IBM has announced the integration of natural language processing (NLP) into its ESG data collection, analysis, and reporting platform, IBM Envizi ESG Suite. This integration significantly enhances the platform’s ability to capture, calculate, and analyze organizations’ Scope 3 greenhouse gas (GHG) emissions.
The move comes in response to global companies facing growing regulatory pressure to report on their Scope 3 emissions—those originating in their upstream and downstream value chains. Emerging sustainability reporting standards, such as the EU’s CSRD and the IFRS’ ISSB standards, now require Scope 3 disclosure. Although Scope 3 emissions often constitute the majority of a company’s carbon footprint, they are typically the most challenging to track and report, as they occur in areas outside the company’s direct control. IBM’s survey of global business leaders found that only 38% currently measure Scope 3 emissions.
IBM acquired Envizi in 2022 to bolster its AI-powered ESG solutions capabilities. While the IBM Envizi suite already covers all Scope 3 emissions categories, the integration of NLP’s text classification capabilities is expected to significantly improve efficiency and accuracy.
The new functionality enables the categorization of spending data from financial or ERP systems, addressing one of the key challenges in managing Scope 3 emissions data. Additionally, IBM Envizi now includes a spend-based emissions factor library harmonized across over 180 countries. This library aims to help organizations swiftly, accurately, and efficiently calculate Scope 3 emissions for purchased goods and services.
Christina Shim, Vice President and Global Head of Product Management and Strategy at IBM Sustainability Software, emphasized the growing need for robust, auditable data management, calculation, and reporting processes as regulatory requirements and external interests drive organizations to disclose GHG emissions, including Scope 3 emissions. IBM Envizi’s new capabilities are designed to facilitate Scope 3 emissions calculations for ESG reporting and enhance operational insights.
By FCCT Editorial Team
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