EMEX 2024: Navigating the sustainability reporting landscape

Navigating the sustainability reporting landscape

It was great to connect with so many passionate individuals and organizations committed to decarbonization at EMEX 2024.  
 
The Trio team was delighted to facilitate a roundtable discussion, Navigating the sustainability reporting landscape, which proved a lively and interactive session across all tables.   

One of the key themes we noted was whether you are tackling corporate reporting or decarbonization - leadership awareness and data collection and quality remain key challenges for organizations.  

Below are some of our key takeaways from the event:

1. Corporate Shifts and Strategic Integration

• Companies are increasingly prioritizing a focus on environmental issues due to reputational, customer and competitive pressures. Social issues are still lagging.
• While mandatory reporting drives action, organisations will benefit from going beyond compliance to align sustainability with their strategic value.
• Setting targets such as those aligned with SBTi is becoming mainstream. However, executives often lack carbon and sustainability literacy, which can complicate the effective implementation of these frameworks. 

2. Scope 3 Emissions and Supply Chain Challenges

• Scope 3 emissions dominate corporate footprints, but collecting accurate and consistent data remains a significant hurdle. This is particularly challenging due to the lack of standardized data.
• Companies face difficulties in engaging suppliers who lack in their own sustainability strategies or data collection capabilities. Small suppliers show little willingness to engage, especially when faced with the complexity of Scope 3.
• The cost and complexity of Scope 3 reporting can be particularly burdensome for SMEs, which often lack the resources of larger corporations.
• Getting the data is the hardest part of CDP reporting. The lack of reliable, consistent data makes Scope 3 in particular a "nightmare" for many organizations, even those experienced in addressing their Scope 1 and 2 emissions.

3. Collaboration and Tools 

• Effective collaboration between sustainability and procurement teams is critical to progress in Scope 3. Companies face difficulties in engaging suppliers who lack their own sustainability strategies or data collection capabilities. Small suppliers show little willingness to engage, especially when faced with the complexity of Scope 3. 
• Tools like the Net Carbon Supplier Tool from Nottingham Trent University show promise in aiding data collection and target setting, though their applicability to other sectors is worth exploring. 
• Financial penalties in procurement contracts for non-compliance on sustainability are emerging as an effective mechanism.
• There is mounting stakeholder pressure, especially for institutions like universities, which are moving away from EACs due to a lack of additionality and are instead incentivized to build new PPA projects. 

4. Leadership Awareness and Education 

• Gaps in leadership understanding of key sustainability issues like net zero, science-based targets, and the Paris Agreement hinder progress.
• There is a lack of education among senior management about the importance and implementation of SBTi targets.
• Raising awareness and embedding sustainability knowledge across departments is crucial for long-term success. Without sufficient carbon literacy and sustainability awareness among executives, initiatives like SBTi become time-consuming and difficult to integrate into the wider business strategy.

5. Data Accuracy and Methodologies

• Evolving technology and methodologies are improving the quality of data, but challenges persist, especially in identifying reliable baselines and actionable insights. 
• Data accuracy improvements sometimes create a misleading sense of emissions reductions, highlighting the need for clear communication and metrics.

6. Practical Challenges and Opportunities

• Companies are balancing immediate "quick wins" with long-term strategic goals, often influenced by industry leaders.
• Circularity and sustainable procurement remain underprioritized within organizations unless they demonstrate clear business value.
• Annual reporting cycles are resource-intensive, and for some organizations, Scopes 1 and 2 reporting have led to a false sense of security.
• Scope 3 emissions reporting is often the most challenging, and companies are struggling to manage it without consistent data or clear guidelines. Additionally, executives may struggle with the time and effort needed to meet SBTi targets, which can result in slow progress. 

7. Competition and Peer Pressure

• Industry benchmarking and competition are driving many organizations to take bolder actions, though collaboration and shared standards could amplify these efforts.

Trio has a wealth of experience supporting clients with corporate reporting and decarbonization, in particular supply chain decarbonization. We would be very happy to share with you our approach and experience and discuss how we could support your company further. 

If you have any questions or would like to contact one of the subject matter experts, please reach out to Lisa Turner.