approved consultants and auditors for measurement and verification of emissions inventories, - A dedicated public register of participating firm emission inventories, reduction targets, reduction strategies, and annual progress reports, - Standards for offsetting, and a list of reputable sources for carbon offset, Maintain a dedicated or third-party learning and information sharing platform to promote successful practices among firms. Encourage firms to appoint a sustainability champion with suitable authority. Create an MPF Panel for sustainability champions to share best practice. Recognise leadership in communication through a new Sustainability Reporting category at the MPF 2008 European Practice Management Awards.

agnostics or sceptics is nearer 80%. It is perhaps unsurprising that many leaders have therefore gone for easy wins (plastic cups, energy efficient light bulbs, etc) before tackling partner sensitive issues such as more video conferencing and less air travel. A recent MPF Pulse question asked leaders worldwide how they were dealing with sustainability sceptics, generating the following advice: Demonstrate that environmentally friendly policies help your practice, generate material financial savings and ultimately improve the bottom line, Remind sceptics that clients, especially those in the not-forprofit and public sectors, want to know what initiatives a firm is taking, Many associates are very concerned about environmental issues. Partners need to keep on the pulse to retain these key financial contributors, Form a CSR committee, meeting monthly, with representation from partners, management, fee earning, secretarial and admin staff. Committee members should canvass staff for issues. Agenda and minutes should appear on the intranet. Agreed actions should be followed up, Get on with the programmes, communicate to and involve all staff, highlight the clients who care about your environmental stance, make the link to winning work in climate change, and enter competitions/indexes to bring focus to areas where you can improve and generate news to promote. SUMMARY There have been ongoing debates to protect our planet for decades. Now is the time to start working together to build a sustainable way of life: personally and professionally. Todays eco actions will be tomorrows baselines. Richard Chaplin is founder and executive director of the Managing Partners Forum and the PM Forum.

Further details can be found at the MPF website (www.mpfglobal.com).

conductors of the Best Professional Firms research, observe that where a firm is seen by its people to be contributing to the community and the environment, a far higher percentage of those people are likely to be strongly engaged. EFFECTIVE COMMUNICATION Communication requires a champion and the right messages. The MPF is highlighting leadership in communication through a new Sustainability Reporting category at the MPF 2008 European Practice Management Awards. It is surprising how much we were doing before an effective committee was formed, but we failed to communicate it, comments one managing partner. Only 30% of firms have appointed a formal sustainability champion; only 19% of their websites have a focus on the firms contribution to a sustainable world; and only 9% produce a formal sustainability report for employees or clients, according to the Snapshot survey. DEALING WITH SCEPTICS Sustainability is partly about what firms are doing to save the planet, but as much about internal attitudes. The Snapshot survey indicates that the younger generation and leaders are strongly in favour but that partners are more sceptical (see chart opposite). Drilling deeper into the data suggests that the figures may understate the true level of partner scepticism as those in the know (ie. the leaders) believe that the proportion of partners that are either

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The KPMG story

KPMG published their first environment policy in 2000. Mike Kelly sheds light on their experience of managing carbon emissions and highlights key lessons learned.
reduce it then that should be part of a wider discussion around the whole environment strategy. carbon footprint of the supply chain is not something that is generally captured by existing management information systems but the expenditure on business travel is. For KPMG the first cut in 2001 included energy in buildings we occupy as well as business travel by car. The energy data, gas, electricity and oil, was needed as part of a broader project to look at the efficiency gains of procuring these goods from a single supplier rather than simply measuring for measurements sake. At that time the UK government was introducing the climate change levy and as part of our broader approach our electricity tender asked for the comparative pricing from sourcing electricity from renewable sources. We did find that the information most valued by potential suppliers was our ability to forecast when and how much energy we would be drawing from the grid; rather than simply the financial size of the contract. Our own use of that data allowed us to benchmark comparable buildings and look for further efficiencies in the way in which the buildings were run as well as consider specific investments. We now have a Utilities Steering Group (which includes water management) chaired by our European Head of Facilities and including attendance by two key suppliers who address all aspects of our performance. This ranges from the changing needs of the IT functions through to the comfort of our people at work. We know that a well managed office environment supports our people and poor conditions impact on efficiency and productivity as well as increasing our environmental impacts. HMRC guidance around mileage

