A recent survey has found over 50% of companies are now reporting at least some of their Scope 3 value chain emissions.
This marks a considerable increase from just a third two years ago. According to ESG Today, Boston Consulting Group (BCG), in collaboration with CO2 AI, conducted a survey illustrating these developments.
However, it’s important to note that comprehensive reporting across all emissions scopes remains stagnant, and fewer companies are achieving their emissions reduction goals compared to last year.
The CO2 AI + BCG Carbon Emissions Survey engaged 1,850 executives from various industries and countries. These executives are responsible for emissions measurement, reporting, and reduction in organizations with at least 1,000 employees and revenues ranging from approximately $100m to over $10bn. The survey results showed a slight increase in companies that fully measure and report Scope 1, 2, and 3 emissions, rising from 9% in 2021 to 10% in 2023.
There is a silver lining, though. The survey indicates a positive trend in partial Scope 3 emissions reporting. In 2023, 53% of respondents indicated their carbon emissions reporting includes at least partial Scope 3 emissions, a significant jump from 44% in 2022 and 34% in 2021. Scope 3 emissions, which include indirect emissions like supply chain activities, are notoriously challenging to measure. Yet, they constitute the majority of most companies’ overall emissions.
Furthermore, more companies are setting targets for reducing their value chain emissions. 35% of the companies have set Scope 3 targets, showing an increase from previous years. However, the survey highlights a concerning trend: only 14% of companies have achieved more than 75% of their emissions reduction goals over the past five years. Executives cite macroeconomic conditions, capital constraints, and immature abatement technology as significant barriers to achieving these goals.
Despite these challenges, there are tangible business benefits to decarbonization. Over half of the respondents recognized reputational value, with others citing lower costs, higher valuations, increased revenues, and talent attraction as additional benefits. Notably, 40% estimated annual financial benefits of at least $100m for meeting emissions reduction targets.
BCG’s Global Sustainability Leader, Hubertus Meinecke, emphasised the importance of intensified efforts in emissions measurement and reduction. He remarked, “There are encouraging signs of progress in measuring and reducing emissions, but it is crucial that businesses redouble their efforts. Doing so will not only help mitigate the impacts of climate change, but it will also deliver a boost to businesses’ bottom lines.”
The report also sheds light on the role of technology in achieving emissions reductions. 39% of executives pointed to technology adoption as a significant factor. Charlotte Degot, CEO and Founder of CO2 AI, highlighted the transformative role of technologies and artificial intelligence in bridging the gap between reduction ambitions and real impact.
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