How do you benchmark and compare your scope 1, 2 and 3 emissions performance with your peers and competitors?

In ESG, the Environment, more specifically Energy, is the most important and focused parameter. All energy consumed directly or indirectly is measured & reported in Scope 1, Scope 2, & Scope 3. # Benchmarking offers a glimpse into your company’s position relative to others. It guides future strategies for reducing greenhouse gas emissions by pinpointing areas that need improvement. # A good benchmarking score can impact hiring, contracts, and investments. # Comparing your GHG reduction practices with peers will guide you to take appropriate actions. GHG reduction benchmarking empowers & guides organizations to shape future strategies.

Benchmark and compare scope 1, 2, and 3 emissions performance by utilizing standardized reporting frameworks like the GHG Protocol. Collect emissions data using consistent methodologies and metrics. Participate in industry-specific initiatives and platforms for peer comparison, such as CDP or industry associations. Analyze performance against sector benchmarks and industry averages. Engage in collaborative efforts to share best practices and learn from peers. Transparency and disclosure through sustainability reports enable stakeholders to assess performance relative to competitors. Regularly review and update emission reduction targets based on comparative analysis to drive continuous improvement and maintain competitiveness in the market.

Start by selecting metrics that align with your emissions intensity goals—like absolute emissions, emissions per output, revenue, or employee. Define emission boundaries, including/excluding factors like offsets or renewables, to accurately measure impact.

Benchmarking scope 1, 2, and 3 emissions involves collecting standardized data, utilizing industry benchmarks, and leveraging platforms like CDP or industry-specific sustainability indices. Compare emissions intensity, reduction targets, and strategies against peers using available benchmarks and industry reports. Engage in collaborative initiatives and industry networks to share best practices and benchmark performance. Continuous monitoring, transparent reporting, and participation in industry surveys help maintain alignment with evolving standards and ensure competitiveness. By understanding relative performance, companies can identify opportunities for improvement and demonstrate leadership in emissions reduction efforts.

Selecting the appropriate metrics for emissions benchmarking is crucial for accurate performance comparison, especially in industries focused on sustainability. Finland, as a leader in renewable energy adoption and carbon neutrality, offers valuable examples. Companies like Neste use emissions per unit of output to gauge efficiency in renewable fuel production, while other sectors, such as forestry, measure emissions per hectare of land, reflecting land-use impacts. The inclusion of renewable energy usage and exclusion of biogenic carbon emissions, as seen in Finland's bioeconomy policies, ensures metrics reflect true sustainability efforts. Adopting such tailored approaches is essential for meaningful emissions performance analysis.

Recently, rules about carbon removals for Scope 1 and 3 have been developed. "Land Sector and Removals Guidance" issued by the GHG Protocol is a key trend for this, and keeping a close eye on future developments will lead to better benchmarking and reporting.

Here are some other options for finding reliable data sources : 1-> Tools such as eGRID, EcoTransIT, and Cool Farm Tool that offer emissions data and calculators for specific sectors. 2-> Peer-to-peer networks and initiatives such as RE100 3-> Engaging third-party verifiers to gather and validate emissions data from your organization and others

Next, secure reliable data for benchmarking emissions. Utilize public databases like CDP, GRI, and SBTi, or sector-specific reports such as CDP sector briefings. Conduct independent research or verification for peer and competitor data.

In my view, finding reliable data sources is fundamental for accurate emissions benchmarking. Finland offers excellent examples of using robust and transparent sources. Finnish companies frequently report to international platforms like CDP and GRI, ensuring their emissions data is comparable globally. For instance, Fortum, a leading Finnish energy company, utilizes sector-specific reports to benchmark its carbon performance against peers. Additionally, Finland’s commitment to third-party verifications, such as the Science Based Targets initiative (SBTi), underscores the importance of verified data in maintaining credibility and accuracy in emissions reporting.

