CFOs Drive Development Of Digital Carbon Strategies

CFOs Drive Development Of Digital Carbon Strategies

All around the world, net zero is becoming an increasingly loaded phrase. In most countries, significant investment is required – particularly in energy infrastructure – to drive down emissions. Existing grid infrastructures can cope with some level of added renewable energy generation, but its disparate and variable nature means most countries will need to invest major sums into their grid networks to support further renewables. This ultimately becomes a cost to the consumer and in many countries around the world, voters have not yet bought into the level of costs associated with decarbonizing at the rate required to meet net zero goals.

While there are currently some political challenges around net zero, 66% of Fortune 500 firms have a net zero commitment in place. Underlying that commitment is a growing slew of sub-national, national and super-national mandatory reporting requirements around carbon emissions. Most of these are based on the TCFD framework, which steers firms towards creating carbon reduction goals and demonstrating progress against carbon reduction goals.

Although a number of firms have previously reported carbon emissions to voluntary frameworks such as CDP, these new mandatory reporting requirements are putting far more scrutiny on the quality and completeness of those data. These new regulations draw in CFOs who will assume liability for errors and personally certify the accuracy of climate disclosures. This means that presenting carbon data in an amalgam of spreadsheets and other informal methods will not deliver the required auditability.

This is, therefore, pushing many organizations to invest in digital infrastructure and architecture to capture, report and manage carbon emissions in a more systematic and robust way. In so doing, businesses will want to ensure they create a scalable and robust digital architecture that can change with their firm’s ambitions and with the shifting and growing legislation. To do all of this in an effective way requires a digital strategy. Through working with dozens of clients, we have established a number of best practices for building such a strategy. If building a digital carbon strategy is a challenge for your firm, we would be delighted if you choose to join us for our webinar on Best Practices For Building A Net Zero Digital Strategy, where will be exploring this in more detail.

For more Verdantix research on this topic, please see Strategic Focus: The Net Zero Programme Governance Toolkit and Tech Roadmap: GHG Emissions Management, Removal And Reduction Technologies (2023).