Tech Experts Taming the Wild West of Greenhouse Gas Emissions

The voluntary emissions reduction market is still the "Wild West" of corporate greenhouse gas target-setting, in software maker Autodesk's view. Companies are not held accountable for verifying or explaining the emissions they report, nor is there any central body monitoring whether they meet the emissions reduction promises that they make to their customers and their stock holders.

”With the scientific and policy trends pointing to increasing and unprecedented levels of consensus on the scale of global emissions reductions, corporate GHG reduction strategies remain non-transparent, non-standard and non-verifiable," write Emma Stewart, a sustainability program leader at Autodesk, and Aniruddha Deodhar, a sustainability project manager.

"A bit like the Wild West, the domain lacks law, scrutiny and is full of somewhat aimless shooting.”

Dan Vogel, CEO of carbon management software maker Enablon concurs.

“You have to manage your carbon units the same way you manage finance,” he told me. “You cannot manage what you don’t measure.” And too many companies are not measuring at all, or not measuring accurately and transparently, he says.

Both companies are working on solutions. In the case of Enablon, which first developed its software in 2004 for a major oil company, the solution also simulates the most cost-effective ways to minimize emissions, as well as develop and execute long term reduction plans.

Currently, most companies are only tracking emissions that are readily apparent, like those that come from energy use. But the bulk of emissions in manufacturing come from the supply-chain, Vogel says.

“Something that we need to be very careful of is that when you try to measure carbon, most of the time the carbon is not made within the company but outside the company,” he explains.

“Take a food company, for example. Generally the carbon emitted within the company is only 25% of the emissions. The majority of emissions are through agriculture, through suppliers, transportation, and then add the use of coal energy in China for packaging, for example. So 75% of the carbon is emitted in the supply chain.”

“Very often when a company says it is carbon neutral, it is within the company but it’s not neutral if you take into account Scope 3 emissions, those within the supply chain.”

Enablon's software is used by more than 250 global corporations and thousands of smaller companies, Vogel said, including one of the top three packaging companies and the world’s largest producer of sports apparel and foot wear — he declined to name names — both of which are tracking supply chain emissions.

For Autodesk, their C-FACT (Corporate Finance Approach to Climate-Stabilizing Targets) approach grew out of their own company’s desire to align corporate greenhouse gas emissions reduction targets with the Intergovernmental Panel on Climate Change's (IPCC) science-based recommendations for industrialized nations to reduce GHG emissions by 85% by 2050 in order to hold global warming to not more than 2 degrees Celsius.

The company wanted to use a methodology that was transparent — a big issue in the emissions tracking process, particularly if it is voluntary — and that could account for relative contribution to global GDP. it has made its system open-source and freely available to companies that want to use it for tracking purposes.

Climate Earth is also helping companies conduct carbon accounting that includes Scope 3 emissions, but rather than a software solution, it provides analysis.

“The world of carbon is so much more complex than a typical company is prepared to embrace,” says Frankie Ridolfi, director of marketing at Climate Earth, “but the emerging science and technology allows for much more sophisticated handling of the information.”

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