If we don’t address the challenges in collecting, processing and sharing data at the right level of quality, outgoing NSSN Board member Frank Zeichner writes, we risk Australia’s progress towards achieving its carbon reduction targets.

The starting gun has been fired in Australia. In July 2022, the Australian Government enacted the Climate Change (Consequential Amendments) Act 2022, committing Australia reducing greenhouse gas emissions by 43 per cent below 2005 levels by 2030 and achieving net zero emissions by 2050.

Whether or not Australia achieves these goals depends on the quality of the data. Why?

1. Data tells us where we started and how we’re progressing in meeting our targets through measurement, reporting and verification)

2. Data tells businesses, government and investors where to focus investment and how to make the right decisions to achieve transition targets.

Outgoing NSSN Board member Frank Zeichner. Credit: Supplied

Mandatory disclosure is coming

My first point has a new and powerful incentive coming; climate-related financial disclosure (CRFD) based on the international ISSB standard will be legislated in 2024. The Australian CRFD includes Scope 1, 2 and 3 emissions and mandatory disclosure will be progressively phased in from 1 January 2025.

This is a significant shift from where we were a few years ago, however it has some serious data collection challenges including:

· Requiring only qualitative data; there’s ambition (but no plan) for quantitative data within three to five years.

· The data required is of relatively general quality and inadequate for guiding businesses and governments on where to focus and how to navigate the transition effectively (e.g., the reporting requirement is annual and in arrears).

· Collecting even low-quality qualitative data is a challenge for many businesses – especially for Scope 3 emissions.

We need to address the challenges in collecting, processing and sharing data at the right level of quality so we don’t disadvantage Australian industry in competing in a new global carbon-sensitive market, Frank Zeichner writes. Credit: AdobeStock

To drive change we need better sensing and data intelligence

Regarding my second point, driving business, sectoral and government transition and behaviour change needs much better data; for example, to give investors, lenders and insurers the level of data precision (read lower risk data) needed to fund the businesses that are transitioning well.

Better quality data is also necessary for:

· Futureproofing climate-related risk in portfolios

· Enabling businesses to make timely decisions to adapt to changing climate and make the supply chain decisions that will help meet their targets.

· Addressing greenwashing.

If we don’t address the challenges in collecting, processing and sharing data at the right level of quality, we risk Australia’s progress towards achieving its carbon reduction targets. We would also disadvantage Australian industry in competing in a new global carbon-sensitive market.

The Federal Government has committed Australia to reducing greenhouse gas emissions by 43 per cent below 2005 levels by 2030 and achieving net zero emissions by 2050. Credit: AdobeStock

Australia’s opportunity to take the lead

We have an opportunity to address these data challenges. Importantly, Australia has an opportunity to take the lead in the collection and processing of emissions data and the technologies that underpin it. Doing so would increase the reliability and confidence in climate-related information and:

· Unlock the power of market-based incentives to drive emissions reductions transition

· Accelerate the pace of transition

· Advance the digital underpinnings for a future low-carbon economy. This is critical to reaching our targets after we have banked the easier to achieve transition to renewables emissions reductions.

· Build a world leading sensing and data management (including AI) industry that leverages our leading sensing and AI research

What’s needed to address our data quality challenges is a government-supported industry-led program that will drive the shift to digitally enabled emissions data capture and management. Such a program would need to address:

· Data requirements: understanding differing data needs across multiple government (international, federal and state) and industry requirements e.g., investors, banks and supply chain partners. This includes data quality that is verifiable and at the right level of precision. PCAF level 2 or better.

· Cost of data collection and management: lowering the cost (and complexity) of data collection and management through automation will be critical to adoption.

· Business capability: developing the capability and understanding of businesses to digitally collect and manage sustainability data.

· Trusted sensing and data tools and service models: helping businesses to lower the cost.

· Trusted data sharing models: enabling scaling, informing supply chains, climate scenario assessments and decarbonisation pathways.

Understanding these issues at a business and sectoral level and developing a national plan for digitally enabled emissions data capture and management is where we need to get to – and fast. The goal should be to get there by 2028, when Treasury would like to see quantitative (rather than qualitative) data informing mandatory climate-related financial disclosure reporting.

Frank Zeichner is CEO of IoT Alliance Australia (IoTAA), the peak body for the Internet of Things (IoT) in Australia. Established in 2016, IoTAA is a non-profit industry association with a vison is to enable a data smart Australia and advance society through trusted, accessible real-time data.

IoTAA has partnered with Carbon Markets Institute on a national campaign to kickstart the development of a national plan for digitally enabled emissions data capture and management.

Better quality data is vital for Australia’s net zero transition, but we’re struggling