Accelerating Decarbonization with Carbon Monitoring and Reporting Software

The need for accurate carbon reporting is paramount – and growing more urgent daily – and only digital solutions will offer the accuracy and speed required to provide it.

Companies are under enormous stakeholder and growing regulatory pressure to disclose their carbon emissions with more granularity. In time, this will become mandated through financial disclosure, so the fidelity of measurement and the verification of data around carbon emissions is only going to grow more important.

Without accurate and complete reporting, companies can’t effectively support quantitatively backed business cases for abatement strategies or effectively prove the impact and value of their decarbonization activities. New and upcoming disclosure rules and restrictions in the U.S. and the European Union will require companies to lock in on their strategies for tracking emissions.

In January 2024, the European Commission (EC) European Sustainability Reporting Standards (ESRS) went into effect, outlining the processes for environmental, social, and governance (ESG) disclosures. A Verdantix report on net zero strategies explains, “Although EC President Ursula von der Leyen called for a 25% reduction in reporting obligations for small and medium-sized enterprises (SMEs), large industrial organizations will have to tighten up their internal ESG data collection and reporting processes to meet the new standards.”

The same report notes that while the closest equivalent regulation in the U.S.– the proposed climate-related disclosure requirements from the Securities and Exchange Commission (SEC) – is still delayed, “U.S. firms are still anticipating an increase in ESG reporting requirements, with this issue emerging as the ‘number one’ priority in 2024 for 10% of US respondents and a ‘high’ priority for a further 32%.”

Right now, most of the carbon emissions reporting pressures are related to Scope 1 (i.e., direct) emissions. Most businesses have justifiable estimates of their carbon emissions in this area, which is good. But there’s a big ‘but’.

First, ‘an estimate’ is very rapidly going to become “not good enough,” both from a plant efficiency perspective and from the point of view of financial and investor stakeholders. Additionally, counterparties in developing carbon offset markets have a vested interest in the accuracy and credibility of the underlying emissions data.

Second, additional scope emissions will quickly follow, and this is not the case of “if” but “when.” Scope 2 (or indirect) emissions, where most businesses have far less insight than Scope 1, will add pressure on the relationship between companies and their energy providers.

Measuring enterprise-wide carbon emissions is currently an extremely manual process in most businesses. They lack the right systems infrastructure to pull data from OT and IT systems while also incorporating manual data inputs, leading to a data gap, both in terms of data quality and data processing.

According to the results of a emissions management survey conducted by GE Vernova and Reuters Events, 56% of respondents rely on spreadsheets to monitor their carbon emissions, a format notorious for inputting errors and being difficult to monitor in real-time.

Rather than a repeatable, scalable process for gathering, normalizing, condition, and analyzing carbon emissions data, businesses rely on a small team with a 50-tab Excel document performing the calculus themselves, putting it into a report and hoping for the best.

This is true on both a micro and macro level. For the reasons listed above, different enterprises have developed different methodologies for interpreting and presenting carbon emissions data. That makes comparisons between businesses extremely difficult, and even within the business reporting inaccuracies can lead to penalties or fines from governing bodies.

Businesses often only get figures on carbon emissions six to nine months after those emissions happened. And, even then, because of the manual nature of the collection and analysis there may well be disagreement over the accuracy of the data.

Both factors mean that carbon emissions data is highly retrospective, estimated and disconnected from decision-making at both an enterprise and operational level. The data simply doesn’t have the fidelity or resolution levels required to make holistic decisions like a price on carbon or a plan to reduce carbon emissions.

Digital transformation and integration can help businesses meet these challenges in several areas.

Digital solutions offer far more efficient and rigorous ways for companies to measure and manage carbon emissions. By building a robust, repeatable set of workflows and systems connected to digital carbon monitoring devices, businesses can automate a process that provides an audit trail for where data was pulled from, how it was conditioned, and what methodologies were employed to analyze it. Finally, this system can push that data back into a carbon emissions software system for abatement planning and reporting purposes.

Once such systems are in place, businesses will benefit both intrinsically and extrinsically. First, because the data can be pulled far more efficiently, it can be used in making operational decisions such as where to source your feedstock or how you optimize individual assets or the plant overall. Having a near real-time understanding of your carbon intensity will be increasingly important in gaining and maintaining competitive advantage as you maximize revenue potential at a plant and asset level.

Second, participation in either voluntary or compliance carbon markets is going to rely on a certain level of carbon emissions data fidelity. And, once in such markets, the more robust and timelier the methodology you use to provide carbon emissions reporting, the higher the premium you can charge because of your carbon removal or carbon avoidance projects.

Carbon management software is a critical component in planning for carbon abatement and devising impactful "what-if" scenarios. CERius™, a carbon emissions management software from GE Vernova’s Software business, is designed to assist energy companies in gauging their progress towards net-zero targets – linking carbon measurement and monitoring to strategy and operationalizing abatement activities.