The 2024 Review of Greenly's Scientific Council

The Greenly Scientific Council's Annual Review is a gathering of experts, offering insights and discussions in the fields of carbon accounting, sustainability, and ESG strategies. In this article, we delve into the key topics raised: from carbon accounting methodology to the evolving role of corporate social responsibility, the learnings shared by the Council's professionals offer a clear view of the current and future state of sustainable practices in business.

Greenly's Scientific Council: A blend of experience and expertise 

Greenly has assembled a diverse team of professionals comprising experts, economists, and influential figures from civil society. Their expertise ranges across a variety of areas such as carbon accounting, environmental policy, and the advancement of new technologies. 

Greenly’s Scientific Council will progressively perform  a number of crucial functions: 

Sharing of research topics to inspire Greenly’s product developments

The Scientific Council plays a supportive role in Greenly’s product development by providing insights from recent academic research. This collaboration helps inform Greenly's approach, contributing to the ongoing evolution and refinement of its products. 

Enhancement of Greenly’s methods and results

Greenly's Scientific Council brings together a diverse range of expertise to offer valuable advice and insights. We plan to make sure this contributes to the enhancement of Greenly’s methods and results, ensuring the company stays informed and aligned with relevant scientific perspectives.

Discussion of possible research opportunities using Greenly’s operational insights

The Scientific Council engages in discussions about potential research opportunities using Greenly’s operational data. This initiative aims to identify areas where Greenly's extensive data might contribute to advancements in environmental science. While still in the early stages, these efforts have the potential to provide valuable, data-driven insights to both Greenly and its clients.

Scientific Council members

This year, the Greenly Scientific Council had the pleasure of welcoming speakers and annual review participants, each a leader in their respective domains. Attendees were as follows:

• Alexis Normand - CEO of Greenly
• Arnaud Delubac - CMO of Greenly
• François Cluzel - Professor at Centrale Supelec, design engineering and sustainable systems expert
• Loic Umbricht - Head of Research and Methodology at Greenly
• Marine Kohler - Carbon Accounting Engineer at Greenly
• Matthieu Vegreville - CTO of Greenly
• Michel Bauer - Author, sociologist and economist
• Natalia Costa i Coromina - Associate at Energy Impact Partners
• Paul De Kerret - Engineering Manager and Technical Lead at Greenly
• Peter Foxpenner - Partner and Chief Impact Officer at Energy Impact Partners
• Philippe Ciblat - Professor at Telecom Paris
• Rodolphe Durand - Strategy and Business Policy Professor at HEC
• Yann Leroy - Professor at Centrale Supelec, sustainable industrial systems and innovation engineering expert

These experts offer a wide variety of insights and advice, addressing pressing ESG issues and emerging developments. Their varied backgrounds enable the council to provide well-rounded, forward-thinking guidance, crucial for navigating the complex landscape of carbon accounting and environmental, social, and governance challenges.

Every year, Greenly's Scientific Council holds an annual review to evaluate Greenly's progress and present the latest research in carbon accounting and ESG. 

💡 Complementing this key annual event, Greenly is also planning to conduct monthly events on specific topics, bringing in diverse presenters to explore various facets of environmental sustainability. This approach not only highlights Greenly's ongoing commitment to progress but also fosters continual learning and discussion throughout the year.

As we explore the key findings of this year's Annual Review, we uncover what industry experts identify as the most critical issues. These observations not only illuminate the main challenges currently facing the sector but also offer perspectives on potential future developments within the industry. Let’s delve deeper into the primary topics discussed.

Accurate carbon assessments hinge on the granularity of emissions factors, with the most detailed being those directly linked to specific companies and their products, calculated through comprehensive life cycle analysis. This level of detail is crucial for clients making environmentally responsible decisions, such as choosing sustainable suppliers or products. Relying solely on average emissions factors means that clients risk selecting suboptimal or even harmful options.

💡 For clients intent on implementing impactful environmental action plans, the use of average emissions factors can impede the realization of meaningful change in total emissions. In contrast, highly granular emissions factors offer a more precise approach.

The complexity of supplier-level emissions factors

Acquiring granular emissions data at the supplier level can be challenging. Few suppliers disclose their greenhouse gas emissions, and even fewer provide comprehensive life cycle assessments. Moreover, data quality varies significantly due to the use of different software and data formats, posing a challenge for comparison.

One potential solution to this issue lies in the adoption of a common framework, such as the Partnership for Carbon Transparency, applicable to life cycle assessments (LCAs). Such standardized frameworks provide data-sharing guidelines, directing companies on the type of data that they should be collecting and helping to ensure that data is published in a certain format. This facilitates the sharing of emissions factors in a consistent and comparable manner. 

👉 Although the Partnership for Carbon Transparency establishes foundational guidelines for collecting comparable data, Greenly recognizes that this framework alone may not be sufficient. To address this gap, Greenly takes additional measures, going beyond the standards to enhance data comparability and accuracy, ensuring a more robust and reliable approach to environmental reporting.

Greenly's supplier-specific emissions factors collection methods

Data collection and emissions factor accuracy are always hot topics in the world of carbon accounting, and at Greenly, it’s not something we take lightly. We strive to achieve the most accurate carbon footprint calculations through rigorous and scientifically informed methodology. 

