Perseus – the business case

v2023-12-01

SMEs

The business case for SMEs to engage lies in the potential for accessing capital, reducing emissions and enhancing reputation. As end-beneficiaries, SMEs do not have to join Perseus directly. Instead they are users of the software applications and banking solutions that use the SME’s data to provide insight. The SME does, however, have to provide explicit Permission for those organisations to use their data for analysis. Key points include:

  1. Access to capital: we aim to help SMEs unlock access to capital to reduce their emissions. By providing automated access to assurable energy data, SMEs can demonstrate their commitment to sustainability and provide reliable data to lenders. This will help them secure financing for energy efficiency upgrades, renewable energy projects and other sustainability initiatives.
  2. Improved data quality: we will improve the quality of data related to GHG emissions and energy usage. By automating the delivery of assurable data, SMEs will ensure that their data is accurate, reliable and standardised. This will help them identify areas for improvement, track progress and report on their sustainability performance more effectively.
  3. Enhanced reputation: participation can enhance the reputation of SMEs who use solutions that are part of the Perseus Implementation. By demonstrating their commitment to sustainability and transparency, SMEs can differentiate themselves from competitors and attract customers who prioritise sustainability. This can lead to increased brand loyalty, customer retention and positive recognition.
  4. Cost savings: a core benefit will help SMEs identify opportunities for cost savings related to energy usage. With access to comprehensive and reliable data, SMEs can identify areas for improvement, implement energy efficiency measures and reduce their energy costs. This can lead to significant cost savings over time, improving their financial health.
  5. Compliance: automating emissions reporting will help SMEs comply with regulatory requirements related to GHG emissions and sustainability reporting. By automating the delivery of assurable data, SMEs can ensure that they meet regulatory requirements and avoid potential penalties or fines.
  6. Business growth opportunities: as consumers and customers increasingly prioritise sustainability, SMEs that demonstrate their commitment to sustainability will attract new customers and expand their customer base. By participating in solutions that are members of the project, SMEs can differentiate themselves from competitors and tap into the growing market for sustainable products and services.

In summary, participating in solutions ‘powered by’ the project offers SMEs numerous benefits, including access to capital, improved data quality, enhanced reputation, cost savings, compliance and business growth opportunities. By engaging, SMEs can demonstrate their commitment to sustainability, improve their financial health and position themselves for long-term success.

Banks

Perseus is a global initiative that will enable banks and other financial institutions to unlock net zero incentives and reduce risks with open standards and assurable data.

The business case for banks to engage lies in the potential for improved climate risk management, enhanced ESG reporting and alignment with industry standards, such as PCAF and GHG Scope 3 Category 15. Key points include:

  1. Improved climate risk management: the aim is to better manage climate risk and audit loan books. By engaging, banks will access reports based on reliable and standardised energy data that will improve their ability to assess and manage climate-related risks. This will help banks identify potential vulnerabilities, develop mitigation strategies and ensure the long-term sustainability of their operations and investments. Alignment will enhance the credibility and reliability of banks’ climaterisk management practices, increasingly valued by investors and stakeholders. Further, improving the assessment of its customers will reduce the cost of capital and increase potential net zero lending.
  2. Enhanced ESG reporting and regulatory compliance: Perseus is aligned with regulatory requirements related to climate risk management, emissions reporting and sustainability. It aims to afford banks the opportunity to improve their ESG reporting and disclosure practices. By participating, banks can access reports based on reliable and standardised energy data that will enhance the quality and accuracyof their ESG reporting. This will help banks meet regulatory and compliance requirements, respond to investor demands and demonstrate their commitment to sustainability. By aligning, banks can contribute to the development of industry standards and best practices in ESG reporting and disclosure.
  3. Addressing GHG Scope 3 Category 15 and alignment with PCAF: the Partnership for Carbon Accounting Financials (PCAF), a global initiative that aims to develop a harmonised approach to measuring and disclosing the GHG emissions of financial institutions, has engaged in AG1 to ensure alignment. Perseus is aligned with PCAF’s methodology and reporting framework, and will enhance the comparability and reliability of its emissions data. It can help banks improve their reporting from a score of four (4) or above (poor) to a two (2) and below (good). Fully automating implementationof the PCAF methodology within the Perseus implementation with assurable data would further push calculation to a score of one (1), assuming there are no weak links elsewhere in the calculation methodology. This alignment demonstrates commitment to industry standards and best practices in carbon accounting and disclosure. In automating the usage of energy data to support Scope 2 for SMEs, banks will improve their GHG Scope 3 Category 15 emissions reporting and identify options (including personalised recommendations) that can help reduce the emissions of SME customers. This will help banks meet regulatory requirements, derisk the deployment of capital, respond to investor demands and demonstrate their commitment to sustainability. By aligning, banks will contribute to the development of industry standards and best practices in PCAF emissions reporting and disclosure.
  4. Market opportunities: engaging positions banks as industry leaders in sustainability and innovation. This will open up new market opportunities for them, including attracting environmentally conscious clients, accessing sustainable investment opportunities and differentiating themselves from competitors. By aligning and demonstrating a commitment to climate risk management, ESG reporting and industry standards, banks will enhance their reputation, build trust with stakeholders and strengthen their market position.
  5. Collaboration and partnerships: engaging will also provide banks with the opportunity to collaborate with other financial institutions, technology providers and industry experts. This collaboration can foster knowledge sharing, innovation and the development of best practices in climate risk management and emissions reporting. By participating, banks can access valuable resources, expertise and networks to support their sustainability efforts and drive continuous improvement. Additionally, collaboration with other stakeholders can lead to the development of new financial products and services that align with the transition to a low-carbon economy.

