Average of 3.5 different ESG reporting frameworks in use

Mobilityways also explored which ESG reporting frameworks these large companies were using and found that on average they had used 3.5 different ESG reporting frameworks each. However, opinions on which framework was best varied according to the sector they were in. For example, the financial services firms judged the Sustainability Accounting Standards Board (SASB) ESG guidance framework ‘the most useful’ for them: a quarter (26 per cent) of financial services firms favoured SASB over others they’ve used. Other sectors favoured different reporting frameworks.

Lack of reporting standardisation proves big concern

The lack of standardisation for weighting and measuring emissions performance, especially with regards to Scope 3, was the most significant concern with the environmental performance reporting systems firms were using, as clear evidence emerged of a spaghetti soup of different ESG reporting frameworks, standards and sector certification systems being applied across many large organisations.

56 per cent of 1000+ employee firms cited this lack of standardisation for Scope 3 reporting as a top concern. While just over half (52 per cent) of these largest firms were having difficulties turning all the emissions data into actionable insights, admitting ‘we don’t really know the story behind the numbers’ yet.

Data accuracy still a concern, especially for supply chain data

Just under half (49 per cent) of large companies expressed concern about the accuracy of existing environmental performance scoring and ratings systems they were using. Meanwhile, 47 per cent recorded ‘gaps in provision of our (own) organisation’s and (their) suppliers’ environmental performance records’.

Scope 1 & 2 benchmarking possible for two thirds of large firms

Nearly two thirds (65 per cent) of 1,000+ employee firms were able to compare their Scope 1 and 2 reports with a sector average for key factors making up direct emissions. The construction and civil engineering sector respondents fared better still, with 72 per cent of this sector reporting they could run their numbers against construction sector averages by emission category to help assess their performance.

When drilling into large organisations that have already implemented Scope 1 and 2 reporting, it became clear that more than a third of these firms were not yet able to run peer group or sector benchmarking for key emissions categories. For example, 36 per cent of the largest firms already doing Scope 1 and 2 reporting admitted they could not benchmark their results associated with GHG Emissions Impact.

Fig 2. What employee commuting data do you currently collect?

Scope 3 benchmarking proving harder than Scope 1 & 2

In terms of Scope 3 benchmarking, it was clear that the 1,000+ employee companies were finding it much more difficult to check their performance against sector averages across all key factors than smaller firms with 501 to 1,000 employees.

For example, only 61 per cent of those largest companies were capable of comparing their employee commute emission results with sector averages. Meanwhile, amongst firms employing between 501 and 1,000 staff that had implemented Scope 3 reporting already, 79 per cent were already capable of benchmarking their emissions reduction performance for employee commuting.

There is still some reticence around addressing Scope 3 indirect emissions. Yet those firms that have begun to address this work head on are finding there are massive emissions reductions to be realised. Some authoritative studies have found Scope 3 emissions, in some large global organisations, can account for as much as 85 per cent of their total emissions.

Key takeaways

Mobilityways’ Road to Net Zero Study’s findings show that less than two thirds of the largest firms have begun implementing Scope 3 reporting, and those that have begun doing so are only about halfway through working out how to collect and evaluate all the data they need.

Settling on the right ESG reporting systems for both them and their value chains is also proving tricky, and many firms are using different reporting systems in parallel to suit the needs of different stakeholders they need to report to. They’re midway through a complex journey to gather the right data and report it in a universally comprehensive manner. No wonder some corporations’ annual ESG reports are already running to more than 100 pages!

We also found that sustainability chiefs calculated that, on average, they expected that 38 per cent of total emissions would be Scope 3 emissions. That looks like a significant underestimate based on a number of expert industry studies.

However, the key point remains that companies can reduce their Scope 3 emissions very rapidly by addressing Upstream Scope 3 categories such as employee commute emissions which are more in their control than many of their suppliers’ emissions reports.

The key is to start measuring what you can fast, thereby working out the scale of the emissions reduction opportunity for you, and then kick off initiatives to chip away at reductions in the categories you can affect. We can even help firms benchmark their employee commute performance against similar sized businesses in a given region of the UK for example.

We are conscious that in this summary of results we have not been able to spare the space to summarise some of the sector-specific findings. However, be assured the core Management Report has extensive sector-specific findings, especially for the healthcare and construction sectors which have their own dedicated chapters.

Please do get in touch if you would like to hear more about how Mobilityways is helping large organisations to reduce the carbon emissions of their commuters, particularly now that more workers are returning to their offices more regularly, as pandemic-linked work-from-home regimes are adjusted in favour of hybrid working arrangements.