Energy and carbon emissions disclosure has come into the mainstream for most corporations. Many companies are now required to report energy data to comply with national regulations. Others voluntarily report - through initiatives such as the RE100 - to demonstrate their sustainability credentials to customers, employees, and other stakeholders.
Whether reporting is mandatory or voluntary, the energy data needs to be accurate and reliable. Once it’s in the public domain, there is no going back, and inaccurate data can impact brand reputation, put off investors, and result in a loss of trust in a company.
Why should you ensure high-quality energy emissions data
- Decision Making – Setting climate goals and taking action to meet those goals is reliant on high-quality data. Energy emissions data could be a determining factor in whether specific internal projects go ahead. If the data used to make decisions is inaccurate, the decisions will also likely be inaccurate.
- Investor Confidence – More money is flowing into Environmental, Social, and Governance (ESG) companies. In the US, sustainable investing strategies have grown from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020, increasing by 42%. Many investors now use sustainability reports and energy emissions information as a key factor when choosing investments. Significant errors or inaccuracies in reporting can reduce investor confidence and create doubts about other aspects of their business.
- Partner Confidence – Supply chain sustainability is coming into focus for many companies. For example, Starbucks have announced their intention to reduce supply chain emissions to create “green coffee” by 2030. This highlights that companies are taking a more critical view of their procurement options and not just considering the cost but also the sustainability of the companies that they partner with. If buyers doubt the credibility of a company’s emissions reporting, it could lead to loss of business for the reporting company.
- Customer Brand Image - For companies operating in the B2C space, achieving and maintaining a strong brand image is critical for long-term success. Companies recognise that sustainability is now an important component of brand image, giving rise to corporate renewable energy purchasing. However, there is a fine line between sustainability actions, such as renewable energy purchasing, and “green-washing”. High-quality and transparent energy data will allow businesses to confidently market their sustainability credentials - reducing the risk of “green-washing” accusations.
Data quality issues and how to fix them
There are number of different issues that affect energy data quality:
- Data Accuracy – This refers to how well the energy data reflects the underlying energy usage or production it’s trying to represent. In renewable energy reporting, data accuracy will be reliant on the employees interpretation and manipulation of the data. This is a risk, as humans are unfortunately prone to error. The risk of error is compounded when multiple energy managers from different countries are providing energy data to the central sustainability team.
What to do? Automate energy data collection. Removing humans from the data collection phase reduces the risk of human error in energy and emissions reporting. For example, use software that connects directly to renewable certificate issuing bodies rather than relying on manual energy certificate collection from energy suppliers.
- Data Consistency – When reporting emissions data for many different sites across countries, energy data will come in many different forms. For example, natural gas data could be provided in a range of different units e.g. kWh, Sm3, GJ etc. Correcting these differences and harmonising data can take a lot of time from central teams. .
What to do? Use analytics software to manipulate energy data to ensure consistency. Don't rely on manual conversion of energy to carbon emissions. Digital tools will help to ensure emissions data is converted correctly. For example, software can be used to connect to national energy emission factors databases providing up-to-date and reliable emission reporting data.
- Data Relevance – For global companies, there’s an enormous amount of energy data that needs to be aggregated to complete a sustainability report. Do you need hourly settlement metering data or are you fine simply having invoices manually read? Given the amount of time it can take to collect, analyse, and report on emissions data – any unnecessary data will be an additional burden to be filtered and cleaned.
What to do? Set out a framework for energy data collection. Specify where data is needed and share the framework with employees who will be providing or processing the data. Deprioritise efforts in non-relevant data collection.
- Data Granularity – To achieve high-levels of accuracy, data should be as granular as possible. For annual emissions reporting on grid electricity, companies could request annual kWh usage figures and energy certificates from their suppliers. In many cases, suppliers may be hesitant to provide granular data on renewable certificates which details information such as production type, time, and location.
What to do? Increase the granularity of data collection and analysis. For example, switch from manually requesting energy certificates from suppliers to automating the collection of certificates. This will provide buyers with more insight and transparent information on the real source of the energy certificate purchasing.
- Data Completeness – It will be difficult for any organization to have a complete energy data set for all of its sites. Data could be missing or some may not be available at all. If you have many sites in many countries, identifying data gaps can be a nightmare for central teams.
What to do? Companies can use digital tools that automatically flag missing data and try to reduce gaps when data becomes available. If data is missing, it should be disclosed and highlighted in emissions reporting.
A high-level of attention will be needed in all these areas to ensure that the data quality is of a high standard.
