A new research partnership aims to clarify best practices and help industry come to grips with disclosing Scope 3 GHG emissions.
Unease and a sense of mistrust are growing around the consistency of data used to report carbon emissions and quantify the changes made by companies, industries, and countries. As a result, genuine changes for the better may not be acknowledged and emulated, while changes for the worse, which are bound to happen, may be taken for granted or misunderstood. How can a coalition of organizations bent on improving outcomes, such as Google, Baker Hughes, and academic institutes help lay the groundwork for reliable reporting of emissions that enable better decision making, and which are comparable across the economic spectrum?
The plan for such a research partnership got a kickstart from a paper written in 2020, by Jordy Lee, a graduate of the Colorado School of Mines in the US and now Program Manager of the affiliated Payne Institute for Public Policy. In , Lee examined and compared existing methodologies and examples of reporting from BHP, Freeport McMoRan, and Vale, three mining majors in the copper supply chain. This one metal has properties such as malleability, and electricity and heat conductivity that have embedded it with every industry from communications to renewable energy. Although focused on copper, Lee’s work highlighted “the incomplete and variable nature of environmental and climate reporting within the mining industry”, and organizations reliant on the resources industry to deliver their own products and services took note.
At the Columbia Center on Sustainable Investment Perrine Toledano, Head of Mining and Energy at the Columbia Center, says that over the past couple of years she and her colleagues kept meeting other players at various climate events, and collectively recognizing that “There is not enough research and evidence to show what good carbon accounting is all about. There’s no one to say, ‘This is too high level and leaves a lot of room for interpretation by companies.’” This led the Columbia Center on Sustainable Investment and the Payne Institute for Public Policy to help form the Coalition on Materials Emissions Transparency – a partnership that enables the sharing of research between institutions as they advance carbon accounting discussions. 
At the same time, the impetus toward joining forces also started in companies such as Baker Hughes, realizing that its thousands of suppliers are not bound by any common standards or methodologies of reporting emissions, which could ultimately render its own emissions reporting inaccurate. ‘’There’s a growing body of research on climate feedback loops,” says Allyson Book, VP of Energy Transition at Baker Hughes. ‘’And energy organizations must prepare to spend as much intelligence and dedicated research quantifying the greenhouse gases they embedded in their value chain, so that they can work on ways to reduce or capture and permanently sequester them.’’ 
Challenges to accurate reporting on decarbonization have been simultaneously igniting in academia, at conferences, and in boardrooms, even as investors clamor for disclosure. It is important for Baker Hughes to understand the material and mineral emissions from its supply chain, to continue to ensure transparent reporting and enable its own path to net-zero.
At Google, which has already achieved net-zero in terms of carbon emissions from its energy consumption, Krisha Tracy, Sustainability and Risk Management Solution Manager for Supply Chain & Logistics, says that one of the technology giant’s emissions reporting challenges is around Scope 3, similar to “the same challenges that Baker Hughes is up against”. Google uses copper “In our data centers, chips, Chromebook laptops, Nest devices, Pixel phones, …etc.,” says Tracy. But the emissions and other environmental metrics provided by copper mines and metal processing facilities vary widely from one another, making copper Scope 3 reporting highly variable with low confidence.
“We had a conversation with the Baker Hughes team covering the challenges of life cycle assessment metrics— the greenhouse gas emissions associated with materials entering into the supply chain have such a large margin of error, that companies across all industries have little to no confidence in the reported metrics,” says Tracy.
A nuanced and diverse cohort
The complexity of Baker Hughes’ and Google’s supply chains makes them rich sources of information for academia. And academia, which is dedicated to objectivity, makes the ideal director of investigations and in this case a scientific filter of data quality and relevance. Lee’s preliminary paper identified the Payne Institute and the Colorado School of Mines as a natural choice to help the two corporations clean up and clarify their metals and minerals data. And the Columbia Center on Sustainable Investment brought legal, economic, and investability filters to the group’s investigations.
Working with real examples and perspectives from as many different industries as possible will produce better information from this likely world-first research, says Morgan Bazilian, Director of the . He hopes that an oil and gas major and a financial organization, with their different challenges and motivations, will also join the coalition investigating “Elements and Outcomes”.
“Elements” refers to metals and minerals in industry supply chains, and the study will commence by focusing on widely used copper.
Bazilian says the initial exploratory phase of the two-year study is devoted to identifying the right questions to ask: “Where is the confusion? Where are the challenges?”
Supply chain mapping for key industries, partners, and materials will identify emissions-intensive steps in the extraction and processing of copper. Tracy says a resource-specific focus is important: “We need to get down to what needs to be measured and what are the realistic measurements and standards for a copper mine — not a nickel mine, but a copper mine — because the emissions and ESG metrics associated with extracting and processing copper are very different from those associated with nickel, or lithium, and so on.”
