Posted on 15 April 2022
Going Green Starts with Data
Featuring Christopher Allen from Diligent.
Adopting environmentally sound policies needs to be driven by information and integrated into ESG practices to ensure positive outcomes, says Christopher Allen, Director of Product Marketing at Diligent, the global leader for Governance Risk and Compliance (GRC) software.
Back in 1987, humorist Charles Dudley Warner wrote, “Everyone’s talking about the weather, but nobody does anything about it.” The quote has become embedded in our cultural lexicon as an acknowledgement that there are certain things that we just can’t control, but as it turns out, humans actually can control our environment, and how we act today can significantly affect the future health of our planet. In the face of unprecedented global warming and climate change, largely caused by global dependence on fossil fuels, we are beginning to realise how important it is for companies and individuals to do whatever they can to reduce their carbon footprint.
As pressure to tackle climate change intensifies, so does scrutiny of the actions being taken to reduce our global carbon footprint. On a corporate level, this plays out in many ways. For instance, organisations are exploring ways to measure greenhouse gas emissions, minimise their corporate impact, and manage and report on their ESG performance overall. Reducing your carbon footprint is a core objective for any organisation that wants to address its environmental impact. Controlling greenhouse gas emissions is a fundamental aspect of this. In the end, it all comes down to having the right systems in place to collect data to drive green policies.
When considering how to measure greenhouse gas emissions, most will inevitably come up against several challenges. Some of the obstacles businesses face when measuring carbon emissions include:
- It’s time-consuming. Greenhouse gas emissions in many reporting initiatives, such as the Global Reporting Initiative (GRI), Dow Jones Sustainability Index (DJSI) and FTSE4Good Index, make up less than 40% of the total questions. However, these can take up to 90% of the total time involved in compiling the report for some responding organisations.
- The range of data needed can be overwhelming. Organisations may need to prepare, track and disclose key metrics in line with many regulatory frameworks and standards — and across a large number of data points, in their own operations and their supply chain.
- Reporting rules and emissions factors are constantly evolving. Different countries, industries, and cities may have different reporting requirements and emissions targets. The number of emissions factors is growing all the time. Keeping pace with obligations can be exhausting.
- Reporting must be done within tight deadlines. Under the US GHGRP, businesses are required to report emissions from the previous calendar year by 31st March. Firms must work quickly to capture, verify and report on all the metrics within their remit.
- The stakes are high. When it comes to climate-related reporting, accusations of greenwashing are rife; investors, customers and other stakeholders are suspicious of a “smoke and mirrors” approach to compliance. Accuracy is imperative — but with so many data points, often across entities and geographies, accurate and comprehensive data can be elusive.
- Best practice in ESG demands integrating greenhouse gas emissions reporting with broader environmental and ESG strategies. This is a challenge for many organisations; data-gathering is a struggle, and aggregating metrics into a comprehensive ESG strategy is even more so.
How to measure greenhouse gas emissions: Overcoming the obstacles
The complexity of collecting climate data and reporting on it in ways that meet regulatory reporting and audit requirements can seem daunting. With emissions sources covering data points ranging from waste and water to business travel and supply chains, knowing where to start and how to ensure a complete, accurate picture can seem an impossible task.
It’s no wonder that many organisations are turning to technology to help. Data collection via cloud-based platforms shares the workload, enabling colleagues worldwide to input data. User-friendly platforms not only make data entry easier – therefore reducing human error – but they can also present results back in easy-to-read dashboards.
A good solution will provide access to an up-to-date and comprehensive list of emissions factors, simplifying the job of measuring greenhouse gas emissions. The best solution will remove the risk of calculation errors, which can occur when converting one unit of measure to another, by translating inputs to the required unit of measure.
ESG reporting is still a developing science. With the media and public ready to shine a harsh spotlight on any failings, it’s not surprising that businesses are nervous about reporting and keen to ensure a meticulous approach. Organisations that are struggling to measure greenhouse gas emissions can rely on technology to help them overcome these challenges and move towards more integrated, accurate and comprehensive emissions reporting.
This article was originally published in the Sensus Magazine. Click the image to flip through our most recent issue or browse through our previous editions of the magazine.