The Carbon accounting series
Blue is producing a series of reports on carbon accounting In partnership with
Report n°1: ‘The CSRD and European Sustainability Reporting’
Sustainability reporting among large EU undertakings has suffered from inconsistency due to varying standards, hindering investors' ability to assess climate-related financial risks effectively. In response, the EU introduced the Corporate SustainabilityReporting Directive (CSRD) to standardise carbon reporting and enhance transparency.
Effective as of January 2024, the CSRD gradually mandates reporting for different company types, expanding disclosure requirements to include carbon credits and external verification for data reliability. It will also extend to large non-EU undertakings operating in theEU market, albeit with separate standards.
The CSRD's phased implementation supports companies' readiness, with allowances for first-time reporters and addressing challenges related to acquiring Scope 3data. Our report analyses these changes, evaluating undertakings' preparedness based on data from over 1600 public companies, both within and outside the EU.While commendable for its broad scope, encompassing more companies than the previous NFRD, Blue project manager and Zenon Research analyst Georgia Eriksen identifies areas where the CSRD could have been more comprehensive and gone further.
Report n°2: ‘Carbon accounting: Confronting practical challenges’
Greenhouse gas accounting and reporting, more commonly known as carbon accounting, is a rapidly expanding market. It is predicted that carbon accounting software will grow at around 29% per year until reaching a value of $16.5 billion by 2028.
Public and private companies are under increasing pressure from a variety of stakeholders, including public authorities, consumers, suppliers, financial institutions, NGOs, the media and the general public, to reduce their carbon emissions, and carbon accounting is essential for establishing baselines, setting decarbonisation targets, making informed decisions and monitoring decarbonisation trajectories.
This new report reveals the current challenges and complexities of the carbon accounting landscape. Obstacles such as gaps in guidance and methodological divergence can compromise the fundamental principles of carbon accounting, namely accuracy, transparency, completeness, consistency and relevance. The flexibility offered by the GHG Protocol, while useful, has sometimes allowed approximations in the estimation of emissions, thereby compromising the credibility of the reports.
In her analysis, Blue project manager and Zenon Research analyst Georgia Eriksen shows how companies and standardisation bodies can work together to improve the transparency and effectiveness of carbon accounting practices. These improvements are essential if global decarbonisation targets are to be met.