In the UK, approximately 5.9 million SMEs are responsible for nearly half of the nation’s business greenhouse gas (GHG) emissions. However, these businesses face significant challenges in participating in accurate emissions measurement and reporting. The absence of standardised processes leads to inconsistent data, hindering our efforts to reduce emissions.
The Perseus Project, spearheaded by Bankers for NetZero and Icebreaker One, aims to transform this landscape by facilitating trusted, comparable, and actionable emissions reporting. It seeks to establish a seamless flow of primary emission data, empowering SMEs and alleviating their reporting burdens.
“Perseus will enable automated sustainability reporting for every small business in the UK, so that we can reduce emissions faster. We’re setting our sights on making it easy to share the accurate, assurable data that sits behind emissions calculations. In turn, that will enable a host of other products and services, including carbon reporting, analysis and transition planning solutions – improving the quality and timeliness of the data they use.” – Gavin Starks, Founder and CEO, Icebreaker One
Connect Earth as a founding member
Connect Earth proudly stands as a founding member of the Perseus Project, recognising its potential to benefit SMEs and financial institutions alike. We serve as a vital link connecting the project, SMEs, UK banks, audit and accountancy firms, ensuring transparency and meaningful action. By initiating collaboration between stakeholders, we facilitate a smoother path towards decarbonization and Net Zero.
“It is a privilege to be a founding member of Project Perseus. This collective project unites banks, financial institutions, carbon accountants and other organisations to align and deliver standard ways for automating carbon accounting for SMEs via their banking platforms. It is a much needed effort to support UK SMEs and we look forward to the strides made within this environmental initiative.” Nick Carmont, CTO and Co Founder, Connect Earth.
Perseus’ approach to help financial institutions
Becoming a part of Perseus offers banks a number of valuable advantages. Here’s how it can transform financial institutions:
- Regulatory Compliance: Perseus supports compliance with climate, emissions, and sustainability regulations, simplifying reporting and reducing risks. At Connect Earth, this is something we have also built into our services – making compliance central to reporting efforts.
- Improved ESG Reporting: Participating in the Perseus project streamlines the ESG reporting process; elevating the accuracy of the data and increasing sustainability commitment alongside meeting regulation.
- Increased Trust and Market Opportunities: By aligning with Persues, banks can attract eco-conscious clients and streamline access to green finance initiatives. Perseus fosters collaboration, knowledge sharing and product development for financial institutions and their stakeholders.
- Climate Risk Management: Assurance that data is accurate means banks and their business customers can make informed decisions. Assessing the impact of their investments, loans, supply chains and business practices enables identification of climate-related risks, allowing for mitigation to take place.
- PCAF alignment: Perseus is taking steps to ensure that its data collection aligns with the widely accepted industry framework (PCAF) to make its data more comparable.
“Because the rules and processes Perseus creates will be used across sectors, a wide range of organisations are working together to create them. Perseus is a non-profit project that brings together banks, trade associations, regulators, government, standards bodies, small businesses, and corporates. They’re working together on a pre-competitive basis – working side-by-side to solve a shared problem” – Gavin Starks, Founder and CEO, Icebreaker One
Perseus Project and the data sharing revolution
Following the principle of ‘connect don’t collect’, Perseus’ aim is not to build a database or an application, but instead to create compliant, legal processes that enable data sharing at scale. It will contribute to existing reporting and analysis solutions, helping them work more efficiently.
Perseus aims to enable data sharing from the non-financial economy, to the financial economy, with the consent of SMEs. This aligns with the concept of a “Trust Framework” for data sharing, which is supported in the UK’s Data Bill. The project also does not store or “see” the data itself. This further aligns with the Data Bill’s focus on security and privacy. Alongside the UK’s Data Bill, Perseus also embraces the Smart Data Council’s goals of collaboration, data standardisation, and using data for societal and environmental benefits.
As a starting point, Perseus is focusing on electricity data for small businesses to build the framework for data to flow. The project will then consider which other data flows will represent the greatest materiality and should next be tackled.
The challenge of GHG reporting for SMEs
SMEs encounter numerous obstacles in GHG reporting, requiring support from initiatives like Perseus, alongside the government and financial institutions.
- Legislation: SMEs in the UK are facing a critical challenge with upcoming ESG legislation becoming widely adopted and enforced. For example, the upcoming CSRD directive, an EU based legislation, that will impact as many as 50,000 businesses from as early as 2024.
- Resources: Whilst GHG reporting is needed to establish baselines for action, participating can be a resource intensive process. Many SMEs lack the internal knowledge and cash reserves to invest in taking part in reporting.
- Data Quality: Global SME participation in ESG and GHG reporting is needed in order for us to make effective change, but the quality of the data we gather is of equal importance. If we cannot collect data accurately, or even access reliable datasets, participation and action is limited.
In our blog The Biggest Problem With Carbon Accounting, we dive into these issues further.
Connect Earth’s role in addressing these challenges
Working closely with the Perseus Project, Connect Earth aims to inspire solutions to the challenges faced by SMEs, making climate action more accessible and impactful. By streamlining GHG reporting, we empower them to focus on their core activities while enhancing data quality. Additionally, we seek to unlock access to capital for SMEs by enabling them to share trustworthy sustainability data, creating incentives for decarbonization and enhancing their reputation. Through collaboration and participation in Perseus, SMEs gain access to a valuable network, positioning themselves to align with emerging regulatory trends and contribute to a sustainable, net zero carbon economy.
“Carbon reporting is complex and so rather than ‘boiling the ocean’ we are starting by doing one thing well: automating electricity consumption data for Scope 2 reporting. Reporting needs to be easy and secure for SMEs, who don’t have the resources, time or budgets to engage in complex reporting processes, and can feel wary of how their data might be used. Perseus addresses automating the process and brings protections to the use of their data.
“This is just the first step. Once we’ve built the process for data sharing at scale we’ll add other areas – like water, transport and agriculture – based on the needs of the banks and the SMEs. Eventually, using this approach Icebreaker One will help corporates accurately understand their supply chain emissions, help the insurance sector manage climate risks, and help asset managers better understand their risks and transition plans. This is a systemic challenge and we are building out partnerships such as Perseus to bring people together to turn theory into action…“ – Gavin Starks, Founder and CEO, Icebreaker One
The roadmap for the future of GHG reporting
In 2023, Perseus is focused on building a demonstrator and fostering collaboration among stakeholders. Subsequent years will expand the scope of data flow to aid the automation of Scope 3 reporting, and develop comprehensive go-to-market plans. Connect Earth remains dedicated to supporting this project, offering automated products that can easily integrate into digital banking environments, spreading accessibility across the UK and beyond. We welcome the standardisation that Perseus will bring to a data-scape that requires both extreme accuracy and open accessibility.
Financial institutions – take note of Perseus, it is set to be a transformative project in sustainable finance, offering you a chance to lead, innovate, and contribute to a greener UK economy by joining the mission.
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About Connect Earth:
Founded in 2021, Connect Earth is a London-based environmental data company that democratises easy access to sustainability data. With its carbon tracking API technology, Connect Earth is on a mission to empower consumers and SMEs to make sustainable choices and bridge the gap between intent, knowledge and action. Connect Earth supports financial institutions in offering their customers transparent insight into the climate impact of their spending.