K
Mike Kelly

Calculating our carbon footprint

PMG has had a pro-active approach to environmental issues for a long time our environment policy was first placed in the public domain some eight years ago. This long term commitment to addressing issues of consumption patterns, resource use and of course climate change means that we have been measuring and managing our environmental footprint for a long time before it became fashionable to do so. Our work has influenced investment decisions, particularly around our new head quarters building being constructed in Canary Wharf and our management systems; we are still the only professional services firm to have all of its UK offices certified to the International Management Standard ISO 14001. We do consider it important to know what our carbon footprint is and how to influence it, however there are a large number of steps to be taken before a professional services firm focuses on the carbon footprint itself. The detail below deals with carbon footprinting but it would be wrong not to flag up the need to take a much more strategic approach to all environmental issues, one aspect of which would be the reporting mechanism and methodologies. If the purpose of measuring the businesses carbon footprint is to consider how best to

LEADERSHIP AND OWNERSHIP The carbon footprint for KPMG is reported to the Board regularly and in a form that enables all Board members to quickly identify where our environmental impact is lightest and broken down geographically as well as by sources of carbon. The engagement at Board level means that the discussions on specific environmental strategies are grounded in the reality of the business strategies and integrated into decision making rather than an add on or after thought. It takes a cross-functional team to put together the numbers for the Board and the role of the CSR function in the process is that of collator of information rather than owners. This has two explicit benefits: the individual functions and disciplines own their aspect of the carbon footprint of the firm and the decisions on actions to mitigate or adapt are made as business decisions by those with the ability to make them happen which is not the role of the CSR function. CARBON MANAGEMENT The first decision to be made is what is to be measured; this might seem obvious but there are no global standards in this area, they are under development but there is guidance from National Government as well as the EU and specific industry and sector standards. The boundaries of responsibility and the existence or otherwise of measurement systems generally dictate what is to be measured. For instance, the

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SOME DOS AND DONTS OF CARBON FOOTPRINTING

Decide which Greenhouse Gases you are going to report on It seems obvious but a lot of businesses are simply focusing on carbon or carbon dioxide and using the two terms indiscriminately. Ultimately all businesses will end up reporting on all of the greenhouse gases (GHG) captured within the Kyoto Protocol in order to comply with future regulation. These include carbon dioxide, methane, nitrous oxide, hydro fluorocarbons, per fluorocarbons and sulphur hexafluoride. For professional service firms they are mostly likely to be found in office air conditioning systems and in waste that is going to landfill and whilst the volume may be just a fraction of the CO2 emissions generated from say business travel they are a lot more potent for sulphur hexafluoride more than 20,000 times the potency. Decide the scope of your reporting There are a lot of guidelines to choose from regarding what is in and out of scope but a good first step is to use the GHG Protocol which sets out in a clear and logical format the differing scopes that can be applied by a business and gives you a method of benchmarking your emissions against another business reporting in the same way. Most will start with Scope 1 the most limited which covers a firms direct emissions from fuel used, ie. oil or gas in heating and cooling as well as business car travel. Most will add in electricity purchased (Scope 2) but very few have got as far as Scope 3 this includes all of the above as well as commuter travel, business travel via public transport, business air travel, waste disposal, energy consumed at client sites and so on. International Measurement Standards There are many recognised standards to choose from to assess your emissions and having settled on what you are reporting you need to decide which standard and the associated scope. The guidance issued by DEFRA is clear and unambiguous with the advantage that any UK based regulation will take account of the guidance issued by them and so will ensure that your reporting processes will be fit for purpose in future regulations. If you want to take a broader view geographically then the most widely used are the work of the GHG Protocol and the World Business Council for Sustainable Development (WBCSD) who have published their guidance extensively and made it freely accessible. This gives you a global framework within which to place your reporting and a reference for the differing environmental dimensions in differing regions for example, geo thermal energy in New Zealand has a much smaller footprint than brown coal in Australia. The devil is in the detail Even when you have agreed the framework to be used, defined the scope and set the parameters for what you will be assessing the harder work is still to be done. Given that the real purpose of measuring is to manage then working through all of the business processes to calculate their relative emissions is only the first step. This in itself is difficult but is a pre-cursor to setting challenging targets. No business describes in great detail the process they have gone through to collect the data it makes for dull reading. But in the absence of guidelines about how to collect this type of non-financial data it would be the most useful contribution businesses could make. Finally targeting Much has been said about additional regulation and over the next couple of years business can expect a lot of regulation at the local, national, regional and global level to be rolled out. If you intend setting a target stretching or otherwise then a clear understanding of these is absolutely paramount. With them you know what will be the minimum and when, without them you risk the embarrassment of aiming too low or too impossibly high.

