Ready to report? How to prepare your business for greater carbon transparency
As society continues to grapple with how to effectively meet the global net-zero challenge, UK businesses are facing the arrival of new sustainability regulations. Designed to tighten reporting standards and stamp out greenwashing efforts, new regulations, including the Sustainability Disclosure Requirements (SDRs), are forcing business leaders to get serious about carbon transparency.
For those playing catch up, getting this right can feel a daunting process but the value of doing so goes beyond the obvious avoidance of penalties. Businesses that can effectively measure and communicate their emissions, also have the best opportunity to act efficiently to reduce their emissions, driving reputational benefits with key audiences.
However, Virgin Media O2 Business research has found that over half (51%) of UK businesses currently have gaps in their access to accurate carbon reporting information. Scope 3 emissions, the emissions an organisation is indirectly responsible for up and down its value chain, pose a particular challenge.
But there is help at hand. New tools like carbon calculators, for instance, can estimate the emissions of using certain tech solutions. The onus is on business leaders to work with supply chain partners to ensure the right tools are in place to enable companies to harness the power of reliable reporting.
Saying goodbye to greenwashing
While many businesses have built effective reporting methods in the past decade, those which are yet to act are now reaching a critical moment. Without an accurate method of measuring carbon emissions, businesses will fail to meet new standards, like SDRs, impacting their credibility and pull for consumers and investors.
Greenwashing and greenhushing, the practice of communicating limited information about ESG plans to avoid greenwashing accusations, will also be discouraged by reporting standards. Where discrepancies in commitments and actions may have previously gone under the radar, new regulations mean eager consumers and investors are now able to hold companies to account.
With this shift, trustworthy and verifiable carbon reporting of Scope 3 emissions has gone from a ‘nice to have’ to a requirement, with 85% of investors finding confidence in reliable reports. As 1 in 10 consumers make purchase decisions based on the availability of carbon footprint data, leaders must recognise that carbon reporting is now vital for businesses to support growth and maintain reputation with key stakeholders.
Getting access to reliable data
Accessing reliable data across all scopes of emissions is no easy feat. Executives handle data from all their own outputs, as well as those of their suppliers, each with different methods of reporting. For businesses to set themselves up for success, the key is to ensure uninterrupted access to data.
However, 40% of UK businesses currently have limited access to supplier data relating to the carbon impacts of their products and technology. To overcome this challenge, building relationships with existing supply chain partners is crucial. Executives must establish processes to ensure long term effectiveness and two-way sharing of accurate carbon data insights.
Similarly, executives can future proof their business through ensuring carbon reporting is guaranteed in future contracts. 90% of businesses value carbon transparency within their decision making when choosing products or technology for their company. So, having the upfront conversation with new supplier partners about data transparency should be expected and sets businesses up to succeed in the face of sustainability reporting.
Discovering the right tools
Whilst it is essential businesses conform to reporting standards, businesses should also be using trustworthy carbon reporting as an opportunity to seek out areas for progress.
Carbon calculators estimate emissions of a product or service and can provide clarity on a business’ areas for improvement. They are a vital tool for UK businesses looking to reduce their carbon emissions as they simplify reporting, especially within Scope 3.
For decision makers, this data can also become a tool for growth. By identifying high-emissions processes and taking effective steps to net-zero, businesses can demonstrate progress to both investors and consumers looking for sustainable products and investments.
Longer-term, effective reporting can also become a key selling point for businesses looking to work with new business customers or supply chain partners. Businesses that can demonstrate effective reporting will become increasingly attractive partners to companies facing the same sustainability requirements.
Growing sustainability credentials
As businesses prepare themselves for increasing reporting requirements, executives should look beyond the daunting nature of full transparency and consider the growth opportunity created by effective reporting.
With consumers and investors more concerned about the accuracy of carbon emissions data provided by businesses, reporting becomes an opportunity for businesses to show their efficacy and progress as society heads towards a lower-carbon future.
To succeed, businesses must develop effective communication with partners and confirm that the tools and processes are in place at all points of their supply chain. Ensuring new partners are committed to meeting the required reporting standards will help to guarantee future success.
So, while the prospect of increased carbon reporting can be a daunting task for UK businesses, it also presents an opportunity to grow as consumers, partners, and investors alike expect more transparency.
