BOSTON—The call for global climate action today is urgent, and companies recognize the need to reduce their greenhouse gas emissions—not just for the planet, but for the benefit of their own business. And while accurately and comprehensively measuring emissions is crucial for identifying ways to reduce them, measurement remains a major roadblock—particularly for scope 3 (external) emissions. These are among the findings of the 2022 CO2 AI by BCG Carbon Emissions Survey being released today by Boston Consulting Group (BCG).
The survey continues and builds on the initial 2021 investigation into the progress that organizations around the world have made in measuring and reducing their carbon emissions. And while some progress has been made in the past year, it has been slow overall across industries and regions, with only 10% of companies measuring their emissions comprehensively (scope 1, 2, and 3) in 2022 vs. 9% in 2021. In addition, respondents estimate a 25% to 30% average error rate in their emissions measurements. And, while 92% of all emissions are external (scope 3) according to the Carbon Disclosure Project (CDP), only 12% of organizations surveyed consider scope 3 their top priority.
“These measurements are crucial to helping companies work towards their net-zero goals,” said Charlotte Degot, founder and global leader of CO2 AI by BCG. “And they need be supported by digital tools that help them achieve accuracy and comprehensiveness, which helps decision making for reduction.”
Reducing Emissions Adds Significant Benefits
The slow progress is notable, since this year’s edition reinforces the fact that the better a company measures its emissions, the more effectively it can reduce them—64% of respondents who measure the full scope of their emissions and 45% who partially measure them noted a significant reduction in those emissions. In terms of monetary value, more than 70% of respondents foresee at least $1 million in annual benefits from emissions reduction, with 37% calculating benefits as high as $100 million or more. Businesses report many additional benefits as well, with 54% noting an improved reputation, and 37% calling out the ability to attract top talent as pluses.
BCG surveyed more than 1,600 organizations, each with 1,000 employees or more and revenues ranging from approximately $100 million to over $10 billion—across 14 major industries and 18 countries. These organizations are, in aggregate, responsible for over 40% of global emissions.
Digital Solutions Are Required
Respondents believe more leadership support, better policy incentives (e.g., regulation, tax incentives) and adoption of digital solutions are required to accelerate emissions measurement and reduction. On the digital front in particular, organizations with automated solutions for emissions measurement, such as CO2 AI are 2.2 times more likely to measure emissions comprehensively and 1.9 times more likely to reduce emissions in line with their ambitions.
“The results of this year’s survey tell a clear story—the time has come to urgently accelerate progress in terms of the measurement and reduction of emissions,” said Hubertus Meinecke, global leader of BCG’s Climate & Sustainability practice. “Leaders need to demonstrate true convictions and a willingness to drive cultural changes—at both the company and governmental level, and organizations need to embrace the adoption of the digital and AI tools that are available to provide them with the most accurate and comprehensive measurement.”
A copy of the findings can be downloaded here.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or firstname.lastname@example.org.
BCG developed CO2 AI, which enables companies to master their organization's end-to-end net-zero journey. CO2 AI by BCG is an AI-powered solution that organizations from all industries can deploy to quantify current emissions—and find solutions to reduce them at scale. The solution enables exhaustive, accurate, and frequent quantification of emissions along a company’s full value chain, providing transparency and actionable recommendations to reduce their environmental footprint across scopes 1, 2, and 3.