A review of CDP's Climate Disclosure Framework and why SMEs are so crucial
We’re in a climate emergency and engaging SMEs is vital
Global greenhouse gas emissions need to halve by 2030 and reach net-zero by 2050, to decrease the risk of irreversible climate tipping points. That’s why in 2019, the UK Government amended the Climate Change Act to commit the UK to achieving net zero by 2050. Hoorah! Brilliant news right? Not quite.
The majority of businesses in the UK (99%) are SMEs, of which there were 6 million in 2020. Yet, just 11% of SMEs are measuring their GHG emissions annually or more regularly(1); despite 99% of small firms recognising the importance of sustainability(2).
Barriers to SMEs taking action on the climate emergency
Cost is often most commonly cited as the primary barrier, with lack of in-house understanding or expertise coming second. Fuelling the fire is very little legislation for SMEs, meaning all action is voluntary or enforced through procurement policies.
- Four in 10 are unsure of how the Government's commitment to net-zero by 2050 will affect them(3).
- Over three-quarters (77%) of small businesses are not clear how to measure carbon emissions(4).
- 8 in 10 (82%) of respondents feel they need more guidance to deliver net-zero(5).
- Of the SMEs which have previously set emissions targets, only one-third have met them(6).
Some SMEs are taking action on the climate emergency, but sadly not enough
Whilst progress is happening - over 3,000 companies have joined the SME Climate Hub, committing to cut carbon emissions in half by 2030 and reach net zero emissions by 2050 or sooner - scale and urgency is still too slow to meet the 2050 deadline. To put this level of engagement into context, only 0.05% of UK-based SMEs are currently engaged with the SME Climate Hub.
Help is on hand for SMEs to tackle climate emergency
CDP in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative have recently released the SME Climate Disclosure Framework.
Below is my review of the framework - the good, the bad and the ugly!
A summary of CDP’s Climate Disclosure Framework
Who’s it for?
Small and medium sized enterprises (SMEs)
Who’s involved?
CDP, launched in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative.
What does it aim to achieve?
It aims to empower SMEs to;
- make strategic and impactful climate commitments;
- track and report progress against those commitments; and
- demonstrate climate leadership.
What does it do?
The framework provides key climate-related reporting indicators and metrics that SMEs should be reporting on and encourages setting targets grounded in science.
The framework is built up of a core section (consisting of three “core modules” - measure, commit and action & impact) and four additional modules.
Each module provides indicators that are considered important for SMEs to report on in their climate disclosures. The Framework recommends that SMEs adopt the core modules immediately and suggests that they report on the additional modules within three years.
Pro’s
✔ The framework is free to use, ensuring there is no immediate cost barrier for SMEs.
✔ It provides a common foundation for SMEs to use as a guide.
✔ It’s been created by experts and leaders within their fields.
✔ It’s aligned, where possible, to other frameworks and standards such as the GHG Protocol, TCFD, CDSB, SBTi, SDGs and the 1.5 Business Playbook. This is massively helpful as it allows companies to see the full picture.
Con's
❌ It’s voluntary, so uptake will always be limited.
❌ It can be manipulated. SME’s can tailor the use of the framework to their own disclosure needs. This means they can calculate their footprint in lots of different ways, providing no consistency or standardisation.
❌ SMEs have three years to report on the full framework, meaning they could delay reporting on value chain (Scope 3) emissions, despite these making up the vast majority of a typical company’s carbon footprint.
❌ SMEs still need to do the leg work. With limited time, budget and expertise the common barriers for engagement still exist.
How does Spherics plan to integrate with it?
At Spherics, we agree with CDP that measuring emissions is a crucial first step that every company must take to understand its negative impact on the climate and take the right steps to reduce it. However, we disagree with their suggestion that it takes three years to build the capacity to provide high-quality data, to include value chain emissions. This may have been the case historically, but the development of automated solutions like Spherics’ platform means that it can now literally be done in an instant.
Not only does our platform accurately measure a company’s full carbon footprint at a click of a button (including Scope 3), but we actively encourage users to commit to net zero through our targeting module, and support them with recommendations based on experience from sectoral peers. We are also aligned with and champion a number of external commitments and pledges (see my blog here).
