Combating climate change is urgent and companies recognize the need to reduce their greenhouse gas emissions not only for the planet, but also for the sustainability of their business models. Although accurate and comprehensive measurement of emissions is crucial for companies to combat climate change, achieving it is still a complex challenge for many organizations.
These are some of the conclusions of a research on the measurement of carbon emissions in 2022 that has been published by Boston Consulting Group (BCG), and which refers to the complexity of measuring, especially, the indirect emissions of value chains, called Scope3.
The report builds on research BCG began conducting in 2021 into the progress organizations around the world have made in measuring and reducing their carbon emissions. Although there have been improvements in the last year, they have generally been slow across sectors and regions: only 10% of companies measure their emissions comprehensively (Scope 1, 2 and 3) in 2022, compared to 9 % in 2021.
Additionally, respondents estimate an average error of 25% to 30% in their emissions measurements. And, although 92% of all emissions are external (Scope 3) according to the Carbon Disclosure Project (CDP), only 12% of organizations surveyed consider Scope 3 as their top priority.
“These measurements are crucial to helping companies achieve their zero emissions goals,” says Charlotte Degot, founder and global leader of the CO2 AI by CG area. “It is increasingly necessary for them to rely on digital tools that help them achieve greater precision and completeness, which will help them in decision-making,” she adds.
The benefits of reducing emissions
There is progress, but it is slow, according to BCG. The data from this year’s edition reinforces the fact that the better a company measures its emissions, the more effectively it can reduce them: 64% of respondents who measure the full extent of their emissions and 45% of those who partially measure them They observed a significant reduction in them.
On the other hand, in business terms, more than 70% of respondents anticipate at least one million euros annually in financial impact from emissions reduction, and 37% estimate benefits of up to 100 million euros or more. In addition, companies have reported other benefits, such as improved reputation (54%) or the ability to attract more talent (37%), the consulting firm notes.
To conduct this survey, BCG surveyed more than 1,600 organizations with 1,000 or more employees and revenues ranging from approximately €100 million to more than €10 billion, across 14 major sectors and 18 countries. These organizations are, together, responsible for more than 40% of global emissions.
Digital solutions needed
Respondents believe that greater leadership, better policy incentives (regulation and tax incentives, for example), and the adoption of digital solutions are needed to accelerate the measurement and reduction of emissions. On the digital front in particular, organizations that have automated solutions for measuring their emissions are 2.2 times more likely to measure emissions comprehensively and 1.9 times more likely to reduce emissions in line with their ambitions , according to BCG.
“This year’s survey results reveal one clear fact: the time has come to urgently accelerate progress in terms of measuring and reducing emissions,” explains Hubertus Meinecke, global leader of BCG’s Climate and Sustainability practice.
“Leaders must demonstrate their convictions and their willingness to promote changes in the culture of their organizations – both at the business level and in the public sector. For their part, organizations must adopt the digital and artificial intelligence (AI) tools that are available to have the most accurate and complete measurement possible,” he concluded.
Source: Revista Haz