Around 60% of emissions are not captured in most companies' carbon calculation tools, according to Alexander Schmidt, head of science and climate research at emissions data and software provider, Normative.
Speaking at the CIPS Sustainable Procurement Summit, he said that for Scope 3 emissions, up to 90% of actual emissions could either be hidden or neglected by normal calculations, while true emission levels overall could be as much as 400% higher than traditional calculations suggest.
As a result of this, he said organisations urgently need to improve their data accuracy-gaps – or what he dubbed the supply chain’s “valley of death.”
Schmidt said: “Without accurate calculations and full disclosure, net-zero targets will be insufficient. Companies need to comprehensively cover all of their Scope one, two and three measures, and not leave anything out.”
To bridge the accuracy gap, he said businesses need to ensure they are conducting fully accurate and automated reviews of their carbon footprint, across all Scopes and supplier tiers.
“Starting out with simple spreadsheets and simple calculations is fine,” he said. “But it will not get you all the way to net zero. Companies must scale and automate their processes across operations, or they will spend hours fiddling with spreadsheets instead of actually reducing emissions.”
He said even though corporate carbon reduction goals are necessary, they need to be embedded into a more accurate reporting strategy, to avoid being regarded as “window dressing.”
In one full supply chain review Normative had undertaken with the Manufacturing Technology Centre, Schmidt revealed that its Scope 3 emissions were actually 410% higher than the company’s initial estimate/measurements.
“These emissions are there anyway, but you have to rip off the Band-Aid," he said. "The data challenge can be daunting, but you don’t have to do everything yourself. You can talk to others to help process the data, to ensure nothing falls through the cracks. This will help you understand your hotspots, what you need to focus on.”
A meta-study by Normative found there were 1,062 companies worldwide with credible emissions reduction targets which, if they were able to reach net zero, could decarbonise 77% of global industry.
Schmidt acknowledged this was significant, but warned in order to become truly net zero firms needed to consider the entire value chain.
Schmidt explained: “The largest companies have tens of thousands of suppliers. SMEs usually have quite short value chains, but they are numerous. We have to realise -nly by engaging with SMEs, only by engaging with the entire value chain can you actually follow through on reduction goals and net zero commitments.”