In summary, engaging can bring numerous benefits to banks, including improved climate risk management, enhanced ESG reporting, alignment with industry standards, market opportunities, collaboration and partnerships and regulatory compliance. By aligning, banks can strengthen their sustainability practices, enhance their reputations, attract environmentally conscious clients, access sustainable investment opportunities and contribute to the transition to a low-carbon economy.

Energy Companies

The business case for an energy company to engage is based on the benefits it can bring to the company’s operations, reputation and alignment with sustainability goals. Key points include:

  1. Capital allocation planning: Distribution Network Operators (DNOs) and related parts of our energy infrastructure need to know where the demands of their customers will intersect with funding, so they can use their capital allocation plans10 to greatest impact.
  2. Streamlined data access: we aim to automate access to assurable energy data at market scale. By engaging, an energy company can benefit from streamlined access to reliable and standardised energy data. This can improve the company’s internal data management processes, enhance operational efficiency and facilitate data-driven decision-making.
  3. Enhanced sustainability reporting: we are focused on automating GHG reporting across the entire economy. By engaging, an energy company can improve its sustainability reporting capabilities. This can help it meet regulatory requirements, demonstrate its commitment to transparency and accountability and enhance its reputation as a responsible and sustainable energy provider.
  4. Market opportunities: as a bold initiative, energy companies can position as industry leaders in sustainability and innovation. This can open up new market opportunities, attract environmentally conscious customers and differentiate the company from competitors. By aligning, energy companies can demonstrate their commitment to addressing climate change and contribute to the transition to a low-carbon economy.
  5. Risk management: we aim to better manage climate risk and audit loan books. By engaging, an energy company can improve its ability to assess and manage climate-related risks. This can help it identify potential vulnerabilities, develop mitigation strategies and ensure the long-term sustainability of its operations and investments.
  6. Collaboration and partnerships: engaging provides an opportunity for an energy company to collaborate with other stakeholders, including financial institutions, technology providers and auditors. This collaboration can foster knowledge sharing, innovation and the development of new low-carbon technologies and solutions. It can also enhance the company’s reputation as a collaborative and forward-thinking industry player.

In summary, engaging can bring benefits to an energy company in terms of streamlined data access, enhanced sustainability reporting, market opportunities, risk management and collaboration. By aligning, an energy company can improve its operational efficiency, strengthen its reputation, seize market opportunities, manage climate-related risks and contribute to the transition to a sustainable energy future.

