Reliable sustainability measurement and reporting is now on many boards’ agendas. An Australia-developed, configurable and auditable analytics platform could be the solution.
Directors have been warned their sustainability metrics must be robust or they risk penalties ahead of internationally aligned climate reporting for large Australian companies.
Rising demand for transparency in sustainability reporting from investors, the public, governments and shareholders — particularly in energy- intensive industries — this year prompted the Australian Treasury to propose that it would adopt International Sustainability Standards Board (ISSB) standards from 2024–25.
Industrial Sustainability Solutions’ (ISS) Founder and Managing Director John Vagenas said this would elevate sustainability reporting to be on par with financial reporting from mid–2024 for required organisations.
“Directors must understand their compliance obligations and minimise the associated risks,” he said. “When addressing their climate risk disclosures, if you don’t measure it accurately and have the reporting frameworks in place, you can’t improve it. Importantly, in order to justify the forward-looking statements, directors need to have confidence in their data quality. If they don’t have the data that addresses the risks then they could be personally liable.”
In addition to governance requirements in Australia, EU imports face additional costs for carbon-intensive products under the incoming Carbon Border Adjustment Mechanism (CBAM) from next year.
Directors have highlighted the challenge of accurate sustainability measurement and monitoring, with a global survey finding fewer than one out of 10 executives believed their organisation could assess their emissions comprehensively.
ISS has developed an auditable, configurable sustainability-analytics platform to track, measure, analyse and report industrial outputs accurately. The Sustainability Tracker software uses asset-wide data and complex modelling to simulate an industrial operation, creating a digital twin of its processes.
All inputs, including raw materials, energy, reagents, water and process chemistry, are included in an asset-wide mass and energy balance. The outputs are simple-to-read dashboards of emissions (scope 1, 2 and 3), water use, waste, nature metrics and circular economy indicators.
The Australia-devised solution, which evolved from process-optimisation software, has been used in nine countries, including at an industrial asset to identify and correct errors in their energy consumption. This saved US$1.5m annually in unused power costs and significantly reduced scope 2 emissions.
Vagenas said Sustainability Tracker integrated with existing systems and could be customised to the specific processes at the facility.
“It automatically centralises huge volumes of data from multiple sources across your operation and supply chain, and uses machine learning to validate and organise the measured and corrected data,” he said. “Using source data as inputs, the simulated data contextualises your measured activity data for completeness and accuracy. This means your verified sustainability indicators are fully traceable, immutable and unalterable, and surpass any rigorous audit tests for complete assurance.”
This article first appeared under the headline ‘Tracking Sustainability’ in the September 2023 issue of Company Director magazine.