The new Corporate Sustainability Reporting Directive (CSRD) proposed by the European Commission will require companies to report on their carbon emissions in Scopes 1, 2, and 3, meaning they will need to collect extensive data from suppliers and customers. This will make carbon accounting data business critical and require companies to design their own carbon accounting strategies. Data quality will be paramount, and industry averages will likely be insufficient. Consulting companies are gearing up to offer compliance guidance, and there are firms offering intelligent software and expert assistance in carbon accounting. The release of detailed standards in June will answer many questions about reporting requirements, but companies will need to prepare for obligations to demonstrate results. Carbon reporting will change the nature of business relationships, possibly resulting in new pressures and altering strategic supply chain sourcing decisions, product design, and unit costs. Importing companies in carbon-intensive industries will also be required to provide a full accounting of their embedded carbon in 2023 and may be subject to carbon trading and pricing in 2026. The European Green Deal addresses issues beyond carbon accounting, making preparing for this immense, multi-disciplinary transition critical to success in the years to come.
It is important that carbon credit schemes also benefit local communities.
The World Meteorological Organisation has stated that 193 countries have given unanimous backing to a scheme to monitor global greenhouse...