We also help companies report on key actions via their bespoke dashboard. With near real-time data, a company no longer needs to rely on annual reporting. With Spherics, a company is able to spot immediate trends and take action fast. And all this is delivered for less than 10% of the cost of the conventional consultancy approach.
We welcome CDP’s new framework, but regret that its ambition is diluted by an outdated presumption of manual carbon footprint development. Cutting edge automation means that any SME can embark on their net zero journey with a complete road map, right now.
Final thoughts
First and foremost, I think this is a brilliant framework for SMEs to use and huge credit to CDP, SME Climate Hub and others for pulling this together. There are however a few areas that I think could be improved, to turn this document into action, including;
- Providing a downloadable template document with all the reporting headers filled in, that can be used by SMEs immediately.
- Compiling a list of external organisations that can help SMEs per core module.
- Providing an example of a completed assessment via a SME case study, showcasing step by step how they went about it.
Above all else however, to achieve the systemic change we need to achieve net zero by 2050, we need frameworks like this one to become mandatory and part of UK Government legislation. All parties should come together to put urgent pressure on our Government to do this, as until then, frameworks and standards will always struggle with uptake, consistency and rigour.
We’d love to know your thoughts? Please comment and share on LinkedIn.
More information
Contact
Rebecca Burgess,Chief Engagement Officer
rebecca@spherics.io
References
(1) O2 and the British Chambers of Commerce, 2021.
(2) Small Business Britain and BT Survey, 2021.
(3) Lloyds Banking Group, 2021.
(4) Small Business Britain and BT Survey, 2021.
(5) British Standards Institution (BSI), Net-Zero Barometer, January 2021.
(6) World Kinect Energy Services’, Sustainability White Paper, 2021
You may also like
.png)
.png)
A review of CDP's Climate Disclosure Framework and why SMEs are so crucial
We’re in a climate emergency and engaging SMEs is vital
Global greenhouse gas emissions need to halve by 2030 and reach net-zero by 2050, to decrease the risk of irreversible climate tipping points. That’s why in 2019, the UK Government amended the Climate Change Act to commit the UK to achieving net zero by 2050. Hoorah! Brilliant news right? Not quite.
The majority of businesses in the UK (99%) are SMEs, of which there were 6 million in 2020. Yet, just 11% of SMEs are measuring their GHG emissions annually or more regularly(1); despite 99% of small firms recognising the importance of sustainability(2).
Barriers to SMEs taking action on the climate emergency
Cost is often most commonly cited as the primary barrier, with lack of in-house understanding or expertise coming second. Fuelling the fire is very little legislation for SMEs, meaning all action is voluntary or enforced through procurement policies.
- Four in 10 are unsure of how the Government's commitment to net-zero by 2050 will affect them(3).
- Over three-quarters (77%) of small businesses are not clear how to measure carbon emissions(4).
- 8 in 10 (82%) of respondents feel they need more guidance to deliver net-zero(5).
- Of the SMEs which have previously set emissions targets, only one-third have met them(6).
Some SMEs are taking action on the climate emergency, but sadly not enough
Whilst progress is happening - over 3,000 companies have joined the SME Climate Hub, committing to cut carbon emissions in half by 2030 and reach net zero emissions by 2050 or sooner - scale and urgency is still too slow to meet the 2050 deadline. To put this level of engagement into context, only 0.05% of UK-based SMEs are currently engaged with the SME Climate Hub.
Help is on hand for SMEs to tackle climate emergency
CDP in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative have recently released the SME Climate Disclosure Framework.
Below is my review of the framework - the good, the bad and the ugly!
A summary of CDP’s Climate Disclosure Framework
Who’s it for?
Small and medium sized enterprises (SMEs)
Who’s involved?
CDP, launched in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative.
What does it aim to achieve?
It aims to empower SMEs to;
- make strategic and impactful climate commitments;
- track and report progress against those commitments; and
- demonstrate climate leadership.
What does it do?
The framework provides key climate-related reporting indicators and metrics that SMEs should be reporting on and encourages setting targets grounded in science.