Mapping the data wilderness
As part of supply chain mapping, the study will also identify and seek to formalize what steps need to be recorded and published to provide the best possible comparison between companies, suppliers, and materials.
A loose-but-integrated division of expertise will see the Payne Institute and Colorado School of Mines dig deep into emissions data generated around resource extraction and processing. The goal is to understand where the values are coming from, how they’re calculated, how frequently they’re updated, and whether there is perhaps a better way of measuring and updating that would improve the accuracy and transparency of emissions factor data sets.
The Columbia Center on Sustainable Investment will, among other factors, contribute “comparative work on the accounting methods used for different materials”, says Toledano, who cites steel and plastics as examples. “We’re looking into what different accounting methods, used by different organizations and sometimes different countries, can tell us about how to identify emissions for specific materials.”
Working directly with partners like Baker Hughes and Google, says Toledano, “gives us the reality check”. She explains, “We need industry partners in order to understand the industrial processes, the challenges organizations are facing when it comes to decarbonization, and even the feasibility of declaring emissions. Being close to reality will also ensure that we develop methodologies that get industry uptake.”
To this end, the study will also seek to identify how companies can evaluate where to intervene, initially in their metals and minerals supply chains, to advance their carbon goals. For instance, where should their focus be in terms of the most impactful materials? Or does transport of the material (say from mine to processing hub) or embodied emissions of the material contribute most to their carbon bottom line?
Building on consistent methodologies
Achieving clarity, consistency, and comparability of emissions data from mining resources will generate insights and benchmarks for all industries and for further investigation.
For example, can recycling make a material impact? The final series of questions posed by the study and slated for continuing research include: What are the potential emissions reductions to be gained from large-scale use of recycled materials once you consider the emissivity and complexity of each material’s recycling process? And what are the next steps for the research group’s industry partners toward participating in a circular economy?
The study focuses on detail and precision — identifying the cracks, fissures, and ravines in reporting supply-chain emissions from metals and minerals. It aims to help level the playing field for companies serious about reducing their carbon footprint and meeting their environment, sustainability, and governance (ESG) goals.
Inconsistent reporting frameworks invite abuse reminiscent of “creative accounting,” enabling companies to avoid negative consequences from investors, consumers, and government regulation, says Tracy. “Investors could withdraw funding from companies whose emissions reporting is too high even though they are reporting with greater diligence and honesty,” she says, adding that shareholders might also choose to withdraw, and consumers may take their business elsewhere. There’s too much at stake, both for the climate and for companies, to enable inconsistent or loosely-defined carbon accounting. To add to this, she emphasizes, "the growing state of mistrust creates a negative public perception of even trying to achieve sustainability.”
Payne Institute research ultimately seeks to inform energy and environmental policy, which can accelerate or discourage the behaviors of business and the aspirations of society. Says Bazilian, “The more explicit we can be about the challenges — in this case about data paucity and methodological inconsistency — as well as the tensions that exist for companies between environment and economics and finance and market share, the better.”
Is putting emissions data under the microscope likely to generate controversial findings? The study’s premise has controversial elements, Bazilian says, in that “We’re already putting it out there that this space is terribly confusing for businesses that want to try to report all their emissions.” It also opens the lid on the fact that unstandardized data has been widely applied, and that “The most used carbon accounting protocol in the world — the greenhouse gas protocol — has a lot of holes in it.”
Building trust in our carbon-accounting systems can only advance the greater climate cause.
 The Coalition on Materials Emissions Transparency (COMET) is a collaboration between the United Nations Framework Convention on Climate Change (UNFCCC), the Columbia Center on Sustainable Investment (CCSI), RMI (formerly known as Rocky Mountain Institute), and the Payne Institute for Public Policy at the Colorado School of Mines. Its objective is to advance accurate and transparent carbon accounting through a harmonized set of principles, standards, and reporting requirements. This harmonization would allow for independent verification of the emissions reported by different industries and supply chains, and would work to benefit all environmental stakeholders, including buyers, sellers, investors, and governments. COMET was launched at the World Economic Forum Summit in January 2020 and has dedicated initial research to understanding how to best harmonize current carbon accounting efforts.
 Scope 3 emissions — which relate to emissions from upstream product and service providers to Baker Hughes and downstream emissions generated during the use of Baker Hughes’ products and services — are the most at risk, and they potentially represent the greatest slice of any company’s emissions. But reporting of Scope 1 (direct emissions from sources owned or controlled by the company) and Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company) emissions is also rarely comparable with that of other companies using different methodologies or variable-quality data.