To benchmark and compare scope 1, 2, and 3 emissions performance, start by sourcing reliable data from reputable platforms like CDP, EDFI, GRI, or SBTi. These public databases aggregate emissions data globally. Leverage industry-specific reports like CDP sector briefings for sector-specific insights. Additionally, conduct independent research or employ third-party verification to ensure accuracy in gathering data from peers and competitors. A comprehensive approach to data collection from diverse sources allows for a robust evaluation of your emissions performance against industry standards, fostering transparency and informed sustainability strategies.

Obtaining third-party assurance is also effective to ensure transparency and reliability of benchmarking. Especially in Scope 3, receiving a third-party assurance is essential to prove that the calculation is not arbitrary, which helps appeal to its stakeholders for its legitimacy.

Adjust data for accurate benchmarking by normalizing reporting periods, currencies, and units. Estimate scope 3 data gaps using transparent methods, documenting assumptions for credibility and transparency.

To effectively benchmark and compare scope 1, 2, and 3 emissions performance with peers and competitors, it is crucial to adjust for variations. This involves normalizing data to address disparities in reporting periods, currencies, units, or methodologies. Additionally, it may require estimating or extrapolating data for scope 3 categories lacking disclosure from counterparts. Transparency and credibility are paramount; thus, documenting and justifying assumptions or calculations becomes imperative. This meticulous adjustment process ensures a fair and accurate comparative analysis, enabling organizations to assess their sustainability initiatives with a comprehensive understanding of contextual differences and data gaps.

Adjusting for differences and gaps in emissions data across companies is crucial for accurate benchmarking. Consider factors like company size, sector, and geographic location. Use intensity metrics, such as emissions per revenue or per unit of production, for fair comparisons. For example, a tech company might have lower direct emissions (Scope 1) but significant indirect emissions (Scope 2 and 3) due to energy-intensive data centers. The International Energy Agency reports that data centers accounted for about 1% of global electricity use. Look at reduction targets and achievements, such as a company reducing its Scope 1 emissions by 10% over five years, to gauge progress. Always seek out the latest data & methodologies for reporting

Enhancing Data Consistency: Addressing Variances in Emissions Benchmarking The third crucial step in emissions benchmarking is to address differences and gaps in the data. Normalize data to account for varying reporting periods, currencies, units, and methodologies. Estimate or extrapolate data for scope 3 categories that lack disclosure from peers and competitors. Document and justify all assumptions and calculations to maintain transparency and credibility. These adjustments ensure that benchmarking efforts are accurate and meaningful, supporting informed decision-making in your ESG strategy.

To benchmark and compare emissions performance, utilize charts, tables, or dashboards for visual representation. Present results across Scope 1, 2, and 3 emissions, employing various metrics. Augment data interpretation with narratives, stories, or case studies to showcase achievements, challenges, and improvement opportunities. Clearly articulate the purpose, scope, and limitations of benchmarking to provide context. Communicate how this analysis informs your emissions reduction strategy and targets, fostering transparency and accountability. Engage stakeholders through accessible mediums, ensuring a comprehensive understanding of your environmental impact and commitment to sustainability.

Analyzing and Presenting Emissions Benchmarking Results After benchmarking your emissions, the final step is to analyze and communicate results effectively. Utilize charts, tables, or dashboards to visualize and compare emissions performance across scopes and metrics. Supplement with narratives, stories, or case studies to illustrate achievements, challenges, and improvement opportunities. Clearly articulate the purpose, scope, and limitations of your benchmarking process, emphasizing how it informs your emissions reduction strategy and targets. This approach ensures stakeholders understand the data's significance and supports informed decision-making toward sustainable outcomes.

To benchmark carbon emissions across scope 1, scope 2, and scope 3, two key recommendations are to: 1. Utilize a carbon management software that offers this service. 2. Participate in an alliance or pledge that includes other companies, providing a supportive network to help gather the necessary data.

La comptabilité carbone est avant tout un outil de pilotage de l'entreprise. Les méthodes et choix réalisés par les entreprises de chaque industries sont encore trop diverses pour avoir une grande pertinence à comparer des CCF. La tendance va cependant dans cette direction avec des réglementation qui poussent à la standardisation des méthodes utilisées, ce qui rendra cette donnée carbone d'autant plus importante et permettra à une d'entreprise de savoir où elle en est par rapport à ses pairs.