The framework is built up of a core section (consisting of three “core modules” - measure, commit and action & impact) and four additional modules.
Each module provides indicators that are considered important for SMEs to report on in their climate disclosures. The Framework recommends that SMEs adopt the core modules immediately and suggests that they report on the additional modules within three years.
Pro’s
✔ The framework is free to use, ensuring there is no immediate cost barrier for SMEs.
✔ It provides a common foundation for SMEs to use as a guide.
✔ It’s been created by experts and leaders within their fields.
✔ It’s aligned, where possible, to other frameworks and standards such as the GHG Protocol, TCFD, CDSB, SBTi, SDGs and the 1.5 Business Playbook. This is massively helpful as it allows companies to see the full picture.
Con's
❌ It’s voluntary, so uptake will always be limited.
❌ It can be manipulated. SME’s can tailor the use of the framework to their own disclosure needs. This means they can calculate their footprint in lots of different ways, providing no consistency or standardisation.
❌ SMEs have three years to report on the full framework, meaning they could delay reporting on value chain (Scope 3) emissions, despite these making up the vast majority of a typical company’s carbon footprint.
❌ SMEs still need to do the leg work. With limited time, budget and expertise the common barriers for engagement still exist.
How does Spherics plan to integrate with it?
At Spherics, we agree with CDP that measuring emissions is a crucial first step that every company must take to understand its negative impact on the climate and take the right steps to reduce it. However, we disagree with their suggestion that it takes three years to build the capacity to provide high-quality data, to include value chain emissions. This may have been the case historically, but the development of automated solutions like Spherics’ platform means that it can now literally be done in an instant.
Not only does our platform accurately measure a company’s full carbon footprint at a click of a button (including Scope 3), but we actively encourage users to commit to net zero through our targeting module, and support them with recommendations based on experience from sectoral peers. We are also aligned with and champion a number of external commitments and pledges (see my blog here).
We also help companies report on key actions via their bespoke dashboard. With near real-time data, a company no longer needs to rely on annual reporting. With Spherics, a company is able to spot immediate trends and take action fast. And all this is delivered for less than 10% of the cost of the conventional consultancy approach.
We welcome CDP’s new framework, but regret that its ambition is diluted by an outdated presumption of manual carbon footprint development. Cutting edge automation means that any SME can embark on their net zero journey with a complete road map, right now.
Final thoughts
First and foremost, I think this is a brilliant framework for SMEs to use and huge credit to CDP, SME Climate Hub and others for pulling this together. There are however a few areas that I think could be improved, to turn this document into action, including;
- Providing a downloadable template document with all the reporting headers filled in, that can be used by SMEs immediately.
- Compiling a list of external organisations that can help SMEs per core module.
- Providing an example of a completed assessment via a SME case study, showcasing step by step how they went about it.
Above all else however, to achieve the systemic change we need to achieve net zero by 2050, we need frameworks like this one to become mandatory and part of UK Government legislation. All parties should come together to put urgent pressure on our Government to do this, as until then, frameworks and standards will always struggle with uptake, consistency and rigour.
We’d love to know your thoughts? Please comment and share on LinkedIn.
More information
Contact
Rebecca Burgess,Chief Engagement Officer
rebecca@spherics.io
References
(1) O2 and the British Chambers of Commerce, 2021.
(2) Small Business Britain and BT Survey, 2021.
(3) Lloyds Banking Group, 2021.
(4) Small Business Britain and BT Survey, 2021.
(5) British Standards Institution (BSI), Net-Zero Barometer, January 2021.
(6) World Kinect Energy Services’, Sustainability White Paper, 2021
You may also like
IWD - Meet Caroline, one of the developers behind the Spherics carbon accounting code
A review of CDP's Climate Disclosure Framework and why SMEs are so crucial
We’re in a climate emergency and engaging SMEs is vital
Global greenhouse gas emissions need to halve by 2030 and reach net-zero by 2050, to decrease the risk of irreversible climate tipping points. That’s why in 2019, the UK Government amended the Climate Change Act to commit the UK to achieving net zero by 2050. Hoorah! Brilliant news right? Not quite.