Audit Firms

The business case for an audit firm to engage lies in the potential for enhanced audit quality, risk management and reputation. Key points include:

  1. Improved audit quality: we aim to automate access to assurable energy data at market scale. By engaging, an audit firm can benefit from streamlined access to reliable and standardised energy data. This can improve the quality and accuracy of audit procedures, enabling more effective identification and assessment of climate-related risks and opportunities. This can also enhance the credibility and reliability of audit reports, aligning with the objectives of audit firms to provide high-quality and reliable assurance services.
  2. Enhanced risk management: we seek to better manage climate risk and audit loan books. By engaging, an audit firm can improve its ability to assess and manage climate-related risks. This can help it identify potential vulnerabilities, develop mitigation strategies and ensure the long-term sustainability of its operations and investments. It can also enhance the firm’s reputation as a responsible and forward-thinking industry player.
  3. Market opportunities: engaging can position an audit firm as an industry leader in sustainability and innovation. This can open up new market opportunities, attract environmentally conscious clients and differentiate the firm from competitors. By aligning, audit firms can demonstrate commitment to addressing climate change and contribute to the transition to a low-carbon economy.
  4. Collaboration and partnerships: engaging provides an opportunity for an audit firm to collaborate with other stakeholders, including financial institutions, technology providers and ESG standards bodies. This can foster knowledge sharing, innovation and the development of new auditmethodologies and tools. It can also enhance the firm’s reputation as a collaborative and forward- thinking industry player.
  5. Regulatory compliance: we align with regulatory requirements related to climate risk management and reporting. By engaging, audit firms can ensure compliance with these requirements and provide added value to clients. This can also enhance the firm’s reputation as a trusted and reliable provider of audit services.

In summary,engaging can bring benefits to an audit firm in terms of improved audit quality, enhanced risk management, market opportunities, collaboration and regulatory compliance. By aligning, an audit firm can improve its operational efficiency, strengthen its reputation, seize market opportunities, manage climate-related risks and contribute to the transition to a sustainable future.

Carbon Accounting, reporting, and analysis firms

The business case for carbon accounting and analysis firms to engage lies in the potential for improved data quality, granularity and assurance, enhanced reporting capabilities and alignment with industry standards, such as PCAF and GHG Scope 3 Category 15. In addition, this approach represents a step-change in customer experience by making the connection to data a one-click process. With strong supporting communications, the process should increase trust and engagement with the SME community. Key points include:

  1. Improved data quality: we will automate access to assurable energy data, which can improve the quality and reliability of emissions data. By engaging, carbon accounting firms can access standardised and reliable energy data that can enhance the accuracy and completeness of their emissions inventories. This helps firms provide more robust and reliable carbon accounting services to their clients, enhancing their credibility and reputation in the market.
  2. Enhanced reporting capabilities: carbon accounting firms have the opportunity to enhance their reporting capabilities and provide more comprehensive and accurate emissions reports to their clients. By participating, carbon accounting firms can access reliable and standardised energy data that can improve the quality and accuracy of their emissions reports. This can also help them meet regulatory requirements, respond to investor demands and demonstrate their commitment to sustainability. Additionally, by aligning, carbon accounting firms can contribute to the development of industry standards and best practices in emissions reporting and disclosure.
  3. Alignment with PCAF: The PCAF has engaged in AG1 to ensure alignment. By engaging, carbon accounting firms can align with PCAF’s methodology and reporting framework, enhancing the comparability and reliability of their emissions data. This alignment can also demonstrate a firm’s commitment to industry standards and best practices in carbon accounting and disclosure.
  1. Address GHG Scope 3 Category 15: So that GHG Scope 3 Category 15 emissions for banks can be improved, we are focused on automating access to assurable energy data to automate Scope 2 reporting for SMEs. By engaging, carbon accounting firms can gain insights into their customer’s Scope 2 emissions and identify opportunities to reduce their carbon footprints. This can help them provide more comprehensive and accurate emissions reports to their clients, enhancing their credibility and reputation in the market. Additionally, by aligning, carbon accounting firms can contribute to the development of industry standards and best practices in Scope 3 emissions reporting and disclosure.
  2. Market opportunities: engaging can position carbon accounting firms as industry leaders in sustainability and innovation. This can open up new market opportunities for carbon accounting firms, including attracting clients who prioritise accurate and comprehensive carbon accounting, accessing partnerships with financial institutions and technology providers and differentiating themselves from competitors. By aligning and demonstrating a commitment to data quality, enhanced reporting capabilities and industry standards, such as PCAF, firms can enhance their reputation, build trust with clients and strengthen their position in the market.
  3. Collaboration and partnerships: engaging provides carbon accounting firms with the opportunity to collaborate with other stakeholders, including financial institutions, energy companies and technology providers. This can foster knowledge sharing, innovation and the development of best practices in carbon accounting and emissions reporting. By participating, firms can access valuable resources, expertise and networks that can support their sustainability efforts and drive continuous improvement. Additionally, collaboration with other stakeholders can lead to the development of new services and solutions that align with the transition to a low-carbon economy.
  4. Regulatory compliance: we align with regulatory requirements related to emissions reporting, sustainability and transparency. By engaging, carbon accounting firms can ensure compliance with these requirements and avoid potential penalties or reputational risks. This alignment can also provide firms with a structured framework for reporting and managing emissions, simplifying the process and reducing administrative burdens. By proactively addressing regulatory expectations through participation, they can demonstrate their commitment to responsible and accurate carbon accounting practices.