Software categories to manage energy and emissions data issues
Different software categories currently exist to solve energy and emissions challenges from different angles:
- Energy Management System (EMS) Software: This type of software has been common in the energy sector for many years to reduce energy costs. Typically local teams will input manually energy consumption data from utility invoices into an EMS software, which will consolidate the information globally for the central energy team. Some EMS solutions will automate the energy consumption data readings, either by digitally scanning the invoices or by installing new hardware devices onsite. This can then be converted to carbon emissions using the relevant carbon factors. In some cases, these softwares will also give insights over energy market prices and calculate energy costs. Invoice validation will be a potential module of that.
- Sustainability reporting software: This software is typically designed to generate automatic sustainability reports or the inputs needed for reporting standards such as CDP. This includes not only energy but also other elements such as waste or water. This type of software may rely on a mix of automated and manual inputs through third parties. Since they are not specialised in energy, they rarely have automated access to energy consumption data, production data or hourly grid mix data.
- Renewable energy monitoring software: Some softwares are specialised in the monitoring of the renewable energy progress of companies. This may include having an overview of the renewable energy contracts that a company has signed and it’s underlying costs: energy certificates, energy tariffs, PPA’s, and on-site generation assets. Given their level of specialization, they may also give insights over the exact renewable plants that are powering you, to understand your quality of “green”. Collection of more granular evidence for your Scope 2 emission reporting is one of the main focus of these tools.
FlexiDAO - a solution for credible energy & emissions reporting
Fixing energy quality issues has one key solution: collecting the data directly from the source without depending on human intermediaries. For the first time, this is now possible through companies such as FlexiDAO. It’s software has direct integrations with the entities that have the source of the energy and emissions data. Even though FlexiDAO is a renewable energy monitoring software, its data can be fed into companies’ existing energy management softwares or sustainability softwares. This is the most effective way to help companies become more confident in their energy emissions reporting.
Data quality is achieved in three ways:
- We automate the energy data collection.
Our software can collect data from a variety of different sources thanks to its direct integrations:
- Energy Certificates: Integrations with National Registries of Issuing bodies allow for automatic readings and audits of the energy certificates that have been cancelled by a supplier on behalf of an energy buyer
- Energy Consumption or Production settlement metering data: Integrations with National Data Hubs or DSO allow for automatic collection of hourly or 15min metering data. This can be then used for invoice validation or other use cases
- Energy Emissions Data sources: Integrations with ENTSO-E open data platform allow for accurate calculation of location based emissions based on grid mix
Automating energy data collection from these sources removes the risk of error involved in data handling and processing, providing a single source of truth. It also provides the user with the level data granularity they need, with data being provided right down to the hourly level, if required.
- We create consistency across renewable sources.
Companies procure renewable energy in a number of different ways. Any one company could source renewable power from a combination of onsite generation, PPA’s, green tariffs, and renewable certificates.
With so many different green power sources, it’s important to create consistency of output. Our solution can be linked to all different sources and provides the user with consistent aggregated energy and emissions data values.
- We simplify the verification process.
Today, in order to ensure credibility and accuracy of emissions reporting, companies use third-party verifiers. These audits are very expensive and typically based on samples. To check emissions for all sites would be extremely expensive, so companies accept a degree of inaccuracy through sampling.
Our software helps auditors to make this check automatically, providing them with the complete collection of the official Energy Attribute Certificates purchased by a company. Moreover, all data is registered in the blockchain, which acts as a digital notary that avoids the tampering of the data disclosed. Instead of making the audits on only a sample of certificates, companies and auditors have the possibility to audit our software directly. These benefits will ultimately serve to reduce the costs of annual sustainability reporting for a business.
Renewable energy purchasing and reporting is changing. Even though there are the basic minimum requirements to report zero energy emissions, sustainability leaders are going one step further and looking at the real environmental impact of their green energy. For that, they are starting to request information on the plant from which their energy was coming from - from which region and at what time.
It's likely that in the future regulations will not allow annual energy certificates to report zero energy emissions. Hourly energy certificates will be the only method to do this. The sooner companies get data transparency on their purchasing, the sooner they will prepare to avoid a huge carbon cost. Innovations such as FlexiDAO’s allow for the first time for a cost-effective, secure methodology to run 24/7 energy emissions accounting. The goal to democratise this practice and pursue a real, measurable impact at a global scale is finally possible.
To find more information on how we can help to increase the quality of your emissions data, please get in touch.