The majority of businesses in the UK (99%) are SMEs, of which there were 6 million in 2020. Yet, just 11% of SMEs are measuring their GHG emissions annually or more regularly(1); despite 99% of small firms recognising the importance of sustainability(2).
Barriers to SMEs taking action on the climate emergency
Cost is often most commonly cited as the primary barrier, with lack of in-house understanding or expertise coming second. Fuelling the fire is very little legislation for SMEs, meaning all action is voluntary or enforced through procurement policies.
- Four in 10 are unsure of how the Government's commitment to net-zero by 2050 will affect them(3).
- Over three-quarters (77%) of small businesses are not clear how to measure carbon emissions(4).
- 8 in 10 (82%) of respondents feel they need more guidance to deliver net-zero(5).
- Of the SMEs which have previously set emissions targets, only one-third have met them(6).
Some SMEs are taking action on the climate emergency, but sadly not enough
Whilst progress is happening - over 3,000 companies have joined the SME Climate Hub, committing to cut carbon emissions in half by 2030 and reach net zero emissions by 2050 or sooner - scale and urgency is still too slow to meet the 2050 deadline. To put this level of engagement into context, only 0.05% of UK-based SMEs are currently engaged with the SME Climate Hub.
Help is on hand for SMEs to tackle climate emergency
CDP in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative have recently released the SME Climate Disclosure Framework.
Below is my review of the framework - the good, the bad and the ugly!
A summary of CDP’s Climate Disclosure Framework
Who’s it for?
Small and medium sized enterprises (SMEs)
Who’s involved?
CDP, launched in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative.
What does it aim to achieve?
It aims to empower SMEs to;
- make strategic and impactful climate commitments;
- track and report progress against those commitments; and
- demonstrate climate leadership.
What does it do?
The framework provides key climate-related reporting indicators and metrics that SMEs should be reporting on and encourages setting targets grounded in science.
The framework is built up of a core section (consisting of three “core modules” - measure, commit and action & impact) and four additional modules.
Each module provides indicators that are considered important for SMEs to report on in their climate disclosures. The Framework recommends that SMEs adopt the core modules immediately and suggests that they report on the additional modules within three years.
Pro’s
✔ The framework is free to use, ensuring there is no immediate cost barrier for SMEs.
✔ It provides a common foundation for SMEs to use as a guide.
✔ It’s been created by experts and leaders within their fields.
✔ It’s aligned, where possible, to other frameworks and standards such as the GHG Protocol, TCFD, CDSB, SBTi, SDGs and the 1.5 Business Playbook. This is massively helpful as it allows companies to see the full picture.
Con's
❌ It’s voluntary, so uptake will always be limited.
❌ It can be manipulated. SME’s can tailor the use of the framework to their own disclosure needs. This means they can calculate their footprint in lots of different ways, providing no consistency or standardisation.
❌ SMEs have three years to report on the full framework, meaning they could delay reporting on value chain (Scope 3) emissions, despite these making up the vast majority of a typical company’s carbon footprint.
❌ SMEs still need to do the leg work. With limited time, budget and expertise the common barriers for engagement still exist.
How does Spherics plan to integrate with it?
At Spherics, we agree with CDP that measuring emissions is a crucial first step that every company must take to understand its negative impact on the climate and take the right steps to reduce it. However, we disagree with their suggestion that it takes three years to build the capacity to provide high-quality data, to include value chain emissions. This may have been the case historically, but the development of automated solutions like Spherics’ platform means that it can now literally be done in an instant.
Not only does our platform accurately measure a company’s full carbon footprint at a click of a button (including Scope 3), but we actively encourage users to commit to net zero through our targeting module, and support them with recommendations based on experience from sectoral peers. We are also aligned with and champion a number of external commitments and pledges (see my blog here).
We also help companies report on key actions via their bespoke dashboard. With near real-time data, a company no longer needs to rely on annual reporting. With Spherics, a company is able to spot immediate trends and take action fast. And all this is delivered for less than 10% of the cost of the conventional consultancy approach.
