Unleashing the power of data – and why it’s critical to achieving net zero

Unleashing the power of data – and why it’s critical to achieving net zero

Before discussing the reasons why, it’s worth looking at the scale of net zero adoption. A YouGov survey of more than 1,000 senior business decision makers, commissioned by resource management firm Veolia and published earlier this year, found that 29% of UK businesses have a strategy for reaching carbon net zero. Among larger companies, those with 250 or more employees, it was found that 52% have a net zero strategy. And globally, 111 of the world’s 167 biggest emitting companies have set net zero targets. This is expected to exponentially increase with the ramping cost and political complexity of carbon access.

It’s a phenomenon that is gaining traction, and those firms embarking on their net zero journeys are recommended to take a data-driven approach. Access to accurate data sources and straightforward reporting is vital, whether a company is at the start of their journey or making bigger strides and seeking accurate reporting. It is worth the extra effort up front to get to grips with those data sources, extraction options and create clarity from the outset. Starting with robust data not only ensures that the baseline set is an accurate one – after all, that will be used to set targets – it also mitigates against rework and recalculation later on down the line.

By analysing and using the insight their data provides into energy usage and associated carbon emissions, businesses are better equipped to make well-informed, optimised decisions as they move towards their net zero goal. Having a centralised, consolidated data repository allows businesses to get a complete view of their sustainability situation, with information on:

Carbon footprint: Understanding the full scope of carbon emissions in detail helps businesses identify where their emissions are actually coming from, and determine the size of the task when it comes to reduction or offset.

Decarbonisation Priorities: Having a clear grasp of the sources of carbon emissions at a detailed level can be used to inform a reduction strategy, so that a robust plan of action can be developed. Continued appraisal of accurate data along the way can also help businesses reprioritise or change direction if they need to; a vital tool to stay on target.

Clear Solutions: Knowing where the most focus should be applied enables businesses to decide how best to tackle those particular areas.

Track Progress: Accurate energy and emissions data is vital to tracking progress against targets and developing confident reporting for regulatory purposes. It should inform businesses where strategies need to be adjusted (or not) as they move closer to achieving their net zero goals.

Businesses account for 18% of all UK greenhouse gases – so if we’re going to tackle the climate emergency they must play their part. To do that, businesses must understand what they are emitting and how they can reduce it – and to understand that, they need data. But if that data is not accurate, it’s, well, pretty useless.

Most brands and businesses understand that customers and investors now seek clarity on climate commitments before they buy or invest. With such high-profile targets and many businesses keen to make public statements, confidence in the underpinning data is imperative. Setting and achieving energy and carbon goals based on incorrect data could have serious repercussions – to reputation, share price and even profitability. And, of course, where companies must make mandatory disclosures, they also risk fines for submission of incorrect data. 

The current state of climate reporting

Accurate data is vital for businesses to meaningfully report their carbon emissions. Reporting on carbon emissions is not uncommon for large companies, especially in the UK where mandatory disclosures are now required for the majority of large businesses. As part of the Streamlined Energy and Carbon Reporting (SECR), firms must disclose their Scope 1 and 2 (direct) GHG emissions in tonnes of carbon dioxide equivalent (including all seven gases included under the Kyoto Protocol), and report an emissions intensity ratio. The UK also encourages small and medium organisations to participate and provide their sustainability reporting voluntarily. Small businesses are also being encouraged to pledge to cut their emissions to net zero by 2050 or sooner, in part as a means to helping them grow, adapt and seize new opportunities. 

New rules go a step further, requiring eligible organisations to report Scope 3 emissions, including employee commuting, business travel, transportation, distribution, and waste. As more and more businesses commit to net zero via a Science Based Target pathway, Scope 3 will become even more important as it often forms >80% of a businesses footprint and encourages engagement with supply chains with regards to emissions and net zero.

In addition to SECR and (to a lesser extent) the Energy Savings Opportunities Scheme (ESOS) which have been around for a number of years, large financial institutions and large quoted companies are now having to get to grips with the requirements of the recommendations of the Taskforce for Climate-Related Financial Disclosures (TCFD) which casts the net for reporting even wider, beyond just Scopes 1 – 3, to cover governance and understanding and mitigating the risk that climate change could pose to a business. 

