Emissions among digital companies rose by 8% between 2020 and 2022. Regardless, GHG emissions reporting by digital companies suffers increasingly from transparency issues. According to the GHG Protocol guidance, disclosing scope 2 location-based emissions is mandatory, while market-based emissions should only be included if applicable. However, some companies only report the generally lower market-based figure, which can be misleading as it does not accurately reflect their actual emissions from electricity consumption. Furthermore, as companies increasingly consider upstream and downstream emissions (scope 3), they sometimes shift emissions from one scope or category to another, hampering transparency and comparability.
Some digital companies have large supply chains with significant GHG emissions. Supply chain emissions generally far outnumber companies’ operational emissions. It is, therefore, crucial for companies to work with their supply chains to reduce emissions. Some companies already obligate suppliers to meet some type of environmental obligations, particularly for GHG emissions (e.g. reporting emissions inventories, moving to renewables, establishing an emissions reduction target).


Research Guidance:

Companies are expected to disclose GHG emissions across relevant scopes and emissions categories, considering the sectoral context in which the company operates and its activity profile.The following conditions must be evaluated in order to properly score this element:
- GHG emissions from companies are reported at least on an annual basis.
- The company describes how its GHG emissions were calculated. o for real economy companies, the company mentions the GHG accounting standards it used, e.g. ISO 14064-1 or GHG Protocol. o financial institutions outline the methodology for calculating scopes 1, 2, and 3 emissions (including financed GHG emissions) and total footprint. This should include
- The company discloses its operational GHG emissions (scopes 1 and 2) as separate categories.
- The company specifies whether its reported scope 2 emissions are location-based and/or market-based. Companies belonging to electricity-intensive sectors shall report location-based scope 2 emissions and may also report market-based emissions. Companies in these sectors shall also report scope 3 category 3 emissions, which are associated with their electricity use.
- The company discloses its value chain (scope 3) emissions per category for all relevant scope 3 categories\* and provides a relevant rationale for any excluded category. The relevance is identified in terms of the GHG emissions categories that most contribute to the overall profile of total GHG emissions in which the company sits.
- For sectors for which non-CO2 emissions are significant, the company must report the CO2 equivalent (CO2eq) for all relevant GHG emissions.
- The company has its GHG inventory independently certified.
- Avoided emissions and carbon credits should be reported separately.**Attributes required**: Full emissions inventory, methodology for calculating emissions, andindependent verification of emissions disclosure.