We welcome CDP’s new framework, but regret that its ambition is diluted by an outdated presumption of manual carbon footprint development. Cutting edge automation means that any SME can embark on their net zero journey with a complete road map, right now.
Final thoughts
First and foremost, I think this is a brilliant framework for SMEs to use and huge credit to CDP, SME Climate Hub and others for pulling this together. There are however a few areas that I think could be improved, to turn this document into action, including;
- Providing a downloadable template document with all the reporting headers filled in, that can be used by SMEs immediately.
- Compiling a list of external organisations that can help SMEs per core module.
- Providing an example of a completed assessment via a SME case study, showcasing step by step how they went about it.
Above all else however, to achieve the systemic change we need to achieve net zero by 2050, we need frameworks like this one to become mandatory and part of UK Government legislation. All parties should come together to put urgent pressure on our Government to do this, as until then, frameworks and standards will always struggle with uptake, consistency and rigour.
We’d love to know your thoughts? Please comment and share on LinkedIn.
More information
A review of CDP's Climate Disclosure Framework and why SMEs are so crucial
We’re in a climate emergency and engaging SMEs is vital
Global greenhouse gas emissions need to halve by 2030 and reach net-zero by 2050, to decrease the risk of irreversible climate tipping points. That’s why in 2019, the UK Government amended the Climate Change Act to commit the UK to achieving net zero by 2050. Hoorah! Brilliant news right? Not quite.
The majority of businesses in the UK (99%) are SMEs, of which there were 6 million in 2020. Yet, just 11% of SMEs are measuring their GHG emissions annually or more regularly(1); despite 99% of small firms recognising the importance of sustainability(2).
Barriers to SMEs taking action on the climate emergency
Cost is often most commonly cited as the primary barrier, with lack of in-house understanding or expertise coming second. Fuelling the fire is very little legislation for SMEs, meaning all action is voluntary or enforced through procurement policies.
- Four in 10 are unsure of how the Government's commitment to net-zero by 2050 will affect them(3).
- Over three-quarters (77%) of small businesses are not clear how to measure carbon emissions(4).
- 8 in 10 (82%) of respondents feel they need more guidance to deliver net-zero(5).
- Of the SMEs which have previously set emissions targets, only one-third have met them(6).
Some SMEs are taking action on the climate emergency, but sadly not enough
Whilst progress is happening - over 3,000 companies have joined the SME Climate Hub, committing to cut carbon emissions in half by 2030 and reach net zero emissions by 2050 or sooner - scale and urgency is still too slow to meet the 2050 deadline. To put this level of engagement into context, only 0.05% of UK-based SMEs are currently engaged with the SME Climate Hub.
Help is on hand for SMEs to tackle climate emergency
CDP in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative have recently released the SME Climate Disclosure Framework.
Below is my review of the framework - the good, the bad and the ugly!
A summary of CDP’s Climate Disclosure Framework
Who’s it for?
Small and medium sized enterprises (SMEs)
Who’s involved?
CDP, launched in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative.
What does it aim to achieve?
It aims to empower SMEs to;
- make strategic and impactful climate commitments;
- track and report progress against those commitments; and
- demonstrate climate leadership.
What does it do?
The framework provides key climate-related reporting indicators and metrics that SMEs should be reporting on and encourages setting targets grounded in science.
The framework is built up of a core section (consisting of three “core modules” - measure, commit and action & impact) and four additional modules.
Each module provides indicators that are considered important for SMEs to report on in their climate disclosures. The Framework recommends that SMEs adopt the core modules immediately and suggests that they report on the additional modules within three years.
Pro’s
✔ The framework is free to use, ensuring there is no immediate cost barrier for SMEs.
✔ It provides a common foundation for SMEs to use as a guide.
✔ It’s been created by experts and leaders within their fields.
✔ It’s aligned, where possible, to other frameworks and standards such as the GHG Protocol, TCFD, CDSB, SBTi, SDGs and the 1.5 Business Playbook. This is massively helpful as it allows companies to see the full picture.
Con's
❌ It’s voluntary, so uptake will always be limited.
