Three data hurdles businesses face as COP31 turns to implementation
COP31 has shifted the global climate conversation from ambition to execution. Negotiators in Türkiye are no longer focused on raising targets. Instead, the emphasis is on turning existing commitments into funded projects and measurable reductions. For businesses, this means something concrete: you need data systems that can prove your progress, not just describe your intentions.
The problem is that most companies are not set up for this. Emissions inventories sit in sustainability team spreadsheets. Procurement decisions happen without carbon visibility. Finance teams allocate capital using one set of assumptions while compliance teams report using another. Consequently, businesses struggle to demonstrate credible delivery even when real effort is underway.
Three specific data challenges are now blocking implementation. Understanding them matters because they determine whether your decarbonisation plans remain on paper or translate into operational reality.
COP31's implementation agenda raises the bar for corporate reporting
Türkiye's COP31 presidency introduced the Climate Implementation Bridge, a mechanism designed to convert national climate plans into investable projects. The initiative reflects a broader shift across international climate policy. Governments and investors are no longer satisfied with target announcements. They want evidence that transition plans are being executed.
This change in expectations has reached boardrooms. Analysis conducted before COP31 found that 92% of business leaders consider sustainability a competitive advantage. However, only 15% felt fully prepared to deliver on it. The gap between perception and readiness is largely a data problem.
Meanwhile, disclosure requirements have become more prescriptive. The International Sustainability Standards Board issued IFRS S1 and IFRS S2 in June 2023, creating a global baseline for investor-focused sustainability reporting. IFRS S1 addresses sustainability-related risks and opportunities that could affect cash flows, access to finance or cost of capital over the short, medium or long term.
IFRS S2 goes further. It requires companies to disclose Scope 1, Scope 2 and Scope 3 greenhouse gas emissions, along with metrics, targets, governance processes and information about how climate risks affect the business model and value chain. These requirements treat sustainability information with the same rigor expected of financial reporting. Traceability, consistency and decision-usefulness are no longer optional.
Multiple reporting regimes create conflicting data demands
The first hurdle is regulatory fragmentation. Businesses rarely report under a single framework. A manufacturer exporting to Europe may need to address ISSB standards, European Sustainability Reporting Standards, national climate rules, sector-specific requirements, deforestation regulations and carbon-related trade measures simultaneously.
These regimes often seek similar information. However, they do not define data categories, boundaries, methodologies or reporting formats in the same way. A company may have one emissions inventory but still need to transform and map it repeatedly for different disclosures. Each transformation introduces compliance risk and administrative cost.
Separate spreadsheets and reporting processes create inconsistent figures. Duplicated work becomes the norm. Uncertainty grows over which version is authoritative. The ISSB standards provide an important degree of alignment by integrating the Task Force on Climate-related Financial Disclosures' four-pillar structure: governance, strategy, risk management, and metrics and targets. Nevertheless, alignment does not eliminate the need to understand detailed requirements in each applicable jurisdiction.
A more resilient approach involves maintaining a governed central data system. This system should preserve source data and calculation assumptions, track organizational and operational boundaries, and map common data to multiple reporting frameworks. It should maintain an audit trail for assurance and regulatory review while applying human oversight to automated classification and reporting.
The objective is not to produce more reports. Instead, the goal is to create one reliable data foundation that can generate different outputs without rebuilding the underlying analysis each time. This reduces cost, improves consistency and shortens reporting cycles.
Industry averages conceal material differences in supplier performance
The second hurdle is data quality. Companies often choose between using industry-average emissions factors and collecting primary data directly from suppliers and operating sites. Industry averages are faster and easier to obtain, especially when a company has thousands of suppliers or lacks visibility into lower tiers of its supply chain.
However, averages can conceal major differences in production methods, energy sources, geography and efficiency. Research indicates that industry-average ESG data can differ from actual values by 30% to 40% or more. That level of variation can materially affect emissions inventories, procurement choices and the apparent progress of a reduction program.
Using averages can also weaken commercial incentives. A supplier that invests in renewable energy or cleaner production may receive little recognition if the buyer continues to apply a generic sector factor. Conversely, a company may overstate or understate its footprint because the estimate does not reflect its actual operations.
Inaccurate data affects more than reporting. It can distort carbon pricing exposure, carbon border adjustment costs, product-level profitability and supplier selection. It can undermine transition plan credibility, restrict access to sustainability-linked finance and misdirect abatement investments toward low-impact opportunities.
Primary supplier data is more difficult to collect, validate and maintain. However, it provides a clearer basis for targeted reductions. Supplier data exchanges, standardised questionnaires, digital product records and contractual data requirements can help companies move progressively from estimates to verified information.
This transition should be risk-based. Primary data is most valuable where emissions are material, suppliers are strategically important or regulatory exposure is high. Estimates may remain appropriate for immaterial categories, provided the methodology and limitations are transparent. The key is to prioritise verification effort where it will have the greatest impact on decision-making and compliance risk.
Sustainability data remains isolated from operational decision-making
The third hurdle is internal disconnection. Even a detailed emissions inventory has limited value if it remains isolated within a sustainability team. The central question is whether sustainability data influences everyday decisions in procurement, finance, operations, product design, logistics and risk management.
