Emissions as data: the challenge of reporting on an invisible metric

We just witnessed one of the more heated climate change conferences on record — not in terms of temperature, but debate. Australia seemingly rejected the nuclear overtures of its allies as it aims to continue to focus on solar, wind and other renewables. Meanwhile, the nation has begun developing its 2035 Nationally Determined Contribution (NDC) — effectively its new emissions reduction target — after COP30 host Brazil and other nations introduced theirs.

In short, there’s a lot left to discuss, legislate and more in the coming 12 months. But what’s not up for debate is the need for, and importance of, data, particularly with the requirement for environmental, social and governance (ESG) reporting foisted upon industry.

Since 1 January this year, Australia’s largest organisations have been required to deliver mandatory climate-related reporting, including disclosures on climate-related risks and opportunities, and on greenhouse gas emissions across the value chain. This will soon begin for medium-sized companies as well.

The legislation also includes a phased-in approach for Scope 3 reporting, allowing companies an extra year from the beginning of their disclosure requirements to report on the quantity of their indirect value chain emissions, in addition to three years of protection from litigation concerning Scope 3 disclosures.

The challenge many businesses face is quite apparent: how does one measure emissions? When reporting on financials, that’s simple, at least relatively speaking, compared to emissions reporting: it’s a paper trail of purchases, receipts and more, including pipeline of business and other metrics. In effect, everything is recorded – and it’s a matter of collating everything from there — with experts in finance teams now having perfected it into a fine art.

But how does one measure an emission, let alone tons of them? And when we get down to Scope 3 emissions, how do we apply this to the entire value chain?

Again — and this is not to minimise the challenge organisations face — but it comes down to the data. And the ability of experts to record and report on emissions has improved immensely as the need to report on these data becomes ever more important.

We’re now able to accurately determine how energy-efficient various technologies are, their carbon footprint and more. The issue for businesses is that their systems are so vast — but with the right systems in place, these emissions can be recorded in the background.

AGL is one such example — it is leveraging a thermodynamic performance-optimisation system, which aims to reduce fuel consumption by 0.5% and reduce CO₂ emissions, a marginal improvement that translates to savings of millions of dollars per year. The second is a wind-yield-optimisation system, which targets a 1–2% increased yield in AGL’s wind portfolio.

In addition, with the right technologies in place, organisations can more easily connect their systems to speak to each other, which not only helps to record emissions, but to reduce emissions and the silos within organisations and with their partners.

For example, Talison Lithium is one of the largest lithium producers in the world with complex processes, multiple plants and sites, and many data sources. To address this level of complexity and scale, it created a unified system with cloud capabilities for production reporting and tracking from pit to port. This integration has resulted in reduced downtime and increased end-of-month reconciliation efficiency and accuracy.

Organisations can also use digital twins, which are, in short, a virtual representation that serves as the real-time digital counterpart of a physical object or process. There are two types of digital twin: the engineering digital twin helps companies optimise the design and build of a new plant with energy efficiency and sustainability in mind, while the operational digital twin is focused on building a replica of operations to streamline efficiencies including energy usage.

Leveraging both ensures businesses can improve every stage of the operational life cycle, ranging from improved design fidelity and decision-making to optimised construction and management. This ultimately helps organisations make more informed decisions that can help them achieve their sustainability goals as they are able to model site operations or energy usage via the digital twin.

When it comes to ESG reporting, having a consolidated holistic view of data inputs, inclusive of emissions, helps organisations harness their data and make accurate analysis in line with legislative requirements.

The point is that there are methods to report on something that, to the naked eye, is invisible — but an emission, ultimately, is another data point that now can and must be recorded.

We’re heading into an election year and much may change — but what is certain is that reporting on our emissions is to begin — and organisations need to prepare for the new standard.

If organisations don’t get on the front foot on this, the fines could be immense, and the pressure from an increasingly environmentally conscious public will be equally immense. But empowered with the right data and tools at their fingertips, the people charged with undertaking such a monumental task will eventually see the ESG reporting mountain as a proverbial molehill in the end, all while helping their businesses become more efficient and sustainable.

Image credit: iStock.com/Juthamat Yamuangmorn