Carbon accounting software will be vital for manufacturers looking to navigate – and take advantage of – the complications of CSRD going forward. 

Carbon reporting will bring challenges to the lives of manufacturers. But with the right carbon reporting software, manufacturers can step into the CSRD era with confidence. 

What is CSRD and Why is it so Important for Manufacturers to Get it Right? 

The Corporate Sustainability Reporting Directive, or CSRD, is a set of European regulations that mandate the reporting of business’ carbon emissions. The CSRD is part of Europe’s overall efforts to reverse the course of climate change – which is largely driven by carbon emissions.  

As businesses can be heavy emitters of carbon (especially manufacturers), they must keep track of their carbon emissions and provide reporting on them.  

European companies that fail to comply with the CSRD may face fines, and even incarceration.  

Carbon accounting software can proactively monitor your own operations while automatically pulling in emissions data from suppliers and customers.  

How CSRD will change Manufacturing 

Manufacturers have always faced the need to track finances, production and supply lines. Now manufacturers will face the added regulatory burden of tracking carbon emissions.  

Publicly owned businesses have always had to track & report on their finances. These companies will find tracking and reporting on carbon emissions familiar. Privately owned enterprises may face growing pains as they embark on public reporting of carbon emissions. 

But manufacturers can also find novel opportunities within the new world of sustainability reporting.  

Manufacturers that are nimble enough to adapt quickly to reporting standards may find their services in higher demand. Especially if they can find ways to reduce their carbon emissions.  

Beyond immediate opportunities for new business, early adopters may also find a more agreeable environment for raising capital. As investors face increasing regulatory pressures to hold sustainable investments in their portfolios, there will be more cash looking for responsible manufacturers.  

For a full view of carbon reporting in manufacturing, see this Guide to Sustainability and Carbon Reporting in Manufacturing. 

What are the Complexities of CSRD? 

Broadly speaking, there are two sets of challenges with CSRD reporting. The first challenge is in tracking and reporting on your own operations’ carbon emissions. The second challenge is reporting on carbon emissions beyond your operation: reporting on emissions of your suppliers and end-users.  

Reporting Carbon Emissions from your Own Operations 

At first blush, this would seem to be the simpler of the two. And that is probably true.  

But reporting on your own carbon emissions has its own steep challenges. Take the example from this piece on Carbon Reporting in the Automotive Industry. 

Auto industry manufacturers often have multi-site operations. Meaning that development of the same vehicle can take place amongst many geographically distant operations. Different operations may have different approaches to tracking carbon emissions, or they may have different emissions tracking systems. 

Aggregating data from different sites and normalising that data for final reporting can present a steep challenge. 

Reporting Carbon Emissions from Beyond your Organisation 

One of the main challenges of the new CSRD requirements comes from the fact that manufacturers will be tasked with tracking emissions beyond your own organisation. 

Under the new reporting regulations, European manufacturers not only have to monitor and report on their own carbon emissions, but also on the emission of their suppliers and downstream users. These are referred to as “Scope 3 emissions”. 

Reporting emissions of suppliers can be a formidable challenge. Manufacturers often have hundreds of tier 1 direct suppliers. And those tier 1 suppliers in turn have their own suppliers. Simply getting consistent data at regular intervals from your own direct suppliers can require hours of overhead management.  

Add to this the challenge that suppliers may have different approaches to carbon tracking. Some suppliers may depend on “spend-based” data collection methods, while others use “activity-based” methods. Rationalising these methods to generate aggregate reports can cause headaches. 

Carbon Accounting Software and How it Helps you Meet the CSRD Challenge 

Day-to-day management of a manufacturing operation is complicated enough.  

However, saving the planet is necessary.  

Manufacturing operations generate 22% of all GHG emissions in Europe. European manufacturers have the opportunity to really move the needle, in terms of reducing climate change. 

To do this, manufacturers will come to find carbon accounting software essential. Just as they do with their financial accounting software. 

How Carbon Accounting Software makes Tracking your Own Emissions Easier 

Manufacturers can implement a carbon accounting software system throughout their organisation – across multi-site operations. 

With a carbon accounting system that is enabled by software and data capture hardware, manufacturers can implement a carbon tracking strategy from the top-down, and then compile carbon emissions from the bottom-up.  

Advanced carbon accounting software will provide you with: 

• Simplicity – provides a simplified view of your manufacturing operations’ carbon footprint 
• Granularity – the granularity needed to find opportunities for reducing emissions 
• Assurance – data quality and traceability give you peace of mind 
• Recommendations – highlight what really matters and where to focus your efforts 

Mavarick’s carbon accounting software provides you with these and more. With Mavarick, IOT devices can be easily deployed to every asset in your operation, and activity data on your existing systems can be integrated into the platform. This data is analysed, put through AI engines, so that you get tailored recommendations on what to do next. 

Using Carbon Reporting Software for Tracking Supplier & Downstream Emissions 

The greatest advantage of a modern carbon accounting software system may be in its ability to simplify upstream and downstream emissions tracking. 

Mavarick’s carbon accounting software can be integrated with the systems of upstream suppliers and your customers – allowing them to directly import carbon emissions data.  

Carbon emissions data from your suppliers can be rationalised and aggregated within the Mavarick system. 

Integrations with upstream and downstream carbon reporting systems can be carried out even if your suppliers and customers are not using Mavarick’s carbon accounting software. 

Exporting data from Carbon Accounting Software for CSRD Reporting 

Carbon accounting software systems such as Mavarick’s can be configured to provide automated exports of carbon emissions data. 

The automated exports are pre-formatted to meet requirements for Scope 1, Scope 2, and Scope 3 CSRD reporting, so that you can continue to focus on carbon reduction initiatives and making product! 

Contact Mavarick today to see how simple and powerful it is to integrate carbon reporting software within your operation so you can get ready for CSRD.