This article reflects my time as an Entrepreneur in Residence at Digital Dialogue Company Limited. I’ve been privileged to participate in the creation of an innovative business platform designed to tackle the pain points associated with fragmented carbon data analysis.

Our mission is to provide organisations with the predictive big data analytical tools they need to accurately quantify their carbon emissions, enabling stakeholders to develop effective ESG strategies for reducing their carbon footprints and transitioning towards renewable energy sources globally.

In an era where climate change poses an existential threat, accurately tracking carbon emissions has become paramount for businesses worldwide. Organisations are striving to understand and mitigate their environmental impact, yet fragmented data analysis continues to be a significant hurdle. Recognising this pressing challenge, Digital Dialogue Company Limited is developing a robust platform to revolutionise carbon emission accounting.

Understanding the role of GHG accounting

Greenhouse Gas (GHG) accounting is a critical component of the global carbon accounting system, providing a framework for measuring and managing emissions. This process involves quantifying emissions from various sources, including direct emissions from owned or controlled sources (Scope 1), indirect emissions from the generation of purchased electricity (Scope 2), and all other indirect emissions that occur in a company’s value chain (Scope 3). Accurate GHG accounting is essential for identifying emission hotspots, setting reduction targets, and tracking progress over time.

The imperative of accurate carbon accounting

Carbon accounting is a systematic approach to measuring and managing GHG emissions. Carbon accounting—a systematic approach to quantifying carbon emissions—is essential for organisations aiming to understand and mitigate their environmental impact.

It serves as the foundation for developing effective strategies to reduce carbon footprints. It is the foundation for organisations to identify emission hotspots, set reduction targets, and monitor progress over time. Despite its importance, carbon accounting faces significant challenges:

Data fragmentation: Emissions data often come from diverse sources and formats, leading to inconsistencies.
Scope 3 emissions complexity: Tracking indirect emissions across supply chains is intricately daunting. According to a Sphera Scope 3 Global Survey Report 2024, 59 per cent of companies struggle with external data quality, and 43 per cent find it challenging to quantify these emissions accurately.
Resource intensiveness: Collecting and standardising extensive data can be resource-heavy and time-consuming.

Rising emissions amid global goals

The annual Global Carbon Budget report projects that carbon dioxide emissions from fossil fuels will reach a record 37.4 billion metric tons in 2024—a 0.8 per cent increase from the previous year. When including emissions from land-use changes, total emissions are estimated to rise to 41.6 billion metric tons. This trend jeopardises global targets established by the 2015 Paris Agreement to limit global warming.

Also Read: As the demand for energy soars, climate tech is here to save the day

The role of big data and machine learning

To address the complexities of carbon accounting, integrating advanced technologies is essential:

Big data analytics: Harnessing vast volumes of data allows for real-time, auditable emissions tracking. Big data facilitates the development of robust carbon markets, projected to save an estimated US$250 billion annually by 2030 in climate action implementation.
Machine learning algorithms: These tools can identify patterns and drivers of carbon emissions, processing factors like economic activities, policy interventions, and external influences. For instance, machine learning models have outperformed traditional methods in predicting emissions in 254 Chinese cities from 2011 to 2020 (Scientific Reports volume 14, Article number: 23609).

This synergy between big data and machine learning enhances the precision and reliability of emissions data, contributing to more effective climate change mitigation strategies. The effectiveness of green finance hinges on high-quality emissions data. Accurate carbon accounting is crucial for building stakeholder trust and attracting green investments with best practices in reporting standards.

Green finance: Catalysing sustainable transition

Green finance plays a pivotal role in advancing renewable energy projects by providing essential funding mechanisms:

Green bonds: Effective in financing large-scale renewable projects in emerging markets, green bonds reduce reliance on fossil fuels. In E7 countries, these bonds have facilitated investments in solar, wind, and hydroelectric power.
Economic resilience: By encouraging environmentally friendly investments, green finance fosters new markets and job creation, contributing to financial stability.

By prioritising data sustainability, organisations can significantly improve the integrity of their carbon accounting processes. Ensuring that emissions data is accurate, reliable, and consistent over time allows businesses to make informed decisions to reduce their carbon footprints effectively. Robust data management practices and advanced analytics provide actionable insights, enabling companies to optimise their sustainability strategies and contribute meaningfully to global climate goals.

Enhancing data sustainability is critical for effective carbon accounting:

Accuracy and reliability: Implementing robust data management ensures that emissions calculations are consistent over time.
Advanced analytics: Leveraging analytics provides actionable insights, enabling companies to make informed decisions to reduce their carbon footprints.

By prioritising data sustainability, organisations can improve the integrity of their carbon accounting processes.

Driving change through transparency

Corporate climate disclosures are becoming both regulatory requirements and strategic tools:

Building trust: Transparent reporting of GHG emissions and reduction initiatives enhances reputation and stakeholder confidence.
Strategic alignment: Disclosures offer insights into climate-related risks and opportunities, allowing companies to align business strategies with global sustainability goals.

Also Read: Balancing economic growth and climate action: Decarbonising SEA’s built environment

At Digital Dialogue, we’re addressing the fragmentation in carbon emission data analysis by developing a platform that leverages:

Centralised data integration: Our platform consolidates data from various sources, providing a holistic emissions overview.
Advanced analytics and machine learning: We utilise these technologies to identify emission patterns, predict trends, and optimise reduction strategies.
User-friendly interface: The platform is designed for ease of use, enabling organisations to track and manage emissions effortlessly.
Regulatory compliance support: We ensure that companies meet international standards and best practices in GHG accounting.

Renewable energy: A beacon of hope and challenge

The International Energy Agency’s (IEA) Renewables 2024 Report offers a promising outlook, projecting a 2.7-fold increase in global renewable capacity by 2030. The significant growth is propelled by the cost-competitiveness of renewables and supportive policies in over 140 countries.

However, financial barriers, especially in developing nations, could impede the widespread adoption of renewable technologies.

Similarly, the UN Environment Programme’s Climate Technology Progress Report emphasises the need to triple renewable energy capacity and double energy efficiency by 2030. Achieving these ambitious goals requires overcoming significant challenges, including technology development and global transfer.

Overcoming the challenges of fragmented data in carbon emission accounting is crucial for achieving global sustainability goals. By harnessing big data and machine learning, we can significantly improve emissions tracking and reduction efforts.

At Digital Dialogue, our commitment is to empower organisations with Big Data tools and AI for Enterprise insights needed for this journey. Through innovation and collaboration, we aim to facilitate the transition to a low-carbon economy for the stakeholders and drive meaningful progress toward a sustainable future for the global industries.

—

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

Join us on Instagram, Facebook, X, and LinkedIn to stay connected.

Image courtesy of the author.

The post Bridging the carbon data gap: How predictive insights for data sustainability are revolutionising emission accounting appeared first on e27.