Only 10% of companies measure their emissions comprehensively

This is the conclusion of research on the measurement of carbon emissions in 2022 by Boston Consulting Group

Combating climate change is urgent. Companies recognize the need to reduce their greenhouse gas emissions not only for the planet, but also for the sustainability of their business models. While accurate and comprehensive measurement of emissions is crucial, achieving this is still a complex challenge for many organizations, especially measuring indirect emissions from their value chains, called Scope 3. These are some of the conclusions of the research on the measurement of carbon emissions in 2022, published by Boston Consulting Group (BCG).

The report builds on research BCG began conducting in 2021 on 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. In addition, 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 help companies achieve their zero-emission reduction goals,” says Charlotte Degot, founder and global leader of CO2 AI by CG. “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.”

Reducing emissions brings significant benefits

There is progress, but it is slow. 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 total scope of their emissions and 45% of those who measure them partially observed a significant reduction in them. On the other hand, in terms of business, more than 70% of respondents foresee at least one million euros per year in financial impact from reducing emissions, and 37% calculate 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%).

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 collectively responsible for more than 40% of global emissions.

Digital solutions needed

Respondents believe that greater leadership, better policy incentives (e.g. regulation, tax incentives) 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 according to their ambitions.

“The results of this year’s survey reveal an obvious 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 willingness to drive change in the culture of their organizations – both at the corporate level and in the public sector. For their part, organizations must adopt the digital and AI tools that are available to have the most accurate and complete measurement possible.”

Source: CSR Commitment