By Steve Cain
Senior Manager, Novata Services
Increasingly, investors and regulatory bodies are demanding transparency on corporate environmental impacts, particularly carbon emissions. Many investors are factoring a company’s environmental performance into investment decisions, while regulatory bodies are implementing stringent reporting requirements.
As companies strive to measure and manage their carbon footprints, the quality and accuracy of the carbon data becomes critical. Without a solid foundation of reliable data, any potential decarbonization strategy risks being ineffective or, worse, counterproductive. Here are a few essential steps that companies can take to ensure their carbon data is high quality and accurate.
Providing guidance to portfolio companies on data collection
The first step in ensuring high-quality carbon data is to provide clear guidance to portfolio companies on how to collect this data. This involves educating them about the types of data needed to calculate emissions across their operations and supply chains. Companies should be encouraged to establish a systematic approach to data collection to ensure consistency and reliability. This could involve training staff, setting up standardized data collection processes, and using specialized tools to streamline the process.
Emphasizing transparency in data calculation
Transparency in data calculation is crucial, not only for internal confidence but also for external auditing and assurance, especially in light of regulatory requirements such as the Corporate Sustainability Reporting Directive (CSRD). By doing so, companies can ensure that their data meets the highest industry standards and is comparable across different reporting frameworks. This transparency bolsters the credibility of the data and builds trust among stakeholders, including investors, customers, and regulatory bodies.
Leveraging technology to build a carbon inventory
Technology plays a significant role in gathering and managing carbon data. Leveraging the right technology can significantly enhance the accuracy and efficiency of building a carbon inventory. Software solutions like the Novata Carbon Navigator can help companies quickly calculate Scope 1, 2, and 3 emissions, easily upload expenses to calculate emissions from supply chains, business travel, and other activities, and help compile an investor-grade audit trail when reporting on emissions. With technology, companies can more effectively keep track of their carbon data, enabling them to make informed decisions about their decarbonization strategies.
Evaluating completeness and quality of carbon data
Once a company has gone through the process of collecting carbon data, it is crucial to carve out time to evaluate its completeness and quality. This means going back, reviewing methodology and calculations, and identifying any potential gaps or inaccuracies. In some cases, engaging a third party to help with this data audit can help simplify the review process for companies. At Novata, we work with companies that report on the software platform to help them identify where gaps might exist in their data and refine their data collection processes. By conducting a thorough evaluation, companies can ensure that their data is comprehensive and reliable before setting targets.
Getting started with carbon measurement
The journey toward a sustainable future is complex, but the foundation of this journey is the accurate collection and analysis of carbon data. With the increasing scrutiny from investors and regulatory bodies, getting started on carbon measurement now is critical for companies. Novata stands ready as an essential partner in this journey, providing the expertise and tools needed to establish a reliable data foundation. Learn more about our recently launched Carbon Navigator to get started on your carbon journey today.