When it comes to supplier emissions factors, at Greenly we collect data in two ways: 

• Monetary emission factors (spend-based method) - Calculating emissions based on a supplier's greenhouse gas (GHG) inventory divided by their revenue. Greenly adheres to strict criteria to ensure the reliability of monetary emissions factors by employing minimum criteria. This includes assessing whether the supplier's GHG assessment is complete, assessing the revenue disclosures, and also conducting a benchmark check to ensure that the data provided meets certain minimum standards. 
• Activity-based emission factors - The second method used by Greenly is the activity method, which involves detailed product life cycle assessments. This method is more complex, as comprehensive LCAs are not always available. As is the case with monetary emission factors, Greenly validates such data against benchmark values to ensure accuracy.

Although spend-based emissions factors are not as precise as activity-based emissions factors, they do have their advantages. They are more scalable, making them a more accessible option for companies calculating their Scope 3 emissions. Encouraging businesses to engage in this calculation is beneficial. However, it’s important to note that activity-based data is superior in accuracy and should be preferred whenever feasible. Greenly not only recognizes the importance of monetary emissions factors but also strongly advocates for and assists clients in conducting activity-based studies, aiming to make their use as accurate as possible through rigorous methodology.

Greenly’s comprehensive approach

Emissions factors are integral to Greenly and its clients. Our goal is to ensure these factors are of the highest quality for the most accurate carbon footprint calculations. We strive for our computations to be auditable, regulation-compliant, and of verified quality while being easily shareable with clients and suppliers.

Greenly delves deep into data collection, starting with spend-based factors and progressing to activity-based and individual supplier data analysis. We’re committed to attaining the most precise and reliable data possible, reflecting our dedication to environmental accuracy and accountability.

Rodolphe Durand, a distinguished Professor at HEC, delved into the evolving role of Corporate Social Responsibility (CSR) in modern businesses. His highly informative presentation highlighted a shift within the business sector from a sole focus on shareholder value maximization to a broader consideration of all stakeholders, including communities and the environment. This approach is not just ethically sound, but is also a catalyst for long-term value creation.

Shareholder perception and the value of CSR  

Durand's research revealed a growing recognition among shareholders of the intrinsic value of CSR, albeit with certain caveats. Long-term investors, in particular, are increasingly conscious of climate risks and seek to safeguard their investments accordingly. Asset managers are also responding by developing new categories, such as funds focused on ESG investments.

Stock performance and CSR communication

An analysis of companies listed on the Dow Jones Sustainability Index (DJSI) indicated that announcements of CSR initiatives don't necessarily lead to immediate stock value changes, suggesting that the market often preemptively prices in these factors. However, the study also found that long-term investors are more likely to invest in these companies upon the release of such indices. This behavior indicates growing investor interest in companies that actively engage in CSR, recognizing their potential for long-term value.

Shareholder activism and CSR transparency

Another interesting learning focused on shareholder activism, which intensifies with an increase in a company's CSR initiatives. Activists often target vague or superficial CSR efforts, highlighting the importance of transparency and authentic commitment. Companies that clearly communicate and sincerely implement their CSR strategies are more resilient to such activism, emphasizing the need for genuine and impactful communication strategies to effectively dispel any perceptions of 'greenwashing'. 

Broader benefits of CSR

Further studies underscore the multitude of benefits associated with robust CSR practices. These include enhancing operational efficiency, spurring innovation, maintaining competitiveness during crises, and unlocking financing opportunities like green bonds and loans which are often contingent on achieving specific CSR objectives.

CSR and employee satisfaction

CSR is also hugely beneficial for companies when it comes to employee satisfaction. Studies show that a vast majority of employees value a purpose-driven workplace (82%), with many placing this above profit (72%). This sentiment translates into enhanced job performance, as employees feel more motivated and aligned with their company's values and CSR commitments.

François Cluzel, a renowned Mechanical Engineer and leader of the Design Engineering Research Group at Laboratoire de Génie Industriel (LGI) from the French engineering school CentraleSupélec, shared insights into the circular economy and eco-design. His research offers valuable strategies for integrating eco-design into the early stages of a product's lifecycle.

Integrating eco-design in the product lifecycle

Cluzel's discussion emphasized the complexities of incorporating eco-design in production processes. Achieving sustainability in both materials and manufacturing methods is challenging, requiring the integration of eco-design at the beginning, or upstream phase, of a product's lifecycle. This stage, often intricate and lengthy, plays a crucial role in shaping the product's overall environmental impact. It's not just about selecting sustainable materials; it involves embedding eco-conscious practices into every step of the production process.

This is why developing an eco-friendly design for the entire system presents significant challenges. Often, the complexity and scope of these processes make conducting a full life cycle assessment impractical. However, the emphasis remains on the importance of incorporating these sustainable practices as early as possible in the product's development to ensure a more environmentally responsible end product.

