Seamless Carbon Data Management Key to Meeting Net Zero Goals

This Channel Futures contributed article was co-authored by Soumya Bhatt.

As the world works toward net zero carbon emissions by 2050 to reduce the negative potential consequences of climate change, the scope and scale of the effort required seem daunting. However, net zero by 2050 is possible, according to many experts, as long as organizations act swiftly on their emissions initiatives. Whether an organization is seeking to optimize existing carbon emissions reduction processes or is just starting to quantify their carbon emissions, accurate and holistic data management is the tool they all need.

The Role of Carbon Accounting in Net-Zero Strategies

Carbon accounting is a relatively new field that's already an essential tool in the fight against climate change. Carbon accounting allows businesses to calculate their carbon footprint, understand where their emissions come from, report their sustainability impact to governments and stakeholders, reduce and remove carbon emissions and build brand equity. It requires the collection and processing of carbon data, which must include both business data and emissions factors for accuracy. Business data describes business activities. It can cover spending by the company to vendors or activities by the company in terms of fuel and materials purchases.

Emissions factors associate greenhouse gas emissions with given units of business data. It's critical to embed this kind of emissions data in decision-making across a company's functions, and not only for regulatory compliance, although data shows that 45% of companies only use their data for reporting (PDF). The same research shows that more than half of organizations that leverage this data for decision-making accelerate their progress toward net zero goals.

Addressing Carbon Data Management Challenges

Before carbon data collection and analytics can take place, the organization needs leadership buy-in, net zero governance structures, and a data strategy as the foundation for bringing together all the relevant business data and associated emissions factors. Some of the most common issues businesses face in this regard are a lack of reliable, comprehensive data, high data-acquisition costs and the need for more frequent emissions measurements.

Solutions to these challenges start with extending existing data management platforms and processes to manage emissions data, while also providing or enhancing IT solutions and data capabilities for emissions management. In particular, data platform capabilities must be developed to industrialize the ingestion, storage and processing of emissions data, so it can be activated for decision making and progress toward net zero. In 2022, 60% of organizations said the lack of a platform (PDF) to consolidate emissions data from multiple sources was a key challenge to their net zero efforts.

Automating data ingestion from multiple internal and external sources can improve coverage, accuracy and detail while moving away from today's common manual data collection that's time-consuming and error prone. That automatically ingested data must feed into one data platform to provide a single source of emissions data truth.

In our experience, implementing this kind of platform and the supporting technology and processes requires careful planning and coordination across the entire organization. The implementation of these capabilities can be accelerated by leveraging pre-built solutions that turn environmental data insights into action. These solutions unify data from disparate sources into a single repository, to help you monitor and manage your organization's environmental impact and generate actionable insights.

For example, a global baked goods company based in Mexico wanted to meet ambitious net zero and zero waste goals and started manually collecting relevant data. It recognized it needed an automated, holistic view of its internal and supply chain carbon data for analysis and decision-making — a massive requirement covering more than 200 facilities in 33 countries and 54,000 global delivery routes.

The company adopted a comprehensive, cloud-based sustainability platform that follows a "record, report, reduce" model to unify, ingest, standardize, analyze, track and report its emissions data. It implemented it across its North American operations for Scope 1 and 2 emissions. The results of the pilot set the stage for the company to deploy the platform in its locations elsewhere in the world, as well as to automate the collection of Scope 3 supply chain emissions data to accelerate progress toward net zero and the company's other sustainability goals.

Planning for Effective Carbon Data Management

Because the need to reduce carbon emissions is so urgent and the data management requirements can be complex, it's important for organizations that aren't already leveraging automated business data and emissions factors to lay the groundwork carefully for those processes. That begins with the motivation to set and attain emissions reduction goals, benchmarks of current emissions and a strategy for data collection and analysis to identify areas for improvement.

Executing on carbon reduction KPIs also requires change management to help leaders and employees to embrace the improvements and the behavior changes they require, and to adopt a mindset of constantly looking for ways to reduce emissions further. When this becomes a cultural value within the organization and an ongoing process, companies will be in the best position to reach their net zero goals faster and more efficiently.

Leveraging Carbon Management Learnings for Other Sustainability Goals

Speed and efficiency matter because while keeping carbon out of the atmosphere is an urgent sustainability priority, it's not the only one. Organizations are also seeking ways to reduce waste and water usage, optimize their land use and protect biodiversity. An integrated platform approach for carbon data management creates a foundation that can drive meaningful progress on the most urgent organizational climate goals while also enabling long-term sustainability initiatives across these other critical areas.

The technologies and cultural mindset needed for carbon accounting lay the groundwork for organizations to make a measurable environmental impact across all facets of their business — resulting in greater sustainability faster, in a way that's quantifiable to internal stakeholders, potential investors, customers and regulators.

Soumya Bhatt is a global cloud solution architect working closely with Microsoft's largest global system integrator (GSI) partners to develop innovative solutions, drive sales pipelines and grow Azure consumption. She's been with Microsoft for more than three years. She is based out of New York. Connect with her on LinkedIn.