Leveraging AI for Emissions Reporting Data

Emissions reporting and financial reporting have already begun to converge — driven not only by how interdependent they are, but also the increasing number of regulatory requirements impacting both financial and climate-related disclosures. With that trend certain to continue, the business case for establishing an effective emissions reporting strategy is evident. Even with ongoing uncertainty around regulatory compliance in the United States at both the state and federal levels, effective emissions reporting can drive cost savings, enhance business strategy, and improve stakeholder relationships.

Of course, any reporting is only as useful as the quality of data behind it, so establishing processes for verifiable, accurate data is essential.

What’s included in an emissions reporting strategy?

Technology is no longer the barrier; data is. Especially with progress made with AI, the challenge is no longer a lack of technologies to assess, report, and provide insight into decarbonization performance, it’s a lack of accessible and quality data to begin with.

The priority should be establishing the data collection, methodology, and management that will best feed the technology with the accurate and actionable data.

·       Ensure data accuracy: Emissions data must be verifiable. Know the sources of your data and how it's collected so you can show where it comes from.

·        Streamline data collection: Utility invoice data remains a key input for carbon calculations. Find cost savings in the expense and data management process, and efficiently aggregate consumption data. For Scope 3 emissions, companies need to work across the organization.

·        Access a single source of truth: Whether you have a national or global portfolio, ensure centralized visibility that’s critical to identifying opportunities and aligning stakeholders.

·        Report, disclose, act: Understand your progress toward goals. Prepare your verifiable data for disclosure or adjust your decarbonization strategy.

Once data is publicly reported, it's treated in a similar manner to publicly reported financials. If an error is found after the data is reported, restatements would need to be handled carefully and disclosed in future reporting.

This is why all of these best practices should be blended with both AI-based technology and human expertise, supporting efficient data collection, identifying any data gaps, and determining the right course of action.

How is AI supporting data collection and emissions reporting?

Many time-consuming and resource-draining processes and tasks can be automated or streamlined thanks to emerging A.I. tools. Companies using and investing in these technologies have a leg up when it comes to better managing their energy usage and carbon footprint. This is especially relevant for supply chains and Scope 3 emissions. Vendor data is coming from many sources, and it can be a manual-intensive process to pull together and categorize relevant data. Supported by human oversight, emerging AI technologies are working to support that consolidation. AI is also beginning to have a valuable impact on climate risk assessments, generating more robust models continuously improved by machine learning, especially for companies leveraging natural resources or needing to minimize disruption to their global supply chains.

The holistic impact of emissions reporting

The benefit goes beyond just emissions reporting. A robust emissions reporting strategy will involve alignment with finance, accounting, and legal teams — identifying opportunities for shared benefits around data collection, improved processes and methods, or even identifying mutually beneficial opportunities like renewable tax credit transfers. Regulators involved with financial disclosures are also getting involved with climate-related risk disclosures. Similar methodologies could soon mean climate reporting is held to the same scrutiny by regulators and investors.

Emissions reporting can:

·        Identify high-emitting activities where emissions reduction may result in potential cost savings.

·        Reduce risk through a better understanding of Scope 1, Scope 2, and Scope 3 emissions, and the associated activities, to map where your business may be vulnerable.

·        Support stakeholder, investor, employee, consumer, and partner relationships, including companies focused on their supply chain emissions, and will need you to report accurate data.

·        Support the evolution of the regulatory landscape, with some states (like California) still moving ahead with climate disclosure rules. Companies will want to keep a close eye on timelines to understand what more they might soon be required to do.

The importance of data and emissions reporting

California’s disclosure rules are a great example of exactly why it’s so important to have a solid data foundation in place.

As these regulations continue to evolve — including potential requirements to have third-party-validated emissions data by early 2026 —work with clients now to gather, analyze, and report out their emissions.

Additionally, provide details around the Inventory Management Plan (IMP), which gives thorough documentation around the emissions inventories and methodologies, helping get through the third-party validation and regulatory process.

For companies that haven’t been as proactive around their emissions reporting, it’s not impossible to get the data in place for 2026 regulatory requirements, but don’t wait until the new year to start. So regardless of what the final regulatory requirements end up being — in California, in other states, or at the federal level — immediate attention around data collection, quality, and reporting is essential.

Ultimately, emissions reporting is no longer just an environmental responsibility. It is a financial and strategic imperative. As regulations continue to evolve and financial and climate disclosures become increasingly intertwined, businesses must prioritize high-quality data collection and reporting methodologies. Leveraging AI alongside human expertise can streamline emissions tracking, enhance accuracy, and support compliance with emerging regulations. Beyond compliance, a well-structured emissions reporting strategy can drive cost savings, reduce risks, and strengthen stakeholder relationships. Companies that proactively integrate emissions reporting into their broader business strategy will be better positioned to navigate regulatory changes and capitalize on sustainability-driven opportunities.