Environmental risk as an alternative to life cycle assessment

When full life cycle assessments are impractical, Cluzel suggests environmental risk assessment as an effective alternative. This approach is considered to be more accessible and understandable, focusing on assessing potential environmental risks rather than the environmental impacts. These assessments typically draw from high-level analyses of previous life cycle assessments, offering a pragmatic way to gauge environmental footprints.

Circular economy in SMEs

Another area of discussion was on how small and medium-sized enterprises (SMEs) can adopt and maintain a circular economy model. The proposed methodology involves identifying key areas of impact (such as activities, materials, and processes), and formulating short, medium, and long-term strategies, accompanied by continuous monitoring to assess effectiveness. This approach provides SMEs with a practical roadmap to embrace circular economy principles.

Eco-design in electronics and space systems

The discussion also touched upon two additional areas of interest:

• Electronics repair and usage - The challenges in this sector include dismantling processes, the compatibility of reused components, and the availability of spare parts, all crucial for the effective recycling and reuse of electronic devices.
  
• Circular space and terrestrial systems - François Cluzel highlighted the intriguing aspect of life support systems used in space missions. These systems, which recycle essentials like waste water and air for space crews, offer innovative solutions that can be applied here on Earth - for example, advanced wastewater recycling systems are highly relevant to our Earth-bound society. Moreover, the models developed for these systems can be adapted to monitor Earth's life systems, showcasing the potential of space technology in enhancing terrestrial sustainability.

Peter Foxpenner, Partner and Chief Impact Officer at Energy Impact Partners, led a discussion on aligning investment strategies with net zero initiatives. His insights shed light on the critical role of investments in driving the clean energy transition.

Broad spectrum investment in clean energy

Energy Impact Partners stands out for its extensive investment across the entire clean energy spectrum, including support for several pre-revenue companies - ie. those yet to commence product sales. Their latest ESG report, the "Impact & ESG Performance Report" of 2023, is a testament to their commitment to transparency, offering a detailed analysis of emerging ESG trends and key observations.

Measuring ESG benefits through carbon savings

One of the key metrics used by the firm to assess the ESG impact of companies in their decarbonization portfolio is carbon savings. This measure reflects the extent to which investments contribute to emission reductions. Notably, these savings have shown significant yearly increases, underscoring the effectiveness of ESG investments in promoting environmental sustainability.

Assessing pre-commercial companies

For companies in the pre-commercial phase, ie. those not yet generating revenue, a key metric is the projection of carbon savings. This involves estimating potential sales over a set period - Energy Impact Partners Use a five-year projection period for example - and consequently calculating the projected carbon savings during this time. It's important to recognize that while these figures are based on detailed and complex calculations for the initial five years of commercial operation, they are projections and not absolute certainties.

❗️When relying on such a metric, attention must be paid to the timeframe of the projection. A shorter span, like a five-year period, typically offers more accuracy compared to longer projections, such as those spanning thirty years. Careful consideration of the projection period is crucial to ensure the reliability and relevance of the estimated carbon savings.

The challenge of methodological consistency

A significant challenge in the ESG investment sector is the lack of a standardized methodology for impact calculations. Various firms employ different emissions factors and methodologies, leading to inconsistencies in assessments. Adopting uniform emissions factors and data sources could enhance comparability across the sector, but achieving full standardization remains a challenge. 

The Greenly Scientific Council Annual Review provides a unique opportunity to gain wisdom from leading experts in the fields of carbon accounting, sustainability, and Environmental, Social, and Governance (ESG) issues. This event not only showcases the depth of knowledge and experience possessed by these esteemed professionals but also serves as a testament to Greenly's commitment to staying at the forefront of the rapidly evolving ESG landscape.

Through the gatherings of the Scientific Council, Greenly facilitates the sharing of cutting-edge research, innovative strategies, and critical insights, all of which are essential for navigating the complexities of today's environmental challenges.

In this year's Annual Review, we had the privilege of gaining insights from leading experts in various domains. Rodolphe Durand, a distinguished Professor at HEC, enlightened us on the evolving role of Corporate Social Responsibility (CSR) in modern businesses, emphasizing the shift towards considering all stakeholders. His presentation highlighted the ethical and long-term value aspects of this shift. 

François Cluzel, a renowned Mechanical Engineer and leader of the Design Engineering Research Group at Laboratoire de Génie Industriel (LGI) shared valuable strategies for integrating eco-design into product life cycles. His insights underscored the challenges and importance of early-stage sustainability. 

Peter Foxpenner, Partner and Chief Impact Officer at Energy Impact Partners, discussed aligning investments with net zero initiatives, emphasizing the role of investments in promoting environmental sustainability. Together, these diverse perspectives provide a comprehensive understanding of the current landscape and future directions in ESG practices, reflecting the dynamic and forward-thinking discussions at the Greenly Scientific Council Annual Review.

💡 As Greenly continues to harness the collective intelligence of its Scientific Council, it reinforces its position as an authority in the ESG domain. By bringing together the brightest minds in the field, Greenly is not only contributing to the ongoing discourse on sustainability but is also shaping the future of environmental stewardship.

At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. Why not request a free demo with one of our experts - no obligation or commitment required. 

If reading this article has inspired you to consider your company’s own carbon footprint, Greenly can help. Learn more about Greenly’s carbon management platform here.