Most companies struggle to track their carbon emissions. Here's what they can do about it

In the fight against climate change, every company can do its bit. Action can come in many forms. A firm might, for example, adopt a keener eye toward procurement and prioritise greener, more sustainable partners, or insist that their cloud data be stored in server farms with a worthwhile heat reuse and net zero strategy. It could also track its own emissions throughout the business, and chart when, where and how emissions are released from every nook and cranny of the corporate structure and – when it’s measured – begin to shut off those metaphorical carbon vents once and for all. 

Only, most companies don’t seem to have the capability. A recent study by Microsoft and Tata Consultancy Services (TCS) found that approximately 80% of businesses surveyed stated that not only were they failing to disclose operational emissions targets, but lacked the means to impose decarbonisation initiatives throughout their supply chains. One analyst told Tech Monitor this was, in a large part, due to poor data management, with many companies still working from crude spreadsheets to track and trace their emissions contribution.

The problem lies in the quality of the data companies have to hand, explains Christina Shim, global head of product management and strategy for IBM. Simply put, argues Shim, too many businesses have poor data, or not enough information at all on how they might even get close to hitting their net zero emissions targets. That’s getting to be a problem for some companies. Last year, 33 companies across sectors as diverse as brewing, insurance and machine parts manufacturing were slapped with fines by the UK Environment Agency for under-reporting emissions, failing to reduce energy use, and leaving energy audits incomplete. 

These levies, pronounced the organisation’s deputy director for climate change, “should serve as an important reminder for all organisations to ensure that they are compliant with these schemes and are playing their part in tackling climate change”.

What actions should businesses take, then, to improve their data-gathering on emissions? The first should be to bone up on the existing regulations, explains James Lockyer, a portfolio management director in Microsoft’s environmental sustainability team. One new set of guidelines that’s proving especially relevant is the EU’s ‘Corporate Sustainability Reporting Directive,’ which came into force in January. This new playbook, says Lockyer, “imposes new rules to ensure investors and other stakeholders have access to the information they need to assess investment risks that arise from climate change”.

Supply chains should also be rationalised and monitored, explains Swati Murthy, director for strategic sustainability collaborations at TCS. “Reimagining global supply chains, and using the latest technology and analysis, is a vital step towards more sustainable practices,” argues Murthy.

All this requires a firm understanding of where and how emissions are being generated in the business. If the company doesn’t have that, explains Shim, then it needs to begin the tough work of bringing all that data together in a format which makes sense. “If you have it in all these different and disparate systems and they’re siloed,” she says, “how are you able to holistically understand where your organisation is and then most importantly, what you’re supposed to be doing from there?” 

You don’t do it using spreadsheets, says Shim, who advocates the judicious use of AI applications up and down a company’s supply chain to catalogue and predict its overall carbon emissions. There are plenty of services on the market that can help. Last year, for example, start-ups Cirrus Nexus and DispatchTrack respectively launched products designed to track emissions in the cloud and along delivery routes. Much larger players are also providing overarching tracking services. Both IBM’s Carbon Performance Engine and Microsoft’s Sustainability Calculator are harnessing businesses with actionable insights on emissions that they can use to meet and exceed net zero targets. 

Notwithstanding their advantages, most companies have yet to utilise AI and machine learning applications to comprehend their emissions contributions, and cut them. Indeed, most firms questioned in Microsoft and TCS’s joint survey still don’t know how to apply these systems to their own businesses. That’s partly down to the fact that most are still used to working with legacy data collection methods, and lack the manpower and expertise to adopt new solutions. 

Even so, Shim remains hopeful. For one thing, tracking and tracing emissions is a task that any and all businesses can, eventually, achieve through the use of smart AI solutions. What’s more, the efficiency of these systems has dramatically improved in recent years. But for now, says Shim, “companies are very, very far behind.”