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Deloitte’s 2024 Sustainability Action Report sheds light on a critical gap in ESG reporting: only 15% of companies currently disclose their Scope 3 emissions, despite these emissions potentially accounting for up to 95% of a company’s total carbon footprint. This oversight represents a significant challenge for businesses aiming to implement effective carbon neutral strategies.
Scope 3 emissions, which arise from a company’s supply chain and other indirect sources, are notoriously difficult to measure and manage. Yet, as global regulatory landscapes evolve, companies can no longer afford to ignore these emissions. Deloitte’s report reveals that while 74% of companies disclose Scope 1 emissions, the vast majority are still struggling to track and report their Scope 3 emissions, creating a substantial blind spot in their sustainability efforts.
The report emphasizes that companies are increasingly prioritizing ESG reporting as a strategic objective. Nearly all companies surveyed have made progress towards sustainability goals, with 98% reporting some level of advancement in the past year. However, Deloitte warns that a “wait and see” approach could leave companies lagging as new regulations come into effect, particularly those that mandate Scope 3 emissions reporting.
The growing focus on ESG and carbon neutral strategies is not just about compliance but also about realizing tangible business benefits. Improved brand reputation, enhanced talent attraction, and the ability to implement pricing premiums are among the key outcomes companies anticipate from robust ESG reporting. As organizations continue to invest in sustainability, the integration of comprehensive ESG practices, including Scope 3 emissions reporting, will be crucial for achieving long-term success and maintaining competitiveness in the evolving market.
Sources:
https://sustainabilitymag.com/articles/deloitte-how-companies-are-progressing-in-sustainability
https://action.deloitte.com/insight/4080/trust-the-numbers-data-challenges-complicate-esg-reporting
