Very few companies are currently capable of measuring their greenhouse gas (GHG) emissions, and major gaps remain in terms of measurement accuracy, according to a new study released by Boston Consulting Group (BCG). The report indicated very little progress on emissions measurement, despite the acknowledgement by companies of the significant benefits of decarbonization.

For the study, the 2022 CO2 AI by BCG Carbon Emissions Survey, BCG surveyed over 1,600 organizations with 1,000 or more employees and across a broad range of sectors and industries, and with revenues ranging from approximately $100 million to over $10 billion.

The report follows the release last year of BCG’s initial survey into the progress organizations are making             in measuring and reducing their carbon emissions. The 2021 study found that the greatest impediment for companies to achieving their climate goals is an inability to accurately measure emissions, with only 9% of respondents reporting that they are able to quantify their full Scope 1, 2 and 3 emissions.

The 2022 survey found only very minor progress has been made over the past year, with only 10% of respondents fully measuring Scopes 1, 2 and 3 emissions. Emissions measurement remains a key roadblock to reductions, according to the report, with the ability to measure tightly tied to decarbonization progress. The report found that 64% of respondents who measure the full scope of emissions reported significant emissions reductions, compared to only 45% of respondents who only partially measure internal Scope 1 and 2 and external Scope 3 emissions.

The survey also revealed that most organizations are primarily focused on Scope 1 and 2 emissions, with only 12% setting Scope 3 as the priority emissions reduction area. While Scope 3 emissions, which occur in value chain areas outside of companies’ direct control, such as supply chain or use of products, are typically the most difficult to measure and manage, they also make up the vast majority of most companies’ emissions impact, accounting for 92% of emissions overall.

Charlotte Degot, founder and global leader of CO2 AI by BCG, said:

“These measurements are crucial to helping companies work towards their net-zero goals. And they need be supported by digital tools that help them achieve accuracy and comprehensiveness, which helps decision making for reduction.”

The slow progress on emissions measurement persists despite the broad acknowledgement by companies of the benefits to reducing emissions. These include significant financial benefits, with over 70% of respondents foreseeing at least $1 million in annual benefits from emissions reductions, and more than a third anticipating over $100 million annually. Financial benefits expected overall included lower operating costs, expected by 54% of respondents, and increased revenues, by 43%.

Additional benefits to emissions reductions perceived by respondents included improved reputation, expected by 54%, and improved ability to attract talent, by 37%.

The survey did find some areas of improvement over the past year. While inaccuracy remains high, with respondents reporting an estimated average 25% – 30% error rate in their emissions measurement, the estimated error rate fell by 5 percentage points over last year’s survey. Additionally, maturity scores, measuring measurement exhaustiveness and accuracy, systematic target setting and emissions reductions improved for most sectors.

Respondents pointed to several factors that could help accelerate emissions measurement, including policy incentives including regulation and tax incentives, support from their organizations’ senior leadership, and adoption of digital solutions.

Hubertus Meinecke, global leader of BCG’s Climate & Sustainability practice, said:

“The results of this year’s survey tell a clear story—the time has come to urgently accelerate progress in terms of the measurement and reduction of emissions. Leaders need to demonstrate true convictions and a willingness to drive cultural changes—at both the company and governmental level, and organizations need to embrace the adoption of the digital and AI tools that are available to provide them with the most accurate and comprehensive measurement.”

Click here to access the BCG survey.