Report: There is a Dire Need for Universally-Accepted Emissions Data Framework for Supply Chains

(Credit: Pixabay)

by | Jun 9, 2020

(Credit: Pixabay)

Rocky Mountain Institute (RMI) today released a new report, “The Next Frontier of Carbon Accounting: A Unified Approach for Unlocking Systemic Change,” focused on the critical need for a universal framework that shows the greenhouse gas emissions embedded in the materials and goods we use each day.

The report notes that without insight into the climate impact of our everyday products, it is impossible for consumers to demand lower-carbon goods, and impossible to decarbonize the industrial sectors that are responsible for 40% of annual greenhouse gas emissions. This new report provides a pathway to a unified approach for carbon accounting that will create systemic change in how emissions are reported and acted on.

According to RMI, currently, there is no universally accepted way to know the emissions intensity of products or the materials that went into building them, making it a challenge to compare greenhouse gas emissions across companies and supply chains.

RMI’s analysis shows how accurate assessments of greenhouse gas (GHG) emissions along the supply chain (Scope 3 emissions) could help advance new, cleaner technologies and greener products by providing a way for makers of “green steel” and other decarbonized products to charge a premium for their environmental attributes.

Additionally, with full visibility of climate attributes such as carbon footprint along supply chains, consumers could demand materials that are built with less CO2, and investors would be better able to fund technologies that align decarbonization pathways.

Corporations are experiencing increasing pressure from consumers, investors, and policymakers to disclose both their direct GHG and supply chain emissions.

There are currently three main challenges to reporting Scope 3 emissions:

  • Disclosure platforms for materials have white spaces, with no sector-specific framework to align accounting across various materials and end-uses.
  • Scope 3 boundaries are not well defined for individual industries.
  • Disclosure is voluntary and results are often unverified.

Guidance documents for some specific sectors have been developed, but no methods exist that cover entire supply chains of materials. Furthermore, RMI notes that myriad reporting platforms are causing reporting fatigue for companies, driving demand for more consistency and comparability of reported data.

The report notes that establishing a universal GHG disclosure framework requires a cross-sector effort based on a few key design principles:

  • Leverage and build on existing efforts—do not “pile on” with yet another method.
  • Ensure that the needs of critical use cases are served.
  • Align GHG and financial accounting to ensure reliability and address the problem of distorted regional incentives (similar to capital flowing toward tax havens).
  • Provide supply-chain-specific guidance.

Mining and mineral processing companies are well positioned to take a leading role in driving harmonization in GHG accounting given their position as the backbone of industry, straddling several supply chains.

Although methods like life-cycle analysis and environmental product declarations exist, there is currently no consistency in data collection or reporting across methods, and no framework that spans the entire supply chain. RMI, together with MIT Sustainable Supply Chains, the Columbia Center on Sustainable Investment and the Payne Institute for Public Policy at the Colorado School of Mines, are working together as part of the Coalition on Materials Emissions Transparency (COMET). This effort aims to build a standard framework for measuring GHG emissions in materials.

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