In summary, engaging will bring numerous benefits to carbon accounting firms, including improved data quality, enhanced reporting capabilities, alignment with industry standards – such as PCAF – and methodologies – such as the GHG Protocol – market opportunities, collaboration and partnerships and regulatory compliance. By aligning, carbon accounting firms can strengthen their sustainability practices,enhance their reputation, attract clients who prioritise accurate carbon accounting, access partnerships and collaborations and contribute to the transition to a low-carbon economy.

Standards and Reporting Bodies

The business case for ESG standards, framework and reporting bodies – such as PCAF, the World Benchmarking Alliance (WBA) and the Carbon Disclosure Project (CDP) – to support the project lies in the potential for collaboration, alignment of objectives and the advancement of sustainable finance. Key pointsinclude:

  1. Harmonisation of reporting standards: organisations, such as PCAF and the CDP, are dedicated to developing and promoting standardised reporting for carbon accounting and disclosure. By engaging, these bodies can contribute to the harmonisation of reporting standards and methodologies. This alignment can enhance data comparability, reliability and transparency, enabling more accurate and meaningful assessments of carbon emissions and climate-related risks.
  2. Facilitating carbon accounting: large enterprise businesses have the resources to calculate and report their carbon footprints in compliance with established standards. However, over 99% of businesses are SMEs and are responsible for around half of all business emissions (around a quarter of total emissions). By automating the process of measuring and reporting emissions, we will reduce the need for the expertise and time that small businesses lack. In turn, this opens up the potential for accurate, reliable reporting across supply chains comprising businesses of all sizes, which is essential for managing emissions to achieve net zero.
  1. Data quality and assurance: we will provide a trusted and assurable process for accessing and reporting GHG data. ESG standards and reporting bodies can contribute to the development of robust data quality and assurance mechanisms. This can enhance the credibility and reliability of GHG data reported by financial institutions, aligning with the objectives of PCAF, WBA and CDP to ensure accurate and verifiable carbon accounting.
  2. Integration of financial and ESG data: we will automate the flow of energy data from utilities to financial institutions. ESG standards bodies can contribute to the integration of financial and ESG data. This integration can provide a more comprehensive view of the environmental impact and climate risks associated with financial portfolios. It can also facilitate the development of innovative financial products and services that incorporate ESG considerations.
  3. Advancement of sustainable finance: we align with the objectives of sustainable finance, which aims to integrate environmental and social factors into investment decision-making. ESG standards bodies can contribute to the advancement of sustainable finance practices. This can help investors and financial institutions better assess climate-related risks, allocate capital to low-carbon and sustainable projects and drive positive environmental and social outcomes.
  4. Collaboration and knowledge sharing: this is an opportunity for ESG standards bodies to collaborate with other stakeholders, including financial institutions, utilities and technology providers. This can foster knowledge sharing, innovation and the development of best practices in carbon accounting and disclosure. It can also enhance the collective understanding of emerging sustainability challenges and facilitate the evolution of reporting frameworks to address these challenges.