Poor data, spread across disparate systems (often spreadsheets) that aren’t auditable presents a risk to all businesses trying to navigate the growing regulatory landscape and credibly and responsibly reach net zero by 2050. Furthermore, access to robust data enables true embedded participation in these disclosure schemes (rather than tick box exercises), providing the impetus to really drive change within organisations. Good data should inform better decision making for businesses to plan for both the economic and environmental risk posed by climate change, and the opportunities presented by the transition to net zero.

Best practices for achieving accurate data

So, what’s the first step to avoid the pitfalls and risks of bad data? It’s probably to accept that there’s likely to be some errors in most data sets, and then begin to take steps to improve quality from the outset. Data accuracy can be improved with a few simple tips:

Implement a robust and ongoing data collection and calculation strategy. Use technology where you can to improve accuracy and coverage, and to streamline the process.
Use automation where possible to remove manual processes. This is a surefire way to eliminate human error and improve data quality.
If data is being audited, we shouldn’t only focus on the facts, but also on the opportunity to improve processes. Appraise the steps that you can take to improve data completeness and to consolidate data into a single repository. This helps avoid carrying duplicate data in different areas of the business.
Check your work, or even better, use technology to check it for you – misunderstandings can cost time, money and reputation.

In short, having a common, company-wide database stored in an easy to use system can help mitigate against a world of pain. It helps give the company one data truth across the whole organisation, makes data auditing easier and simplifies the process of collating and rationalising data from different sources. This simplifies and improves target setting, progress tracking and reporting.

Data that’s accurate is data that’s trustworthy

We know that having an accurate, trustworthy data set is paramount when setting targets and measuring progress. Generally, the larger the organisation, the bigger the volume of data to manage and the harder it can be to achieve consistently high quality data, due to multiple data sources in varying formats. Even well managed databases can suffer over time, requiring periodical data cleansing to protect data quality. This is where an integrated technology platform that’s built to recognise data quality issues like duplications, omissions and inconsistencies can help. And with auditability a key requirement of much sustainability reporting, using technology to bring data together and improve quality is more important than ever.

Accurate data also helps businesses avoid accidental greenwashing. This is important because as carbon pledges and net zero become more mainstream, stakeholders – from investors, to watchdogs and customers – are becoming far more familiar with the concept and are beginning to ask more questions, and quite rightly so. All businesses have an obligation to ensure their environmental claims are accurate, authentic and comparable, with the Competition Markets Authority (CMA) publishing guidance for businesses last year to help eliminate greenwashing.

How can we access better data?

So, how do we obtain, store and use good quality data? For a lot of businesses utility invoices and sub-meter data are the usual starting points. Utility bills provide the macro level data required for reporting, and sub-meter data (if a business has it) provides the granularity required to hone in on where efficiencies can be made. Processing invoices can be cumbersome and data is often spread across a mix of internal and external sources, including supplier portals, building management systems and sub-meter systems, to name a few. However, advancing technology goes a long way to making management of this data a less painful process. 

As a business grows, so does the number of utility invoices – an organisation with 100 locations can easily have 400 utility bills a month.  And with that number of data sets, there’s room for error. Not just within the bills themselves, but also in the ingestion of that data to reporting and accounting systems. Bill validation isn’t a new practice, but the technology involved in bill data collection and the systems that underpin validation have certainly come a long way in recent years. 

With the right technology partner organisations can create a single source of the truth, and the right technology platform will enable quick analysis and real-time updates with audit grade accuracy. The combination of historical and real-time data can help to build a robust framework for carbon reduction planning, empowering organisations to accurately track progress towards their sustainability goals. The end result? Clarity – companies will understand what they are tracking and how they are performing, when and where they need to take action and their overall progress towards their goals.

The journey to data confidence

We began this article by outlining that being able to access accurate, reliable and consistent data was an important enabler to robust environmental reporting. 

But it goes even further than that – inaccurate information doesn’t just jeopardise a business’s efforts to cut its carbon emissions, it also has a negative impact on wider society’s efforts to reach net zero and presents financial and reputational risks. All stakeholder groups are seeking that confidence – from the board, to the customer, to the staff attracted to work for an ethical business. The success of these targets relies on the data used to baseline, set, achieve and report them being accurate.

Therefore, it’s important to derive one version of the truth from a data perspective and ensure companies have software adaptable enough to accommodate a range of reporting requirements. Optima Technology is the benchmark in net zero data.

This is a promoted article.

The post Unleashing the power of data – and why it’s critical to achieving net zero appeared first on future Net Zero.

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