By Tom Anderton, Head of Customer Success at TEAM Energy.
The growing importance of greenhouse gas (GHG), sustainability, and the dependence on energy reporting makes it necessary to change to faster, more accurate data collection for precise, actionable reporting that can help all organisations achieve their net zero targets.
Traditionally, it has been hard to collect sustainability data and time-consuming to report on it. In most cases it still is. That’s because organisations have had to use manual approaches to report on their sustainability, which results in infrequent and potentially inaccurate or out-of-date estimations of the complex systems they report on. Too often an Excel spreadsheet carries the evidential burden prompting organisation-wide change that is supposed to help everyone reach net zero emissions in line with 1.5C of warming by 2050.
Without a change in data collection systems, organisations face the potential of reputational, legal, or market risk. Financial data, incentives, and sustainability information are now linked. Failure to report accurately and on time means stakeholders are unable to judge the legitimacy and effectiveness of their sustainability projects, while investors become restless as ESG requirements are not evidenced.
Organisations must move to near real-time data collection if they are to address the deficiencies in current manual approaches to gathering emissions information.
APIs key to data collection success
Sustainability reporting is hungry for data. What it consumes comes from a sweeping range of sources. Historically that data has been siloed in different systems and inaccessible other than by manual extraction, then input somewhere else. The infrequency means anything collected is quickly out-of-date and inaccurate.
Application programming interfaces (APIs) liberate that data from manual, siloed systems by automatically collecting and storing it in a centralised system. This helps overcome the silos created by slow and difficult collection methods. APIs effectively work as a call and response between two systems that previously couldn’t talk to one another. The process is automatic, near real-time, and helps to ensure the right data is in the right place at the right time.
Speed and accuracy reduce risks
Regulations change, sometimes faster than expected, requiring those responsible for sustainability reporting to respond accurately despite the ‘shifting goalposts’. Near real-time data collection helps organisations keep pace with any potential regulatory or reporting changes that happen, ensuring accuracy and agility.
In addition to changing regulations, near real-time data collection helps to hedge against many potential risks. For example, resource and financial risks, such as the efficiency of energy use and its costs, can be monitored closely, and having near real-time insight helps to mitigate them before they materialise into full-blown problems. This helps to tie sustainability data into the organisation’s wider strategy and operations.
Organisations can also closely monitor their wider strategies, including sustainability and net zero goals, by collecting near real-time data and tracking KPIs too. Having insight into their current performance, rather than an out-of-date months-old performance snapshot, presents an opportunity to monitor progress towards important milestones along the way to their strategic goals. This empowers decision makers to change tactics long before the organisation has failed to meet a goal and can help form narratives that appeal to investors and other stakeholders.
Dealing with supply chain data
Near real-time data collection that’s effectively outside of an organisation’s system boundaries is much harder to collect. For GHG emissions, this has become known as the problem of Scope 3 emissions because Scope 3 is everything up- and downstream in a supply chain.
Near real-time data can help to partially overcome this issue while setting the business apart from its competition. An organisation’s Scope 1 and 2 emissions, everything it does directly, are effectively its customer’s Scope 3 emissions. By getting better quality, near real-time data on its operations organisations can make their business more attractive to others with sustainability targets. Near real-time data collection within an organisation makes it easier for other organisations to report their data as part of their own supply chain.
In the long run, near real-time data supports competitiveness and business reputation, and lets organisations track progress towards carbon neutrality and net zero. The speed of data collection available now can overcome operational hurdles and give investors and stakeholders confidence. To find out more about near real-time sustainability data, explore TEAM Energy’s Sustainability Reporting Services.