In summary, engaging can bring benefits to standards and reporting bodies in terms of harmonisation of reporting standards, data quality and assurance, integration of financial and ESG data, advancement of sustainable finance and collaboration. By endorsing and collaborating, standards, frameworks and reporting, bodies, such as PCAF, WBA and CDP, can contribute to the development of standardised and reliable carbon accounting practices, enhance the credibility of GHG data, promote the integration of financial and ESG considerations and drive positive environmental and social outcomes. This can also foster knowledge sharing, innovation and the development of best practices in carbon accounting and disclosure, ultimately advancing the collective understanding and implementation of sustainable finance principles.

Regulators and Policymakers

The value case for government policymakers and regulators to engage lies in the potential for improved climate risk management, enhanced emissions reporting and alignment with regulatory requirements and industry standards. Key points include:

  1. Improved climate risk management: we will automate access to assurable energy data, which can improve the quality and reliability of emissions data. By engaging, policymakers and regulators can access standardised and reliable energy data that can enhance their understanding of climate risks and inform policy decisions. This can help policymakers and regulators develop more effective climate policies, identify areas of high risk and support the transition to a low-carbon economy.
  2. Enhanced emissions reporting: policymakers and regulators have the opportunity to enhance emissions reporting capabilities and provide more comprehensive and accurate emissions reports to industry and the public. By participating, policymakers and regulators can shape the definitions of reliable and standardised data that can improve the quality and accuracy of emissions reports. This can help them create regulatory requirements, respond to public demands for transparency and demonstrate their commitment to sustainability. Additionally, by aligning, they can contribute to the development of industry standards and best practices in emissions reporting and disclosure.
  1. Shape regulatory requirements: we help implement regulatory requirements related to climate risk management, emissions reporting and sustainability. By engaging, policymakers and regulators can ensure compliance requirements and incentives are aligned. This can also provide them with a structured framework for shaping reporting, simplifying the process and reducing administrative burdens, while also ensuring potential negative consequences are understood and mitigated. By proactively addressing regulatory expectations through participation, policymakers and regulators can demonstrate their commitment to responsible and sustainable policy-making.
  2. Alignment with industry standards: the PCAF has engaged in AG1 to ensure alignment. By engaging, policymakers and regulators can better understand alignment with, and direct incentives towards, PCAF’s methodology and reporting frameworks to enhance the comparability and reliability of emissions data.
  3. Market opportunities: engaging can position policymakers and regulators as leaders in sustainability and innovation. This can help shape how opening up access to data in an open market will create new opportunities, including attracting investment, fostering economic growth and attracting businesses that prioritise sustainability. By aligning and demonstrating a commitment to data quality, enhanced reporting capabilities and industry standards, policymakers and regulators can enhance their reputations, build trust with stakeholders and strengthen their positions as leaders in climate action.
  4. Collaboration and knowledge sharing: engaging provides policymakers and regulators with the opportunity to collaborate with other stakeholders, including financial institutions, energy companies and technology providers. This collaboration can foster knowledge sharing, innovation and the development of best practices in climate risk management and emissions reporting. By participating, policymakers and regulators can access valuable resources, expertise and networks that can support their policy-making efforts and drive continuous improvement. Additionally, collaboration with other stakeholders can lead to the development of new policies and regulations that align with the transition to a low-carbon economy (e.g. with the Net Zero Council).
  5. Public trust and transparency: transparency and accountability in emissions reporting and climate risk management is core to the project. By engaging, policymakers and regulators can demonstrate their commitment to transparency and provide guidance for transparent, assurable, reliable and standardised information on emissions and climate risks. This can enhance industry and public trust in government actions, increase awareness and understanding of climate issues and foster public support for sustainable policies and regulations.
  6. International leadership: by leading the way, policymakers and regulators can position themselves as international leaders in climate action. This can enhance their influence in global climate negotiations, attract international collaboration and partnerships and contribute to the development of global standards and best practices. By aligning policies and regulations, they can demonstrate their commitment to global climate goals and inspire other countries to follow suit.

In summary, engaging can enable government policymakers and regulators to bring benefits across the economy, including enabling improved climate risk management, enhanced emissions reporting, alignment with regulatory requirements and industry standards, market opportunities, collaboration and knowledge sharing, public trust and transparency and international leadership. By aligning, they can strengthen their climate policies, enhance their reputations, attract investment and businesses, foster economic growth and contribute to the global transition to a low-carbon economy.

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Please contact us at perseus@ib1.org if you would like to discuss anything.