❌ It can be manipulated. SME’s can tailor the use of the framework to their own disclosure needs. This means they can calculate their footprint in lots of different ways, providing no consistency or standardisation.
❌ SMEs have three years to report on the full framework, meaning they could delay reporting on value chain (Scope 3) emissions, despite these making up the vast majority of a typical company’s carbon footprint.
❌ SMEs still need to do the leg work. With limited time, budget and expertise the common barriers for engagement still exist.
How does Spherics plan to integrate with it?
At Spherics, we agree with CDP that measuring emissions is a crucial first step that every company must take to understand its negative impact on the climate and take the right steps to reduce it. However, we disagree with their suggestion that it takes three years to build the capacity to provide high-quality data, to include value chain emissions. This may have been the case historically, but the development of automated solutions like Spherics’ platform means that it can now literally be done in an instant.
Not only does our platform accurately measure a company’s full carbon footprint at a click of a button (including Scope 3), but we actively encourage users to commit to net zero through our targeting module, and support them with recommendations based on experience from sectoral peers. We are also aligned with and champion a number of external commitments and pledges (see my blog here).
We also help companies report on key actions via their bespoke dashboard. With near real-time data, a company no longer needs to rely on annual reporting. With Spherics, a company is able to spot immediate trends and take action fast. And all this is delivered for less than 10% of the cost of the conventional consultancy approach.
We welcome CDP’s new framework, but regret that its ambition is diluted by an outdated presumption of manual carbon footprint development. Cutting edge automation means that any SME can embark on their net zero journey with a complete road map, right now.
Final thoughts
First and foremost, I think this is a brilliant framework for SMEs to use and huge credit to CDP, SME Climate Hub and others for pulling this together. There are however a few areas that I think could be improved, to turn this document into action, including;
- Providing a downloadable template document with all the reporting headers filled in, that can be used by SMEs immediately.
- Compiling a list of external organisations that can help SMEs per core module.
- Providing an example of a completed assessment via a SME case study, showcasing step by step how they went about it.
Above all else however, to achieve the systemic change we need to achieve net zero by 2050, we need frameworks like this one to become mandatory and part of UK Government legislation. All parties should come together to put urgent pressure on our Government to do this, as until then, frameworks and standards will always struggle with uptake, consistency and rigour.
We’d love to know your thoughts? Please comment and share on LinkedIn.
More information
Contact
Rebecca Burgess,Chief Engagement Officer
rebecca@spherics.io
References
(1) O2 and the British Chambers of Commerce, 2021.
(2) Small Business Britain and BT Survey, 2021.
(3) Lloyds Banking Group, 2021.
(4) Small Business Britain and BT Survey, 2021.
(5) British Standards Institution (BSI), Net-Zero Barometer, January 2021.
(6) World Kinect Energy Services’, Sustainability White Paper, 2021
You may also like
.png)
A review of CDP's Climate Disclosure Framework and why SMEs are so crucial
We’re in a climate emergency and engaging SMEs is vital
Global greenhouse gas emissions need to halve by 2030 and reach net-zero by 2050, to decrease the risk of irreversible climate tipping points. That’s why in 2019, the UK Government amended the Climate Change Act to commit the UK to achieving net zero by 2050. Hoorah! Brilliant news right? Not quite.
The majority of businesses in the UK (99%) are SMEs, of which there were 6 million in 2020. Yet, just 11% of SMEs are measuring their GHG emissions annually or more regularly(1); despite 99% of small firms recognising the importance of sustainability(2).
Barriers to SMEs taking action on the climate emergency
Cost is often most commonly cited as the primary barrier, with lack of in-house understanding or expertise coming second. Fuelling the fire is very little legislation for SMEs, meaning all action is voluntary or enforced through procurement policies.
- Four in 10 are unsure of how the Government's commitment to net-zero by 2050 will affect them(3).
- Over three-quarters (77%) of small businesses are not clear how to measure carbon emissions(4).
- 8 in 10 (82%) of respondents feel they need more guidance to deliver net-zero(5).
- Of the SMEs which have previously set emissions targets, only one-third have met them(6).
