Microsoft’s Kadri Umay cited the GHGProtocol as a reference for reporting Scope 3, emissions, those that ‘company is responsible for outside of its own walls’. Scope 3 makes up the overwhelming majority (98%) of Microsoft’s emissions and the company is committed to halving these by 2030. Likewise Schlumberger’s sope 3 emissions amount to 96% of its total and a 30% cut is announced for 2030. Umay observed that Scope 3 emissions are very hard to calculate, ‘your suppliers’ scope 1 - 2 are your scope 3, and they are already reporting it’. There are also challenges with the calculation and reporting of GHG emissions. Umay cited The Carbon Call organization which reported that ‘Today, carbon accounting suffers from data quality issues, measurement and reporting inconsistencies, siloed platforms, and infrastructure challenges [ which ] makes it difficult to compare, combine and share reliable data, particularly for companies’.Enter the Microsoft Cloud for Sustainability that promises ‘automated calculation of Scope 3’. MCS can connect to some 50 data sources from Word through JSON to SalesForce and offers dashboards, scorecards and reports to drill down, in incredible detail, to emissions factors for different fuels and vehicles.
The PIDX ETDX emissions transparency data exchange group has spent a couple of years looking into this problem with industry partners (Baker Hughes, BP, Chevron, ConocoPhillips Halliburton, Shell and Schlumberger) with the intent of developing standards for exchange of carbon emissions and other energy transition requirements that needs to be harmonized across industry participants. ETDX is working with industry and other bodies including the UN, the CDP (Carbon disclosure project) and The Open Group’s Open Footprint Forum which is operating in a similar space. ETDX is exploring how the existing PIDX schemas could be extended to support the transfer of emissions data from supplier to operator, and vice versa, leveraging PIDX downstream code tables and the definitions and UNSPSC mappings in the Petroleum Industry Data Dictionary.
Umay presented a use case involving the supply and use of drill bits
to show the interaction between different contracts for supply,
shipping and drilling and how the related emissions are divvied-up
between the parties, passing emissions data by part serial number to
the operator as an invoice line-item. Umay wound up returning to the
MCS to show how the intricate calculations of emissions associated with
the use of Microsoft’s Azure cloud computing resources take account of
manufacture, packaging, transportation, use, and end of life hardware
phases in Microsoft-owned and leased data centers. The methodology is
presented in a Microsoft White Paper on Azure Scope 3 Emissions.
Comment : Alongside the difficulty of accurately defining what emissions fall into who’s scopes, the exercise appears to involve easily as much data collecting and reporting as is involved in financial accounting. While there is a certain logic to this, it is hard to see companies throwing the requisite resources into this magnificent box-ticking exercise, or whether a regulator will ever be in a position to provide a similar audit effort.
Chris Welch from OFS Portal reprised some of the Scope 3 definitions and showed how they can fit with PIDX supply chain message orchestration. The ETDX is extending the PIDD with greenhouse gas attributes for product cradle-to-grave emissions, operations and measurement uncertainty. Emissions numbers are represented in an extended PIDX XML format as <PIDX:EmissionsData>, embedding information on kilograms of CO2 equivalent in an electronic invoice. The idea is to move from sustainability reporting that uses industry averages to detailed line by line emissions reporting. As reporting shifts from calculation to measurement this will bring more granularity and presumably a correspondingly huge increase in data to report and manage. Welch proposed a division of labors between OFF and PIDX with the former responsible for defining reporting data standards and the latter for a data exchange standard.
John Service (PwC) stated that a ‘carbon ledger’ is required to ensure high quality reporting and proposed a data model for a single source of the truth. This would enable informed decisions with a transparent view of carbon related data such that companies can ‘navigate evolving carbon regulations with the same level of accuracy and transparency a seen in financial disclosures’. This will enable companies to achieve decarbonization targets with auditable data and to defend against claims of greenwashing. Accurately quantified carbon-associated costs can be attributed to the correct cost center, and carbon data can be shared with key stakeholders to support their net zero agendas
Today, carbon data is siloed in disparate systems that make it difficult to have an overview. Data is ‘divorced’ from the core infrastructure and architecture that companies use to manage their business*. Moreover they lack the ‘transparency and actionability needed to remove carbon emissions from products, operations and value chains’. A robust data model is key to a working carbon ledger but who is to build the carbon data model? For Service it has to be the Open Footprint Forum (OFP), an Open Group backed cross-industry collaboration to create a common data standard for carbon-related information and a set of standards for data collection and management across all industries.
* A questionable claim as a google for SAP ESG might suggest.
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