Climate change is an unavoidable reality. For decades, scientists and activists have tried to shed light on this global crisis, and those efforts are finally taking hold. Consumers are increasingly demanding transparency when it comes to sustainable business practices.
Many businesses have made promises to become more sustainable or improve their carbon emissions, but empty promises will no longer cut it. Purchasing carbon credits for offsetting carbon emissions is the most unsustainable way to reach sustainability goals. Businesses need to align strategies with governmental carbon and climate neutrality regulations and meet investor expectations.
We do see some leading brands like IKEA, BASF and Mahindra take a proactive approach to drastically reduce their emissions. They have identified clear decarbonization strategies and set specific emission reduction targets and deadlines. But in most cases, these declarations vary widely in scope and definitions of their net-zero targets.
Scope 3 Challenges: CO2 Data Uncertainty Equals Financial Uncertainty
The transformation toward a low-carbon economy and net zero is challenging, especially when there is a lack of reliable emissions data. With net-zero emissions commitments becoming more important and regulated than ever, accuracy is of utmost importance.
Along with the differing decarbonization concepts and approaches, there is also an unwillingness of suppliers to provide their specific product carbon footprints. Not to mention a lack of internal commitment within an organization that adds to the challenges, leading to scarce and inconsistent data.
According to Green House Gas Protocol, there are 15 categories that Scope 3 emissions can fall into, including capital goods, business travel, and use of sold products. Scope 3 considers indirect emissions not owned by the reporting company but that affect the value chain.
