According to a new study published by Boston Consulting Group, only a small number of businesses are currently capable of monitoring their greenhouse gas (GHG) emissions, and significant measurement gaps exist (BCG). Despite corporations' acknowledgment of the substantial advantages of decarbonization, the research demonstrated very little progress in emissions measurement.
For the 2022 CO2 AI by BCG Carbon Emissions Survey, BCG assessed more than 1,600 firms with 1,000 or more people and revenues ranging from around $100 million to more than $10 billion.
The report follows the release of BCG's initial survey on organizations' progress in measuring and reducing carbon emissions from the previous year. Only 9% of respondents indicated that they are able to quantify their total Scope 1, 2, and 3 emissions, according to the 2021 survey. This was deemed to be the most significant barrier to corporations reaching their climate targets.
Only ten percent of respondents fully measured Scopes 1, 2, and 3 emissions, according to a poll conducted in 2022. According to the report, emissions measurement remains a significant barrier to reductions, with the ability to measure closely connected to decarbonization efforts. 64% of respondents who measure the complete scope of emissions reported considerable emissions reductions, while only 45% of respondents who only partially measure internal Scope 1 and 2 and external Scope 3 emissions reported significant emissions reductions.
The poll also found that the majority of firms are primarily focused on Scope 1 and 2 emissions, with only 12% identifying Scope 3 as the most important area for reducing emissions. Scope 3 emissions, which occur in value chain areas outside of companies' direct control, such as the supply chain or product use, are typically the most difficult to measure and manage. However, they also account for the vast majority of most companies' emissions impact, comprising 92% of emissions overall.
CO2 AI by BCG's founder and global chief executive, Charlotte Degot, said:
"These measures are essential for assisting businesses in achieving their net-zero objectives. And they must be assisted by digital tools that enable them to attain precision and completeness, which facilitates reduction-related decision making."
Despite widespread recognition by businesses of the benefits of lowering emissions, progress on emissions measurement remains sluggish. These include substantial financial gains, with over 70% of respondents anticipating at least $1 million in yearly benefits from emission reductions and over a third anticipating over $100 million annually. 54% of respondents anticipated a reduction in operating expenses, while 43% anticipated an increase in revenue.
54% of respondents anticipated an improvement in reputation, and 37% anticipated an improvement in the ability to attract talent as a result of emission reductions.
Over the last year, the poll did discover some areas of improvement. While inaccuracy remains high, with respondents reporting an estimated average error rate of 25% - 30% in their emissions assessment, the estimated error rate has decreased by 5 percentage points from the previous study. In addition, maturity scores, exhaustiveness and accuracy of measurement, systematic target setting, and emission reductions increased for the majority of industries.
Several variables, such as legislative incentives such as legislation and tax incentives, support from their organizations' top leadership, and adoption of digital solutions, were cited by respondents as accelerating emissions measurement.
Hubertus Meinecke, the global head of BCG's Climate & Sustainability practice, said:
"The results of this year's survey are crystal clear: the time has come to accelerate progress in the monitoring and reduction of greenhouse gas emissions. Organizations must embrace the adoption of the digital and AI tools that are available to offer them the most accurate and comprehensive measurement. Leaders must demonstrate strong beliefs and a commitment to drive cultural change at both the company and government levels.