5 Steps to Effective Carbon Data Management

ESG is gaining momentum across the industrial sector. Investors, regulators, and consumers demand greater focus on driving down greenhouse gas (GHG) emissions in line with achieving global net zero ambitions. The one thing that all ESG programs must have as their foundation is good, reliable data.

Data is the currency through which measurable progress against environmental and sustainability targets can be measured. Yet, for many companies, quantifying progress can be a challenge. Data is difficult to access, unreliable, and hard to analyze in a timely manner. How can you know where you stand and how you are doing against your targets, if you cannot access the data quickly and effectively?

Further, the burden of creating the submission-ready reports required by the regulators can be high as can the financial risk and reputational damage that results from emission miscalculations.

In this extract from our exclusive report, we begin looking at the 5 essential steps to achieve effective carbon data management to drive your sustainability efforts to the next level of performance.

Step 1: Understand your obligations

A solid foundation for effective carbon data management needs to be established the same as any other business change program: methodically and expediently.

Start with climate-related disclosures that your company has already made. What targets have been publicly set? What data and baselines are you using to set your targets? What reporting requirements are required for the regions in which you operate? How might you be affected by the requirement for scope 3 emissions disclosures?

All publicly announced targets must be based on solid data and sound science.

“We absolutely should be setting targets. The question is, did you make them on real numbers?” asks Michael Tuohy. “Did you actually have the availability of that information to make those goals?”

The International Sustainability Standards Board (ISSB) is expected to have new guidelines on sustainability disclosure standards ready by the end of the year. The SEC has used the ISSB disclosure standards as the foundation for its own disclosure reporting requirements.

In Europe, EFRAG is taking the lead on developing the EU’s Corporate Sustainability Reporting Directive (CSRD). According to EFRAG, agreements have been signed with reporting standard initiatives GRI, Shift, and WICI to help “contribute to international convergence” of standards. Working papers of those guidelines are being developed and will be available on EFRAG’s website as they develop.

The exact regulatory landscape ahead is complex and uncertain. However, it is a certainty that both markets and regulators will demand greater ESG transparency in the coming years. Companies can look to these standard frameworks to understand what data will likely be needed before the requirements become law.

Step 2: Capture your data

To continue reading, download the full 5 Steps to Effective Carbon Data Management report.