With many corporations across a variety of industries, including the industrial, transportation, consumer goods, and utilities sectors following suit, accurate and credible greenhouse gas emissions (GHG) reporting has become all the more pressing and vital to reflect the progress towards the more ambitious carbon emissions goals being set.
In this article, the GHG emissions management experts at SINAI define emissions disclosure, outline the benefits, and provide essential tasks corporations should carry out in order to report on their CO2 emissions in a meaningful and sustainable way.
Defining carbon emissions disclosure
For a corporation’s emissions disclosure to be genuinely comprehensive, they should have a net-zero target in place that they are working on reaching by 2050 along with completing Scope 1, 2, and 3 inventories. Gone are the days when a company disclosing Scope 1 and 2 emissions data was sufficient, explains SINAI’s CTO and Co-Founder Alain Rodriguez’s in a recent blog.
With the majority of GHG emissions and related cost-savings opportunities existing outside of a company’s direct operations, accurately measuring and tracking Scope 3 emissions helps a company define:
- where carbon emission hotspots are in their value chain
- resource and energy risks in their value chain
- which of their suppliers are leading and which are falling behind when it comes to sustainability performance
- how to engage their supply chain and initiate sustainability initiatives
- how to make their products and services more energy efficient
Benefits of robust emissions disclosure
Comprehensive public disclosure by corporations of the climate-related risks associated with their operations helps bring down the cost of capital needed to fund the corporation’s strategic plans, whether they are spearheading a low-carbon transition or just trying to ensure their products and services remain relevant and sustainable into the future.
Robust emissions disclosure also eases efficient allocation of capital to corporations positioned to make the move to low-carbon business models.
In addition, it gives their capital providers - their financial institutions and investors - the detailed information they need to hold directors accountable for meeting set targets.
Essential emissions disclosure tasks
There are three critical tasks corporations should complete in order to develop a comprehensive carbon emissions disclosure:
1. Automate emissions inventories
To move towards a robust carbon emissions disclosure, it's essential to aid collaboration from as many relevant areas of your company as possible, with active participation from R&D, Operations, Finance, Sustainability, and Investor Relations.
Next-generation software solutions have the potential to calculate dynamic carbon inventories for your corporation, securing access to intuitive and easy-to-use interfaces for analyzing emissions data and providing valuable and necessary insight. The result is more accurate and complete emissions calculations.
Decipher Scope 1, 2, and 3 emissions automatically and upload key utility data together with other vital resource data that aid better carbon inventories. In addition, automated workflows and forms offer internal process improvements, leading to more manageable inventories.
2. Develop a baseline
Figure out what business as usual means for your carbon emissions by setting baselines you can easily track and monitor over time. Develop a coherent representation of your organization's opportunity for impact and risk mitigation while projecting carbon emissions based on your company’s historical activity data, growth, and changes.
This will help you better understand emissions across different areas of your corporation and make data-informed business decisions, in addition to helping you report a more robust disclosure of emissions.
3. Set an internal carbon price
Putting a price on the carbon your company emits is an efficient way of ensuring the carbon emissions disclosures you publish are as comprehensive as possible. This task consists of putting a price on your company’s carbon emissions - an actual, monetary amount - so the cost of the impact on the environment reflects what you produce.
CO2 emissions cost corporations more in many places as a result of carbon pricing. Producers and consumers look to technologies and tools that can help them generate less carbon.
With more and more companies introducing an internal price for the carbon they emit, this task quickly becomes an industry-standard across many sectors as an effective way to develop a more robust emissions disclosure.
Intelligent carbon emissions tracking
SINAI has developed the world’s leading decarbonization software that makes it easy for companies to publicly disclose the carbon they emit in a meaningful and comprehensive way.
Our inter-dependent modules make it possible for corporations to onboard at any stage in their carbon reduction journey and inject value at each step. SINAI’s software merges climate finance methodologies to manage carbon emissions reductions and costs, helping your company better manage your carbon strategy.
To see for yourself what the SINAI platform can do for your company, reach out for a demo of our software today.