NEW SOFTWARE, WHO DIS? — The Securities and Exchange Commission's proposed rules requiring companies to start disclosing their greenhouse gas emissions and climate-related risks won't go into effect until 2024 at the earliest. But software startups that help corporations keep track are already seeing a boom, Avery Ellfeldt reports for POLITICO's E&E News. Under the SEC's proposed rules, the biggest companies will have to start reporting their 2023 emissions in 2024. "Really they have a very short runway to get their act together,” said Tim Mohin, the chief sustainability officer at Persefoni, a leading carbon accounting software company. “We’ve gotten lots of calls from these large companies saying, ‘Tell us about what you do and how we can work with you.'" There are multiple flavors of sustainability management software. Persefoni is the “TurboTax of greenhouse gas reporting,” Mohin said, focusing on collecting data and crunching numbers. Another company, Watershed, also promises its clients detailed emissions accounting — including by tracking down data from suppliers directly — plus guidance on ways to help bring down emissions. They've helped Sweetgreen "measure the carbon footprint of the cheese in its salads based on the agricultural practices of the creameries it buys from,” said Taylor Francis, the company’s co-founder. Another, nZero, touts a “24/7 approach” to calculating emissions that factors in the differences in output and intensity at different points during the day, rather than relying on industry or activity averages. Will this proliferation of accounting software make things more or less murky? The SEC rule is aimed at providing clarity around what types of information companies have to disclose and whether outside groups will need to review it. But it isn't expected to guide how they should be collecting and calculating their emissions. In that way, neither the agency nor the startup companies are addressing a key obstacle: that a range of greenhouse gas accounting methodologies already exist — but aren’t harmonized, said Nicole Labutong, principal with the Rocky Mountain Institute’s Climate Intelligence Program. While some of those methodologies rely heavily on high-level data and industry averages that offer little insight into the emissions associated with particular suppliers and even products, others are more granular, but might skip over certain asset classes or types of products. The startups are “collecting as much data as possible, they’re filling in most of the gaps with emissions factors and other estimations,” Labutong said. “But if you don’t calculate everything correctly or consistently, then that still lends itself to a wide range of error for any particular organization.” Companies might have to wait for clarity until an outside group like the International Sustainability Standards Board comes up with global criteria for disclosures, a step one expert said would likely would prompt an industry-wide software update.
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