Accurate Carbon Data: The Foundation of Effective GHG Action

Summary

With consumer preferences quickly becoming consumer requirements, and with increasing government regulation, accurate carbon footprint measurement has begun to transcend concerns of reputation and compliance – it’s quickly becoming a matter of commercial viability. As climate change awareness continues to grow, industries of all types are facing increased pressure to reduce greenhouse gas emissions, land-use intensity, and water consumption.

In this post, we will discuss the environmental and economic benefits of accuracy in emissions measurement, focusing on product-level accounting. We will draw parallels with the healthcare and financial sectors, illustrating the value of precise data in decision-making, and why adopting product-level accounting is the future of sustainable business. We will also propose certain core requirements we feel are integral for solutions tackling emissions measurement, and how businesses can act today in the pursuit of emissions reduction.

The Importance of Accuracy

In many of our partner conversations, one theme comes up time after time. Getting accurate data can be difficult, and even when you have accurate data, making it useful is challenging. At the same time, measurement accuracy is essential for driving action, particularly when pursuing ambitious net zero targets. To illustrate, let us consider two industries where accuracy is crucial for business activities: healthcare and finance.

Healthcare: In medicine, accurate diagnosis is the bedrock foundation for effective treatment. An accurate, precise diagnosis enables healthcare professionals to develop targeted therapies, leading to better patient outcomes.

Finance: Auditors give their opinions on financial data, compiled according to accepted rules and practices. Investors won’t look twice at a company that is unwilling to share financials transparently, and rightfully so. Precision and materiality count, and can determine the very viability of the firm.

Today, vague corporate financials and poor diagnostic capabilities are considered unacceptable. We are starting to see that same sea change in carbon accounting. There is a growing awareness of, and push for, the most accurate and timely data possible so that businesses can drive effective action.

PCFs – Looking Forward & Finding Value

The same principles that drive patient outcomes and underly actionable financial reports apply to the future of carbon management; accuracy enables action. Key benefits of accurate carbon measurement include:

1. The ability to identify emission hotspots. When looking to make an outsized impact in your operations and supply chain, you want to start with the areas of outsized emissions. While corporate level accounting is useful in establishing a baseline, it’s product-level accounting that allows you to act.
2. Data-driven innovation. Precisely targeting weak links in supply chains is an effective way to channelize the innovation require to transform technologies, materials, and practices. Innovative efforts are guided towards areas of pre-defined high reward.
3. Improved transparency and stakeholder engagement. Accurate data allows stakeholders to engage with and advocate for the changes they value in a firm. Without an accurate baseline and easy to digest data, firms and stakeholders are less likely to align and more likely to pull in different directions.
4. Enhanced competitive advantage. Sustainability has long been a competitive advantage. What’s more, inaccurate claims are quickly becoming a source of major corporate loss. Without accurate data, environmental claims are likely to lead to increasing (and potentially existential) risk.

What Should We Expect from Carbon Footprint Software?

For even the most sustainability-conscious firms, there are several tricky challenges preventing rapid progress on the data front.

1. Data Management. Simply put, there is a lot of unstructured life cycle data, and it can be difficult to find the most relevant sets for specific supply chain challenges. For many firms, collecting this data (combing through thousands of pages of PDF documents and reports) simply isn’t feasible. We need to make data – structured and unstructured – easy to access and digest for non-LCA experts so that business leaders can make sustainable decisions.
2. Supplier Relations. Where data has not yet been collected, certain suppliers are hesitant to make collection efforts, with a bias towards avoiding these transactional costs. Oftentimes, there’s a concern that cost-structures and other competitive advantages will be revealed in emissions data. Tools for communicating GHG emissions must help communicate the right information, while sanitizing elements of competitive advantage.
3. User-Friendly. It almost goes without saying – modern software needs to be designed with the user in mind. If it takes an advanced degree to operate, a platform is unlikely to scale out to enough users to make a tangible difference in the race to zero.

Whether it’s a case of driving towards Science Based Targets (see SBTi), or communicating environmental progress to stakeholders, there’s a lot more that software can be doing to make corporate sustainability actions more effective. We believe that the path to a carbon neutral world by 2050 involves dramatic improvements in accuracy, and are working hard towards that end.

For a look at some of our new partner-driven features, have a look at this recent update from our product team.