Some of the largest manufacturers in the UK are currently required to report on their Scope 1 and 2 emissions annually in line with the government’s Streamlined Energy and Carbon Reporting framework (SECR). However, capturing and reporting on Scope 3 emissions remains largely voluntary. With stricter reporting standards expected in the next few years, there is a distinct risk that UK businesses are not fully prepared. Significant improvements are therefore needed to improve the accuracy, accountability, and reporting across Scope 3 emissions.
Paul Bansil, Director, KBR Consulting International, explores the current challenges manufacturers face in capturing carbon emissions data, and discusses the possibilities for a more robust and comprehensive way to both calculate emissions and identify how to reduce them.
Navigating the complexities of capturing carbon emissions data
Accurately capturing carbon emissions data remains a challenge for businesses, not least because the absence of a definitive model has led to inconsistent data collection and makes industry comparisons difficult. Furthermore, variances in standards – such as between the GHG Protocol and US GAAP – often necessitate external expertise to ensure accuracy. Data collection, particularly concerning indirect emissions from supply chains, is also difficult to attribute.
As a result, industry efforts have all too often been patchy and lacking in the right standards of accuracy and detail. They have focused on several common fallbacks that include adopting qualitative tactics, which use a non-numerical approach and subjective data, or even relying on carbon offsetting schemes – the validity and effectiveness of which are yet to be conclusively proven.
Whilst qualitative methods should not be entirely disregarded, there is a clear need for a more verifiable data-led reporting approach that’s based on analytics and mathematical techniques. This will help to increase transparency as regulations become stricter and offer significant advantages in how businesses can identify where emission reductions can be made. After all, with higher quality data we can make more precise, more appropriate decisions more swiftly.
Decarbonizing energy projects: a five-step approach to data analysis
Achieving this demands a more developed structure in terms of the type of data required and how it is to be analyzed. This is something we have been working on as a cornerstone of how KBR can help to raise the bar in the reporting and analysis of carbon emissions, resulting in the following five-step approach:
Hindsight – what has happened
Descriptive analytics, like reviewing a company’s past consumption, offers a historical perspective on emissions and enables organizations to set a benchmark. With this in place a company can then strive for reduced emissions in future energy projects.
Oversight – why has it happened
Understanding the past is just the first step. Companies must also be clear on the wider scope of specific emission levels. Diagnostic analytics can play a significant role in this. Leveraging data sources and utilizing graphical visualizations provides clarity on trends and patterns.
Foresight – what will happen
Predictive analytics, enhanced by machine learning, can highlight possible future outcomes and can be used to show the environmental impact should a current project design come to fruition. McKinsey & Company have often emphasized that the design phase is a determining element in the final emissions of any venture. Armed with this foresight, companies can weigh the repercussions of continuing with their current project blueprints.
Insight – what should be done
It’s important to pinpoint what the actionable insights are. Prescriptive analytics are useful here enabling professionals to refine project designs to minimize carbon footprint. By utilizing simulations and providing suggestions, it paves the way for robust decarbonization strategies.
Right sight – ‘what if?’
As with all science, it’s essential to explore alternatives. Cognitive analytics – the final level of data analytics – allows companies to explore ‘what if’ scenarios. Such exploratory thinking can foster better understanding to inform operational decision and guide companies to adopt more sustainable, low-carbon energy solutions.
Being able to accurately analyze the different levels and sources of data, from descriptive through to cognitive, however, requires tools, software and a proven methodology to become universally accepted.
KBR has invested in the development of technologies to accurately report on emissions as well as designing bespoke solutions to gather and analyze lifecycle data on carbon emissions and act as a vital tool in enabling businesses to make better informed decisions on how these can be reduced.
The future of emission reporting
The extent of emissions reporting and declarations required from organizations is rapidly growing and evolving. The impending deadline for large UK organizations to report on Scope 3 emissions and the significant financial and reputational risks if they fail to do so, will undoubtedly drive improvements in the accuracy, accountability, and reporting of emissions. The manufacturing industry must therefore find a better standard in carbon calculation and analysis to meet these demands, and more sophisticated use of data will be at the heart of this. Without this we will not be able to accurately figure out what emissions are being produced by a given project or asset, nor will we be able to most effectively identify where improvements can be made.
Using a data-driven solution is a positive step in the right direction and will enable manufacturers to build a more accurate account of the full lifecycle across all three greenhouse gas reporting scopes.
Paul Bansil is Director, KBR Consulting International. KBR delivers science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 28,000 people performing diverse, complex and mission-critical roles in 34 countries. KBR works with customers across the globe to provide technology, value-added services, and long-term operations and maintenance services to ensure consistent delivery with predictable results.