Sustainability and environmental, social, and governance (ESG) issues are having an increasing impact on how organisations operate. More businesses and investors are seeing sustainability as a strategic issue with major business risks and potential.
Sustainability initiatives have traditionally concentrated on investor relations, public relations, and corporate social responsibility. We are now entering a new era enabled by data-driven solutions for CO2 tracking and reporting.
Carbon tracking allows companies to calculate their carbon footprint in detail to disclose their sustainability initiatives and impact to governments and stakeholders, adopt carbon reduction and removal strategies, and build a stronger brand.
What’s in store for carbon tracking and expense management? Here’s an overview of best practices and future trends.
Best Practices in Carbon Tracking and Expense Management
Establishing Clear Emission Baselines
Creating baselines is a critical step that many businesses will need to take in the near future. It requires organisations to make a number of important choices around their sustainability objectives.
Emission baselines should be reliable, transparent, and straightforward. Note that the degree of baseline aggregation and standardisation might vary greatly. Baselines can be project-specific or apply to an entire sub-sector or sector (multi-project).
Project-specific baselines are the least aggregate sort of emission baselines since they assess emission reductions from a single project. Multi-project baselines aim to standardise emission levels or rates and are intended to be applicable to several projects of the same type.
Setting Realistic Reduction Targets
One of the most effective strategies to concentrate and express an organisation's focus on sustainability is to set emission reduction objectives. These are measurable goals that assist the company's purpose and sustainability strategy with a carbon tracking process and operational initiatives to decrease its environmental footprint.
An emissions target begins with a baseline year and then establishes an emissions reduction trajectory over time to achieve the emissions reduction objective in the target year.
Organisations need to ensure that their emission reduction objectives adhere to recognised carbon accounting and sustainability measurement standards. The best emission reduction goals strike a balance between ambition and feasibility.
Continuous Monitoring and Reporting
Regulators are only going to increase the pressure to monitor and report on CO2 in the future, urging companies to adopt tools and processes for continually measuring and reporting on their carbon emissions.
For example, the EU Emissions Trading System is the cornerstone of the EU's climate change strategy and its primary tool for cutting greenhouse gas emissions. The ETS compliance cycle refers to the yearly monitoring, reporting, and verification (MRV) method and its associated activities.
The EU ETS requires industrial facilities and aircraft operators to have an authorised monitoring plan for measuring and reporting yearly emissions. This plan is also necessary as part of the permit to operate for industrial projects. And operators must file an emissions report every year.
The Future of Carbon Tracking and Expense Management
Anticipated Regulatory Changes
Governments throughout Europe are implementing precise carbon emission rules, and these regulations may become more rigorous in the future. The Corporate Sustainability Reporting Directive (CSRD) in the EU is a good example of this, broadening the scope of reporting to over 50,000 organisations. They will all be obliged to disclose sustainability information in more detail than previously, as well as be audit-ready.
As the world advances towards a low-carbon future, carbon tracking will become much more important, especially with increasing stakeholder pressure from investors, customers, and lawmakers.
Companies that fail to reach their carbon emission objectives may suffer fines or other penalties. That is why tracking and reporting carbon emissions with high precision is becoming increasingly critical for organisations.
Advancements in Technology and Data Utilisation
CO2 monitoring needs to be comprehensive and accurate in order to be used strategically by organisations. This calls for software and technologies that automate the carbon tracking process, making it more efficient, accurate, and ready for processes such as expense report compliance.
The increasing use of software technologies such as AI and machine learning helps here, as they automate and streamline the process. More and more companies in Europe will implement software solutions that add a sustainability angle to key areas of business operations, such as expense management.
Shaping a Sustainable Business Landscape
As sustainability becomes more of a strategic and operational necessity, leaders must lead the way in establishing the proper sustainability organisation. Selecting which issues under the larger sustainability umbrella need to be addressed is just the first step.
The concerns span widely, from establishing new low-carbon teams and commercialising green products to environmental compliance and ESG reporting. Many organisations have grappled and will continue to grapple with the disparities between sustainability and other business challenges in the trade-offs involved as they mobilise to respond to expanding sustainability concerns.
Prepare for the future with Mobilexpense
Carbon tracking is positioned as a critical part of the transition to a low-carbon economy. Trends such as increased use of technology, greater transparency, and the need for more thorough and precise reporting will impact the future of this rapidly evolving field.
New software solutions are already helping organisations improve the accuracy and efficacy of carbon tracking, making it simpler for businesses to reduce carbon emissions and take action to combat climate change.
Our expense management solution helps to streamline the process of expense report compliance, ensuring that our customers can benefit from accurate data on their carbon footprint.
Using our solution, organisations can remain compliant and eco-conscious thanks to advanced CO2 emissions tracking for mileage expenses.
They can calculate emissions data based on specific vehicle models and exact mileages. After an employee enters their license plate number, our solution takes over. Users can save time and avoid errors thanks to prefilling and syncing license plates, ensuring that the carbon emissions data is as accurate as possible.
Compliance is made simple thanks to detailed reports, and teams can easily share data in a CSV export that covers any period of time, ensuring that the organisation has the data it needs available right away.
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