Some SMEs are taking action on the climate emergency, but sadly not enough
Whilst progress is happening - over 3,000 companies have joined the SME Climate Hub, committing to cut carbon emissions in half by 2030 and reach net zero emissions by 2050 or sooner - scale and urgency is still too slow to meet the 2050 deadline. To put this level of engagement into context, only 0.05% of UK-based SMEs are currently engaged with the SME Climate Hub.
Help is on hand for SMEs to tackle climate emergency
CDP in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative have recently released the SME Climate Disclosure Framework.
Below is my review of the framework - the good, the bad and the ugly!
A summary of CDP’s Climate Disclosure Framework
Who’s it for?
Small and medium sized enterprises (SMEs)
Who’s involved?
CDP, launched in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative.
What does it aim to achieve?
It aims to empower SMEs to;
- make strategic and impactful climate commitments;
- track and report progress against those commitments; and
- demonstrate climate leadership.
What does it do?
The framework provides key climate-related reporting indicators and metrics that SMEs should be reporting on and encourages setting targets grounded in science.
The framework is built up of a core section (consisting of three “core modules” - measure, commit and action & impact) and four additional modules.
Each module provides indicators that are considered important for SMEs to report on in their climate disclosures. The Framework recommends that SMEs adopt the core modules immediately and suggests that they report on the additional modules within three years.
Pro’s
✔ The framework is free to use, ensuring there is no immediate cost barrier for SMEs.
✔ It provides a common foundation for SMEs to use as a guide.
✔ It’s been created by experts and leaders within their fields.
✔ It’s aligned, where possible, to other frameworks and standards such as the GHG Protocol, TCFD, CDSB, SBTi, SDGs and the 1.5 Business Playbook. This is massively helpful as it allows companies to see the full picture.
Con's
❌ It’s voluntary, so uptake will always be limited.
❌ It can be manipulated. SME’s can tailor the use of the framework to their own disclosure needs. This means they can calculate their footprint in lots of different ways, providing no consistency or standardisation.
❌ SMEs have three years to report on the full framework, meaning they could delay reporting on value chain (Scope 3) emissions, despite these making up the vast majority of a typical company’s carbon footprint.
❌ SMEs still need to do the leg work. With limited time, budget and expertise the common barriers for engagement still exist.
How does Spherics plan to integrate with it?
At Spherics, we agree with CDP that measuring emissions is a crucial first step that every company must take to understand its negative impact on the climate and take the right steps to reduce it. However, we disagree with their suggestion that it takes three years to build the capacity to provide high-quality data, to include value chain emissions. This may have been the case historically, but the development of automated solutions like Spherics’ platform means that it can now literally be done in an instant.
Not only does our platform accurately measure a company’s full carbon footprint at a click of a button (including Scope 3), but we actively encourage users to commit to net zero through our targeting module, and support them with recommendations based on experience from sectoral peers. We are also aligned with and champion a number of external commitments and pledges (see my blog here).
We also help companies report on key actions via their bespoke dashboard. With near real-time data, a company no longer needs to rely on annual reporting. With Spherics, a company is able to spot immediate trends and take action fast. And all this is delivered for less than 10% of the cost of the conventional consultancy approach.
We welcome CDP’s new framework, but regret that its ambition is diluted by an outdated presumption of manual carbon footprint development. Cutting edge automation means that any SME can embark on their net zero journey with a complete road map, right now.
Final thoughts
First and foremost, I think this is a brilliant framework for SMEs to use and huge credit to CDP, SME Climate Hub and others for pulling this together. There are however a few areas that I think could be improved, to turn this document into action, including;
- Providing a downloadable template document with all the reporting headers filled in, that can be used by SMEs immediately.
- Compiling a list of external organisations that can help SMEs per core module.
- Providing an example of a completed assessment via a SME case study, showcasing step by step how they went about it.
Above all else however, to achieve the systemic change we need to achieve net zero by 2050, we need frameworks like this one to become mandatory and part of UK Government legislation. All parties should come together to put urgent pressure on our Government to do this, as until then, frameworks and standards will always struggle with uptake, consistency and rigour.
We’d love to know your thoughts? Please comment and share on LinkedIn.
More information
