Our thinking

Bring on climate (score) change

6 September, 2024

In what seems, at first, like rather shocking news, Deloitte has recently reported that almost half of FTSE 100 companies have restated their climate and sustainability scores this year. Around 50% of these were due to changes in data collection methodology and one third was due to errors. Generally, these related to greenhouse gas emission reporting and in large part their scope 3, or indirect emissions, such as business travel, for which the data is often approximated.

These climate and sustainability related metrics are increasingly fundamental to businesses, whether it is for clients, investors or even for sustainability-linked loans (where interest rates vary based on emissions). When you put this importance alongside the apparent unreliability of climate reporting and it might appear to be rather a sizeable issue.

And in many ways it is, but overall, we agree with Deloitte’s take that this is not only predictable, but maybe a good thing. Sustainability and climate reporting is at a stage of relative infancy, there is a high data requirement, and complex analysis can be needed to disentangle processes to understand exactly what emissions boundaries are. Thus, there needs to be some allowance for businesses to get it wrong, learn and develop processes for data collection and analysis. The fact that businesses are taking an interest, correcting inaccuracies and developing better methodologies is encouraging for the long-term accuracy of climate reporting and driving effective, data-driven business transformation.

If you need someone to talk to about starting or evolving sustainability or climate processes, drop us a line!

By Anna Heis