Most Common Challenges in Carbon Emissions Reporting for Supply Chain Organisations

As sustainability continues to become more prevalent across the built environment, supply chain organisations are under increasing pressure to accurately report their carbon emissions to their clients. However, while the demand for this data grows, supply chain organisations face significant challenges in effectively reporting their emissions. In particular, three key obstacles stand out: a lack of data infrastructure, the absence of standardisation in reporting formats and insufficient carbon accounting expertise.

Lack of Data Infrastructure

One of the most significant hurdles supply chain organisations face in carbon emissions reporting is the lack of a robust data infrastructure. Accurately tracking carbon emissions requires extensive data collection, such as fuel consumption, electricity usage, and transportation logistics. Many organisations lack the internal infrastructure to proactively collect this data, and often scramble to gather the data upon receiving client requests, consuming vast amounts of resources and reducing their operational efficiency.

Without a centralised data management system, carbon-related information often remains siloed in different departments or in outdated formats like spreadsheets, rendering data difficult to compile and increasing the likelihood of reporting errors.

Lack of Standardisation

The lack of an industry-wide standard is another challenge supply chain organisations must overcome to accurately report their emissions. Clients, regulators, and stakeholders often request data in a wide variety of formats, making it difficult for suppliers and subcontractors to meet their obligations efficiently.

For instance, different clients may require reports based on a variety of carbon accounting frameworks, such as the Greenhouse Gas Protocol, ISO standards, or specific industry guidelines. Each framework may have its own set of metrics, calculation methods, and reporting intervals. As a result, supply chain organisations are left grappling with multiple requests for the same data formatted in different ways. This lack of standardisation leads to duplicated work, wasted resources, and frustration, hindering future data collection exercises.

Lack of Carbon Accounting Knowledge

Involving a range of specialised knowledge, from understanding the different scopes (Scope 1, 2, and 3) to calculating indirect emissions from upstream and downstream activities, carbon accounting is a complex field, and many supply chain organisations lack the expertise to report emissions accurately.

This gap in knowledge can lead to under- or over-reporting emissions, further complicating clients’ ability to assess their environmental impact accurately.

Additionally, supply chain organisations struggle to stay updated on evolving regulatory requirements and industry best practices, further hampering their ability to provide accurate reports. This knowledge deficit often necessitates hiring external consultants, which adds to the costs of compliance and reporting.

Conclusion:

As the demand for carbon emissions transparency increases, supply chain organisations must overcome significant challenges to provide accurate and consistent data. The lack of data infrastructure, the absence of standardised reporting formats, and the shortage of carbon accounting expertise all present formidable obstacles. However, addressing these challenges is crucial, not only for meeting client demands but also for fostering more sustainable supply chain practices.

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