Precise data or estimates in your Scope 2-emission calculations? The importance of reliable data

When calculating your CO2-emissions, the quality and reliability of the final product largely depends on your data. Here you can learn more about the differences between precise data and estimates.

Danish version of this article: Faktiske data eller estimater i dit scope 2-regnskab? Vigtigheden af pålidelige data

Precise data means it is drawn directly from the actual consumption. Thus, it stands in contrast to estimates, which are calculations based on the estimated consumption.

When your company needs to work with your CO2 emissions, there are three levels to look at – Scope 1, 2, and 3.

• Scope 1: Direct emissions from sources owned or controlled by the company, including cars and other vehicles as well as facilities for local heat and energy production.
• Scope 2: Indirect emissions from electricity or district heating purchased and used by the company. This could be, for example, the heating of the office you rent.
• Scope 3: Other indirect emissions from the company's activities that arise from sources the company does not own or can control. This includes emissions related to the entire value chain - both "upstream", including emissions related to the supply chain, and "downstream", including emissions associated with the use and disposal of products.

Here we will focus on Scope 2. Data on Scope 2 emissions can be difficult to gather, as there may be gaps in the supplier's reporting. There can also be significant differences based on the time of day or year, which can affect the composition of energy sources used to produce electricity. The Scope 2 accounting becomes especially complex when your business is present in multiple locations. However, the complexity of the task should not stop businesses from calculating and working with their Scope 2 emissions. Therefore, we have had a talk with Alexander Tolstrup, CSO in og co-founder of Comundo, who specializes in calculating CO2-emissions, about why Scope 2 is important, and why actual data is crucial for the calculation of your carbon footprint. Comundo specializes within accounting for CO2-emissions for firms with multiple buildings.

Why is reliable data on Scope 2 emissions important?
Accurate scope 2 emissions data allow businesses to make informed decisions about reducing their emissions, setting sustainability goals and enable them to demonstrate corporate responsibility.

Accurate data also helps companies identify energy inefficient areas, and implement targeted strategies for cost savings, such as identifying properties that have high energy use due to inefficient insulation, or emission reduction initiatives, such as a net zero strategy.

Additionally, it also enables companies to communicate transparently with stakeholders, investors and customers, and stay ahead of expectations.

What does precise data on emissions offer that estimates do not?
Precise data can also help companies identify specific sources of emissions, measure their impact, and prioritise areas for emission reduction. Companies can act in real-time, forecast spend on energy, and make sure they stay on budget thanks to real-time prices.

This level of granularity allows for targeted initiatives that yield tangible results – fiscal and otherwise. It also enables companies to benchmark their performance against industry standards and competitors, fostering a culture of continuous improvement – something the industry very much needs.

What costs can firms incur from faulty data?
Inaccurate data can lead to inaccurate reporting, which can come with significant costs and consequences. It can lead to reputational damage and loss of trust among stakeholders, including customers, investors, and regulatory bodies, which may tarnish a company's brand image and impact its long-term viability.

If inaccurate data is used to create baselines and in strategies, e.g. energy optimisation, these baselines and strategies will be unreliable, at best. Once the, e.g. energy optimisation work has been executed, it might have to be repeated at significant cost – this time using accurate data to ensure effectiveness.

It can also lead to missed opportunities for cost savings and carbon reduction, all of which can have a negative financial impact on a company.

What does Comundo offer firms that want to start calculating their Scope 2 emissions?
You can’t manage what you can’t measure, and this is exactly what we help companies with. Without accurate data you can’t create reliable baselines, and without reliable baselines there is no way of knowing if your energy optimisation strategy or net zero strategy is working as effectively and efficiently as it should – and could.   

Comundo is a plug ‘n’ play carbon emission accounting solution that provides companies with accurate and real-time emission data on their buildings. We offer companies direct access to this data in an easy-to-use platform. There, they can dig into real-time emission data and real-time electricity prices, or simply generate a report whenever they need to in order to comply with their overall ESG reporting.

Further information:www.comundo.io