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fits with the staff selected charity. All of these programmes need constant refreshment and targeted innovative communication if they are to remain at the front of peoples mind and help embed change. THE FUTURE It will not be too many years before all of the emerging standards and systems in this area come together and there is a common global standard. This will help us all to understand our own businesses performance more clearly and challenge ourselves more robustly to achieve more. We are due to occupy a new head quarters building currently under construction in Canary Wharf, London in 2010. At that time we will know whether all of the environmental strategies adopted will operate as planned. It is designed to exceed all current regulations and to be future proofed for the medium term. Our people can now talk about tri-generation as an energy strategy and the benefits or otherwise of a sedum roof. We do not yet know what the market will be for recyclates but by thinking it through now we will be better prepared when that day comes. Increasingly our clients expect it and our people, whether potential employees or alumni, do so as well. Our current employees are all part of that journey. Finally it is expected that a global agreement on targets for emission reductions will emerge before the end of 2009. With this the long term framework within which we all operate will have greater certainty and that will support longer term investment decisions. This will drive the environmental technologies market and carbon foot printing will be one of the parameters used in such decision making. Mike Kelly is head of KPMG Europe LLPs Corporate Social Responsibility function, where he leads the implementation of the firms strategy to embed responsible business practice across the whole firm.

Artists impression of KPMGs new HQ building in Canary Wharf, London

allowances and the alignment with the carbon emissions of the vehicle mean that it is quite a simple exercise to map financial spend across to the carbon load from this mode of travel. It is also a very good time to promote car sharing for environmental, economic and societal reasons. None of our clients would expect a team of four to arrive on site in four separate cars nor would it in any way add to the strength of the client relationship. Additionally by incentivising drivers to take passengers we have avoided between 600,000 and 800,000 miles of travel a month. Since that first iteration we have worked across the different business functions so that now we can report on our impact from air travel and the carbon equivalent emissions from the waste we send to landfill. This latter aspect is frequently overlooked but is a significant proportion of the footprint for any office based service business. SOME OF THE CHALLENGES The scope of what we are measuring is not the entirety of our footprint and takes no account of the

embedded carbon in our buildings or vehicles. If you really adopt a life cycle costing methodology then you will want to know whether changing a vehicle to a newer more efficient one will reduce your overall carbon footprint or if the carbon cost of producing it outweighs any savings in revenue terms. Likewise measuring the embedded carbon in a building new or old is in the too difficult box at the moment. Further scope issues arise such as commuter travel to work and the impact of suppliers providing the business with goods and services. As the systems have developed we have added additional dimensions and coupled these with programmes to address behaviour change. For example, we previously ran a suggestion scheme with environmentally focused prizes open to all staff, suppliers and clients as well challenging them to suggest how we might change for the better. Internally our Responsible Consumption programme is now in its fourth year. This looks at all aspects of office life and in recognition of any environmental (and financial) savings shares the bene-

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To offset or not to offset?

The shadow price of carbon is getting ever more expensive. Bill Sneyd explains how acquiring carbon credits, better known as offsetting, contains costs as well as conferring a competitive advantage.

emissions when other entities and even countries do not? Surely that is competitive suicide? Michael Porter, writing in the Harvard Business Review (October 2007) put his finger on the competitive issue when he wrote:

imposing a $50/tonne price of carbon dioxide on their investment decisions regarding new power generation in the US. This provides a clear insight as to why companies are so interested in defining carbon strategies to decouple profitable growth from greenhouse gas emissions. In simple terms, investments made today (in plant, processes or products) are likely to define the carbon footprint of a company for decades to come. Making those investment decisions without considering the value at risk from the rising cost of carbon puts companies at a competitive disadvantage. Offsets are a critical cost containment measure in corporate carbon management strategies. They expand the range of reduction opportunities for achieving stretching targets while reducing

T
Bill Sneyd

he prevailing scientific and economic consensus reflected in the InterGovernmental Panel on Climate Changes 4th Assessment Report (2007) and the Stern Report (2007) is that an absolute reduction of between 60-80% in global greenhouse gas emissions is required by mid century to prevent material damage to the worlds economy. This is at a time when global emissions are growing at their fastest rate ever. Figure 1 illustrates the massive gap between the business as usual global emissions growth path and the stabilisation trajectory (dotted line). Of course, the global economy is the sum of its economic parts and at an enterprise level each business faces a similar challenge how to grow profitably while decreasing emissions (see figure 2 on next page). The question, however, is why should or would companies act ahead of, or beyond, regulatory requirements and mimic a stabilisation trajectory for their enterprise

