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How banks can overcome Scope 3 emissions reporting hurdles
In recent times, there has been a rise in regulatory requirements on climate-related disclosures across the globe.
The investor community is expecting increased transparency from banks and financial institutions. There is scrutiny about how they are disclosing and committing to reduce their financed carbon emissions, which include Scope 1, 2, and 3 emissions.
Currently, most companies report Scope 1 and 2 emissions with ease. However, calculation of Scope 3 emissions is typically the most difficult and involves numerous estimations and business rules. This presents a challenge for banks in developing capabilities for Scope 3 emissions estimations. We look at the following core aspects to be considered as part of banks’ Scope 3 emissions analytics.
End-to-end process view of emissions analytics
Challenges in emission analytics and reporting
Translated analytical capability view
Proposed functional architecture
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