How the Right Emissions Data Can Drive Decarbonization in High-Emitting Industries

These pilot projects provide a blueprint for improving emissions transparency and driving cuts.

For years, companies have been collecting data — on customers, on operations, on transactions — to optimize profits. Now, corporate buyers of commodities like steel and aluminum are increasingly collecting emissions data to gain insight into the carbon footprints of products they buy and sell. The emissions data — and transparency into how that data is collected and calculated — is a first step. The second step is for the data to catalyze corporate action to decarbonize.

For emissions data to effectively drive action, we’ve proposed that it must be specific, high quality, and standardized. To put this theory to the test, we collaborated with steel and aluminum industry leaders, as well as supply chain stakeholders in the automobile and building sectors, to pilot test RMI guidance and tools designed to improve emissions data and transparency — and produce meaningful decarbonization efforts.

Addressing industry barriers to decarbonization with emissions transparency

The pilot series tested how RMI guidance and tools could help companies address challenges in accessing and using emissions data to inform emissions reduction decisions in their supply chains. The challenges companies face in this area are many. Modern supply chains are complex and multi-tiered; collecting emissions data from suppliers is rarely straightforward, and inconsistent methodologies to calculate product-level emissions make product comparisons difficult. As companies move upstream beyond the suppliers they directly purchase from, this only becomes more arduous.

There is also a lack of standardization in data transfer, with formats ranging from simple PDFs and emails to sophisticated proprietary software. The types of data reported also vary, presenting challenges for companies trying to collate data from hundreds of suppliers. Even with high-quality emissions data, companies’ ability to apply it to drive emissions cuts is limited. The graphic below highlights how these challenges manifest along the supply chain, and how RMI guidance and tools address them.

Each pilot, while unique in industry and product, followed a consistent structure to address barriers to emissions transparency. As outlined in the illustration, buyers requested that suppliers report emissions following RMI’s Steel and Aluminum Emissions Reporting Guidance to address challenges of data specificity, quality, and transparency. The data was calculated using the Excel tool and reported in standard data exchange formats to address standardization challenges. Participants also explored opportunities to use emissions data to drive decarbonization strategies.

How these pilots demonstrated that improving emissions transparency can enable decarbonization action

The pilots supported our hypothesis that the standardized exchange of specific, high-quality emissions data can enable more effective decarbonization action. The guidance established a common reporting method and standard data format to enable consistency and comparability. As noted by Norsk Hydro, “A significant advantage is that the pilot and the tool could establish a standardized methodology for carbon footprint accounting in the aluminum industry.”

Across all pilots, participants gained an improved understanding of the benefits of emissions transparency and additional emissions metrics in reflecting decarbonization efforts. Oldcastle BuildingEnvelope shared that the pilots provided “a huge step forward to enable aluminum buyers to access quality carbon emissions data to make more informed buying decisions.” They continued, “This type of detailed and accurate reporting for aluminum is critical to the decarbonization of façade products in the building industry.”

The pilots also helped companies identify ways to incorporate emissions data into decarbonization strategy, target setting, and sustainable procurement. As a result of the pilots, participants prioritized next steps including enhancing supplier surveys to improve emissions data collection and supporting target setting in alignment with 1.5°C-degree pathways. Jaguar Land Rover noted that “the work undertaken by RMI could potentially accelerate the steel industry’s decarbonization journey, ensuring transparency and collaboration along the way.” Toyota underlined that “this pilot is a good ‘first-step’ for a more complicated purchasing process.” BXP, a property developer, is using the aluminum specifications from the pilot in an ongoing project to compare curtain wall manufacturers. The specifications will help the contractor evaluate whether potential suppliers can provide Environmental Product Declarations and meet minimum global warming potential limits for aluminum.

Perhaps most importantly, the pilots promoted constructive supplier-customer conversations, enabling collaboration and joint problem solving on decarbonization. Alcoa said of their experience, “Participation in the pilot was beneficial for us, as it allowed us to gain a better understanding of the needs and challenges of other value chain participants.” Tata Steel also highlighted, “Efforts like this help create a dialogue in the supply chain around carbon accounting and strategies for reducing emissions.”

Challenges to emissions transparency remain, but can be overcome through supply chain collaboration and widespread implementation

The pilots demonstrated that emissions data can drive decarbonization, but challenges remain in achieving industry-wide emissions transparency. Across the entire supply chain, companies must build capacity in collecting data, calculating emissions footprints, and using emissions data to decarbonize. These processes are time consuming, requiring dedicated resources and ongoing sharing of industry best practices. There is also a need for scalable digital solutions to aid in efficient, interoperable, secure data transfers.

These challenges are manageable. Collaborative efforts within supply chains, as demonstrated in the pilots, can improve shared understanding and generate opportunities to jointly reduce emissions. Widespread implementation of standardized reporting methodologies and formats will enable the generation and use of higher quality emissions data. This empowers companies to comply with emissions regulations and ultimately deliver decarbonization impacts to the steel and aluminum industries.

If the experiences of participants in the pilots resonate with you, join us in advancing emissions transparency: RMI is currently developing supplier training materials and a Scope 3 Buyers’ Handbook to help buyers of steel and aluminum:

• Engage suppliers to improve visibility into supply chain emissions by strengthening their reporting capabilities
• Effectively manage uncertainty in setting climate targets and tracking progress by integrating emission data into business strategies
• Drive decarbonization through green procurement and informed decision-making

To get involved, please contact Hao Wu (hwu@rmi.org) and Wenjuan Liu (Wliu@rmi.org).