How the counterproposal to the Swiss RBI is driving carbon accounting

From 2024, certain Swiss companies will be required to report on their CO2 reduction targets. Carbon accounting provides companies with a digital solution for a simple and automated process.

The indirect counterproposal to the Swiss Responsible Business Initiative (RBI) came into force in 2022. As a result, some Swiss companies will have to publish an annual report on non-financial matters from 2024. This mainly affects large, financially strong, public-interest companies with:

• more than 500 full-time employees in two consecutive financial years and
• a balance sheet total of more than CHF 20 million or
• a turnover of more than CHF 40 million

Under the Swiss Code of Obligations, these companies must now provide information on social, employee, human rights and anti-corruption matters. They are also required to be accountable for environmental issues, in particular CO2 reduction targets. This has prompted some companies to review their sustainability management. Data-driven carbon accounting provides the basis for efficient reporting on CO2 reduction targets.

Digital solution automates sustainability management

Carbon accounting identifies emission drivers in companies so that carbon footprints can be calculated. ‘It’s CO2 accounting, just like financial accounting,’ explains Othmar Hug, CEO of Swiss Climate. It considers the CO2 emissions generated by a company along the entire value chain, which experts refer to as ‘scopes’:

• Scope 1 is direct emissions (from own or controlled sources)
• Scope 2 is indirect emissions (from purchased electricity, steam, heating and cooling)
• Scope 3 covers all other emissions in the value chain (such as suppliers)

Scope 3 emissions in particular often pose a challenge, as the partners concerned have to be approached and play their part in their measurement. According to Hug, this can take the form of a digital survey, as is the case for Swisscom. ‘Net zero has a lot to do with data,’ explains Res Witschi, who is responsible for sustainable digitalisation at Swisscom. She has been working on sustainability since the 1990s and has a wealth of experience. Over time, Swisscom’s IT division has also evolved to support sustainability management. ‘While Excel is still often used for carbon footprints, there are now digital solutions that make sustainability management simpler and more automated,’ says Witschi.

EU increases pressure on companies

Carbon accounting is not only important for companies affected by the counterproposal to the Swiss Responsible Business Initiative. Happenings at EU level also point to a further expansion of the requirement to report carbon footprints. From 2024, the new Corporate Sustainability Reporting Directive (CSRD) will apply in the EU, replacing the Non-Financial Reporting Directive (NFRD). The latter served as the basis for formulating the indirect counterproposal to the Swiss Responsible Business Initiative. The CSRD aims to compel even more companies to report. From 2024, this means that all companies with at least 250 employees will be required to report on their CO2 reduction targets. The law will also apply to Swiss companies with an EU branch. ‘Sooner or later, every company will have to deal with its own carbon footprint,’ says Hug.

Exploiting market opportunities with carbon accounting

Witschi is convinced that there are further benefits to carbon accounting in addition to compliance with the new legislation: ‘Young people in particular care about who they work for. Companies gain an advantage when they can demonstrate environmental commitment.’ If you have not yet implemented CO2 management in your company or wish to professionalise it, you still have enough time in the new year. According to Hug, it takes around three to four months to produce a carbon footprint report.

Swisscom has already been able to reduce its Scope 1 and 2 emissions by more than 80% since the 1990s and will work in the new year towards its goal of climate neutrality by 2025 and then net zero. ‘We still have homework to do,’ says Witschi. ‘Automated measurement of our carbon footprint and tracking of the corresponding measures and targets allow us to tackle this major challenge transparently and in collaboration with internal employees and suppliers.’

This article was first published on Sustainable Switzerland.