The effects of climate on companies operations are now so tangible and certain that the issues are best addressed with the tools of the strategist, not the philanthropist. The UKs Department for Environment, Food and Rural Affairs published guidance (December 2007) on the use of a shadow price of carbon in policy development. Its guidelines define a shadow price of carbon rising from 25 per tonne of CO2 (equivalent) in 2007 to 60 in 2050. Interestingly, the World Resources Institute reports (February 2008) that Wall Street financiers are effectively

Figure 1 Forecast global carbon emissions 2000-2050 in giga-tonnes

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sations respond to this pressure is becoming a source of competitive advantage. Early adopters across all industries have been quick to recognise the business value of taking credible action, and many have adopted offset based carbon management strategies as a way of demonstrating this to the market within the constraints imposed by their current infrastructure (eg. offices, manufacturing facilities) and business models (eg. a dependence on international travel to visit clients) see figure 3 below.
Figure 2 Decoupling business growth from carbon emissions

the cost burden for doing so. Recent economic analyses (January 2008) prepared by the US Environmental Protection Agency (EPA) point to the effectiveness of offsets in containing costs. An analysis of the Low Carbon Economy Act of 2007 (S. 1766, aka the Bingaman-Specter cap-and-trade bill) concludes that allowing the use of unlimited international credits and offset projects lowers the cost of achieving emissions goals by 65% and that the effect of climate change reductions on GDP improves by 60%. It is important not to forget that investments in quality offsets are funding real and permanent reductions within the global economy. As far as the climate is concerned,

where reductions take place is of no consequence. Yvo de Boer, Executive Secretary of the United Nations Framework Convention on Climate Change estimated (December 2007) that if developed economies commit to reduce emissions by 60% by 2050 compared to 1990 levels, and bought half of the required reductions in developing countries that could generate $100billion in financial flows for low carbon development options. THE BUSINESS VALUE OF CARBON
OFFSETS

Businesses are experiencing pressure from all angles to demonstrate how they are accounting for their impact on the climate. How organi-

As organisations look to the future the drivers demanding action on climate change are only going to strengthen. Those organisations not able to respond quickly or credibly enough will find themselves increasingly disadvantaged relative to their peers who successfully execute credible carbon management strategies. The credible strategies are those that seek to drive revenue growth, minimise costs, and enhance reputation, through robust and defendable action that respects the climate change science. Michael Porter, writing in the Harvard Business Review (October 2007) captured the magnitude of the issue well when he wrote: Periodically, major new forces dramatically reshape the business world as globalisation and the information technology revolution have been doing for the past several decades. Climate change, in its complexity and potential impact, may rival them both. While many companies may still think of global warming as a corporate social responsibility issue, business leaders need to approach it in the same hard headed manner as any other strategic threat or opportunity. Bill Sneyd is director of advisory services at The CarbonNeutral Company, responsible for, among other things, advising clients on the development of their carbon management programmes. www.carbonneutral.com

Figure 3 The business drivers for action on climate change

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Carbon Accountable
So, you know your carbon footprint. . . What do you do now?

Expert Advice on Carbon Management

Knowing what your carbon emissions are is only half the battle. Reducing those emissions is the goal. Carbon Accountable offers a complete consultancy and software package to allow your business to report, manage, monitor and reduce all aspects of your carbon footprint. Whatever your needs, from social obligation through to compliance, Carbon Accountable can help.

For further details contact Gordon Archer Managing Director gordon.archer@carbonaccontable.com

LETS SHAPE YOUR SUSTAINABILITY STRATEGY

WHAT DOES SUSTAINABILITY MEAN TO YOUR BUSINESS?

At WSP, we help our clients to deliver strategies with clear actions to optimise the future sustainability of their business. We help clients make proactive and strategic changes that are right for their business and the environment and which always increase partner value. Working collaboratively with you we will look at sustainability issues across your whole business. For your offices, for your supply chain, and in the advice or products you provide to your clients. We will benchmark your performance. We will devise pragmatic commercially focused solutions. And of course we will work with you to ensure the successful implementation of change in your organisation.

We have 1,110 people across 65 global offices. And we're working with for some of the world's largest professional firms to create their sustainability strategies. Don't expect a standard approach. We'll listen to you, we'll challenge you and we'll be creative in our approach.

LETS TALK Wed be delighted to have an initial, informal chat about your business. Hopefully youll like our approach and we can work together to shape your sustainability strategy. Feel free to contact either David Symons (david.symons@wspgroup.com) or Emma Bollan (emma.bollan@wspgroup.com) on 020 7314 5936

www.wspenvironmental.com