Accurate CO₂ emissions reporting is a core component of effective ESG management. For many organisations, emissions data underpins regulatory compliance, stakeholder reporting, net-zero commitments and strategic decision-making. However, despite the growing number of ESG tools on the market, reporting emissions accurately and consistently remains a significant challenge.
These challenges often arise from fragmented data sources, inconsistent methodologies and tools that struggle to reflect how emissions are generated and managed in real operational environments.
Understanding the common issues with CO₂ emissions reporting helps organisations make better use of ESG tools and avoid false confidence in the numbers they produce.
Data Quality and Availability
One of the most persistent challenges in CO₂ reporting is data quality. Emissions calculations are only as reliable as the data they are based on, yet many organisations rely on incomplete, estimated or manually collected inputs.
Data may be spread across multiple systems, suppliers and departments, each using different formats and levels of accuracy. In some cases, emissions data is derived from invoices, spreadsheets or assumptions rather than direct measurement.
When ESG tools ingest poor-quality data, they may still produce polished dashboards and reports, giving the appearance of accuracy while masking underlying weaknesses.
Inconsistent Boundaries and Scope Definition in Emissions Reporting
Defining organisational and operational boundaries is a critical step in emissions reporting. In practice, this is often handled inconsistently.
Different teams may interpret boundaries differently, particularly when organisations operate across multiple sites, regions or joint ventures. Changes in organisational structure, acquisitions or divestments further complicate the picture.
If ESG tools are not configured with clear, consistent boundary definitions, emissions totals may fluctuate for reasons unrelated to actual performance, undermining confidence in reported figures.
Complexity of Scope 3 Emissions
Scope 3 emissions are often the largest and most complex category to report. They involve indirect emissions across the value chain, including suppliers, contractors, logistics and product use.
Many ESG tools struggle to represent this complexity meaningfully. Data is often incomplete, based on industry averages or provided inconsistently by third parties. This can lead to large estimation ranges and limited confidence in results.
Without transparency around assumptions and data sources, Scope 3 figures can be difficult to interpret and even harder to improve.
Over-Reliance on Estimates and Default Factors
Emission factors and estimation models are necessary, particularly where direct measurement is not feasible. However, problems arise when organisations rely too heavily on default values without understanding their limitations.
Some ESG tools apply generic factors that do not reflect site-specific conditions, operational practices or regional differences. While this may simplify reporting, it can obscure opportunities for meaningful reduction and misrepresent actual performance.
Estimates should support reporting, not replace engagement with real operational data.
Limited Traceability and Auditability
As ESG reporting comes under increasing scrutiny, traceability becomes critical. Stakeholders, auditors and regulators expect organisations to explain how figures were calculated and where data originated.
Many ESG tools struggle to provide clear audit trails. Users may see a final emissions total but have limited visibility into how individual data points contributed to it.
Without traceability, organisations risk being unable to defend their reporting or respond confidently to external challenge.
Misalignment with Operational Reality
CO₂ emissions are generated by real activities: energy use, transport, manufacturing processes and asset operation. When ESG tools operate in isolation from operational systems, reporting can become disconnected from reality.
For example, changes in equipment usage, process efficiency or operational schedules may not be reflected promptly in emissions data. This lag reduces the usefulness of reporting for decision-making and improvement.
Tools that fail to reflect what is actually happening in operations may support compliance, but they add limited value in driving real change.
Difficulty Turning Emissions Data into Action
Reporting emissions is only the first step. The real value of ESG tools lies in their ability to support reduction strategies and informed decision-making.
Many tools focus heavily on reporting outputs but provide limited support for analysing drivers, identifying hotspots or tracking improvement actions. As a result, organisations may know their emissions totals but struggle to understand where to intervene effectively.
Without integration with action tracking and performance management, emissions reporting risks becoming a static exercise rather than a driver of improvement.
Inconsistent Methodologies Across ESG Tools
Organisations often use multiple ESG or sustainability tools, either across different business units or for different reporting frameworks. Differences in methodologies, assumptions and calculation logic can result in conflicting outputs for the same data.
These inconsistencies create confusion internally and erode confidence externally. Reconciling figures across tools becomes time-consuming and undermines the credibility of reporting efforts.
Consistency of approach is as important as sophistication of tooling.
Change Management and User Understanding
Even well-designed ESG tools can fail if users do not understand how to use them correctly. Emissions reporting involves judgement calls, assumptions and interpretation, not just data entry.
When users lack training or context, errors creep in. These errors may not be immediately visible but can materially affect reported results.
Effective CO₂ reporting definitely requires good tools, but also informed users who understand both the data and its implications.
Towards More Meaningful Emissions Reporting
Addressing CO₂ reporting issues requires more than selecting the right ESG tool. Organisations need clear governance, defined boundaries, consistent methodologies and strong links between reporting and operations.
ESG tools should support transparency, traceability and continuous improvement rather than simply producing headline numbers. When emissions data is accurate, contextualised and actionable, it becomes a powerful input to strategic and operational decision-making.
Emissions reporting is a complex challenge
CO₂ emissions reporting is a complex challenge, and no tool can solve it in isolation. Common issues such as poor data quality, inconsistent boundaries, over-reliance on estimates and limited traceability can undermine even the most advanced ESG platforms.
Organisations that recognise these challenges — and design their reporting processes to address them — are better placed to produce credible ESG disclosures and drive meaningful emissions reduction.
Effective emissions reporting should focus on understanding impact, building confidence in data, and using insight to support better decisions over time. A good ESG tool will allow emissions data to be interrogated and presented in a variety of formats to address the needs of the full range of stakeholder groups.
