Daniel Usifoh MSc, MCIPS, Co-founder, Gateway Procurement and AXIOM Sustainability Software
Addressing climate change through sustainability is one of the key business drivers in 2024 and beyond, with organisations in every industry – including energy management – under increasing pressure to transition towards more environmentally responsible practices.
Central to this transition is the concept of net zero – the balance between greenhouse gas emissions produced and removed from the atmosphere. However, achieving net zero isn’t just about setting ambitious targets; it means tracking your emissions all the way down.
One of the keys to that is Scope 3 emissions – they’re often given the least consideration due to their complex nature, but they make up 80% or more of the emissions for most businesses.
Challenges tracking emissions
One of the primary challenges businesses face on the road to net zero is the manual tracking of metrics associated with environmental, social, and governance (ESG) performance.
From carbon emissions to social impact indicators, gathering and analysing the data can be daunting, especially for organisations with complex operations. The difficulty is exacerbated for Scope 3 emissions, which typically account for over 80% of total emissions. These include emissions from purchased goods and services, employee commuting, and business travel, and are critical to ESG reporting. They’re also challenging to monitor and track.
Enter ESG reporting tools – digital solutions designed to streamline the process of data collection, analysis, and reporting related to ESG performance. By using automation and advanced analytics, these tools are a more efficient and effective way to manage a business’s sustainability efforts. And, crucially, pinpoint areas of high energy consumption that can be tackled.
Where manual processes are prone to human error and inconsistencies, ESG reporting tools allow energy management businesses to accurately track their environmental footprint, identify areas for improvement, and measure progress towards net zero targets.
At the heart of ESG reporting tools is their ability to simplify the complex task of sustainability reporting. By aggregating data from various sources and providing intuitive dashboards and analytics, these tools empower businesses to gain actionable insights into their ESG performance. From carbon emissions to water usage to diversity and inclusion metrics, energy organisations can now access a comprehensive view of their sustainability efforts, enabling informed decision-making and strategic planning.
Scope 3 emissions
ESG reporting tools are crucial in addressing the specific challenge of Scope 3 emissions. From initial calculation to ongoing monitoring and support, these tools allow businesses to engage directly with suppliers, identify emission hotspots within the supply chain, and implement targeted strategies for emission reduction. By integrating Scope 3 emissions into their sustainability initiatives, businesses can enhance their overall ESG performance and contribute significantly to the fight against climate change.
Identifying the low-hanging fruit is another area where ESG reporting tools excel. By analysing data trends and identifying areas with the greatest potential for impact, these tools help businesses prioritise their sustainability efforts. Whether it’s reducing energy consumption, improving waste management practices, or enhancing supplier diversity, ESG reporting tools provide actionable insights that enable organisations to focus their resources where they matter most. This targeted approach accelerates progress towards net zero and maximises the return on investment in sustainability initiatives. And crucially, it reduces wasted time and effort, which can be a real risk for all sustainability programmes.
ESG reporting tools provide transparency and accountability – critical factors in building trust with stakeholders, including investors, customers, and regulators. By openly disclosing their ESG performance data and goals, businesses demonstrate a commitment to responsible business practices and invite scrutiny from external parties. This transparency helps build credibility and fosters a culture of continuous improvement as companies strive to meet and exceed their sustainability targets.
Conclusion
ESG reporting tools are indispensable assets for energy management businesses on the journey towards net zero. By automating data collection, providing actionable insights, and addressing challenges such as Scope 3 emissions, these tools empower organisations to make informed decisions and drive meaningful change. As sustainability continues to move to the forefront of corporate agendas, investing in ESG reporting tools is not just a strategic advantage – it’s a pathway to a more sustainable future for all.
About the Author
Daniel is an experienced, senior-level sustainable procurement professional passionate about helping organisations in the Humber region and across the UK achieve their sustainability objectives.
He’s the Co-Founder of Axiom Sustainability Software. This innovative cloud-based platform helps businesses monitor, analyse, and improve sustainability performance in their organisations and throughout the supply chain.
ESG Reporting Software & Sustainability Tools | Axiom (axiom-sustainability.com)
This article appeared in the April 2024 issue of Energy Manager magazine. Subscribe here.