What are serviced emissions and how can corporates act on them?

29 Oct 2024, Matt Mace, edie

EXCLUSIVE: The UN’s Race to Zero initiative held a launch event to showcase how organisations working in PR, law, advertising and other service-based sectors can identify actions to reduce emissions and mitigate climate risks.

Race to Zero, in partnership with Oxford Net Zero and the non-profit Purpose Disruptors, hosted a launch event for the Serviced Emissions: Catalysing Climate Action – The Role of Professional Service Providers in Realising a Net-Zero Future report.

Attended by a host of businesses across the professional services sector, the event acted as a launchpad to enshrine roadmaps for “serviced emissions” to be identified and embedded into corporate climate plans.

Serviced emissions are influence by the roles taken on by Professional Service Providers (PSPs) such as law, advisory, architecture, PR, and advertising. Emissions could be associated with the increased sales driven by marketing efforts, for example, or in the legal sector, it covers the advisory aspects of an organisation.

The report notes that service sectors tend to report on operational footprints, but the real impact is embedded in the advice and services they provide. These direct emissions tend to be far lower compared to other industries but Race to Zero and its partners want to highlight the “enormous influence” the services have on the economy, and the hidden climate impacts as well.

Race to Zero Professional Services Working Group’s co-chair Ranjita Rajan says: “PSPs have the power to supercharge the global net zero transition by aligning their strategy, governance, due diligence, project scoping, and ultimately client advice with 1.5°C goals. This framework addresses a vital gap in current net-zero guidance, providing a foundation for PSPs ready to lead on climate.”

The research notes that existing GHG accounting principles do not adequately capture serviced emissions, but that reporting frameworks developed by the Greenhouse Gas Protocol, CDP and SBTi acknowledge the role of service providers.

Steps to Success

As such, the new report has created a framework that outlines a roadmap and action areas for organisations to follow. It aims to showcase climate opportunities and mitigate risks, provided serviced emissions are included in corporate action plans.

The report details that organisations should map clients, services, and projects to create an inventory of clients against proxy indicators that enables the creation of targets to reduce emissions from client and service practices. This should form part of a wider net-zero target that also accounts for operational emissions.

Governance systems, including new leadership groups and linking serviced emissions to bonuses and other KPIs, can also be utilised to ensure ownership of these targets. This should be supported by high quality training and awareness support.

From here, organisations should embed climate considerations into due diligence and risk assessment processes for new clients and projects to identify any opportunities to decarbonise.

For clients that aren’t as easy to engage with, organisations should establish escalation procedures and protocols for scenarios in which service engagements do not contribute to the broader goals aligned with the 1.5C- transition.

Regarding client relations, organisations should look to support businesses and engage them on ways to decarbonise. One such example is engage on lifecycle impacts of products and services.

While reporting for serviced emissions may seem tricky, the report states that by developing objectives and key performance indicators, organisations will have the means to report progress and share results as part of the net-zero transition.

Finally, organisations should look at the wider changes required across entire sectors and systems and advocate for regulatory changes that support an accelerated transition to net zero. This aligns with the current work Race to Zero is doing on advocacy and policy engagement as part of “The 5th P Handbook”.

The guidance comes as more and more service-based roles look to hire and attract sustainability talent. Earlier this month, a survey of more than 1,100 sustainability professionals found that an ever-growing proportion of businesses are asking them to work within finance and legal departments.

That’s according to the 2024 edition of the biannual ‘State of the Sustainability Profession’ report from Trellis (formerly GreenBiz).

Trellis’s poll of 1,185 people across 17 sectors also found that 14% of CSOs say they report to the legal function, up significantly from 5% ten years ago. Trellis has also recorded an increase in reporting to the finance, supply chain and corporate affairs functions. In tandem, reporting to the health and safety function has decreased significantly and is now only one-third as common as it was in 2014.

New research has found that two-thirds of businesses have only introduced sustainability initiatives in order to comply with regulations and reporting frameworks. With sustainability acting as a differentiator for many organisations, edie recently explored the practical steps to going beyond compliance when it comes to climate action. Click here to read the full piece.