A company might have a detailed emissions inventory but lack the information needed to make procurement decisions, prioritise investments or evaluate the effectiveness of emissions reduction measures. This disconnect produces a reporting paradox: you can explain your carbon footprint to an external audience while lacking the internal information needed to reduce it.
Emissions data becomes more actionable when connected to purchase orders and invoices, supplier and product master data, energy consumption, production volumes and transport routes. It should link to capital expenditure, operating margins, facility-level climate risks and business continuity plans. Connecting these datasets allows managers to examine trade-offs among cost, carbon, compliance and resilience.
It also supports more precise scenario analysis. For example, you can compare the financial and emissions effects of changing suppliers, electrifying a production process or redesigning a product. The IFRS framework reinforces this connection by requiring companies to explain how climate-related risks and opportunities affect their business model and value chain, not merely to publish an isolated emissions figure.
Without this integration, sustainability teams produce annual reports while procurement teams make purchasing decisions based on cost alone. Finance teams allocate capital without carbon considerations. Operations teams plan production schedules without energy visibility. The result is that emissions reduction remains an aspiration rather than an operational reality.
Five priorities for companies preparing for implementation scrutiny
The move toward implementation changes sustainability data from a periodic reporting exercise into an enterprise control issue. Companies seeking credible progress should focus on five practical priorities.
First, establish ownership and controls. Finance, sustainability, procurement, operations and risk teams should agree on definitions, responsibilities, approval processes and evidence requirements. Without this agreement, data will remain fragmented and inconsistent.
Second, create a common data model. Emissions, energy, supplier, product and financial data should use consistent organisational structures, units, boundaries and time periods. This common model enables cross-functional analysis and reduces reconciliation effort.
Third, prioritise primary data. Identify the suppliers, facilities and products that contribute most to emissions or regulatory exposure. Focus verification efforts there first. This risk-based approach delivers the greatest improvement in data quality for the least effort.
Fourth, design for multiple frameworks. A single governed dataset should support applicable ISSB, regional, national and sector-specific disclosures wherever possible. This reduces duplication and improves consistency across reporting outputs.
Fifth, link reporting to decisions. Data should feed procurement strategies, capital allocation, product development, operational planning and transition risk analysis. It should not remain confined to annual reporting. The value of sustainability data is realised when it shapes business decisions, not when it populates disclosure templates.
Automation and artificial intelligence may help classify documents, identify anomalies and map data to disclosure requirements. However, automated systems still require controlled inputs, documented methodologies and human review, particularly where estimates or judgement affect reported results. Technology can accelerate data processing but cannot replace governance and oversight.
Key facts for businesses navigating the implementation phase
- COP31's Climate Implementation Bridge focuses on converting national climate plans into funded projects rather than negotiating new commitments.
- IFRS S1 and IFRS S2, issued in June 2023, create a global baseline for sustainability reporting with the same rigor expected of financial disclosures.
- Industry-average emissions data can differ from actual values by 30% to 40% or more, materially affecting inventory accuracy and procurement decisions.
- Regulatory fragmentation requires companies to map the same underlying data to multiple frameworks with different definitions, boundaries and methodologies.
- Sustainability data delivers value when connected to procurement, finance, operations and capital allocation, not when isolated in annual reports.
- Primary supplier data is most valuable where emissions are material, suppliers are strategically important or regulatory exposure is high.
Why integrated data systems determine transition plan credibility
Poor-quality data creates more than a reporting inconvenience. It can cause you to misallocate capital, miss efficiency opportunities, misjudge regulatory exposure and lose credibility with investors, customers and regulators. Conversely, connected and verified data can reveal operational savings, improve forecasting and direct decarbonisation investment toward the highest-impact opportunities.
The central implication is that sustainability data should be treated as business infrastructure. Companies that build reliable systems can use the same information to satisfy disclosure requirements and improve performance. Those that continue to rely on fragmented spreadsheets, generic averages and isolated reporting processes may find that implementation costs rise precisely when the market expects faster, more demonstrable progress.
COP31's implementation focus raises the standard for corporate climate claims. Targets and commitments will increasingly be assessed against measurable delivery, investment decisions and real-world reductions. This shift rewards companies that have invested in data systems capable of proving progress, not just describing intentions.
For UK SMEs, the stakes are particularly high. Public sector supply chains increasingly require carbon reporting under Procurement Policy Note 06/21. Large customers are extending disclosure requirements down their supply chains. Access to ESG compliance support can help you build the data foundations needed to respond to these demands without diverting resources from core operations.
Similarly, structured carbon reporting programs can help you move from industry averages to verified data in a phased, cost-effective way. The objective is to create a system that supports both external disclosure and internal decision-making, not to add another layer of administrative burden.
Where to find authoritative guidance on disclosure requirements
The International Sustainability Standards Board publishes detailed guidance on IFRS S1 and IFRS S2, including illustrative examples and implementation support. You can access these resources through the IFRS Sustainability Standards Navigator.
The UK government's Department for Energy Security and Net Zero provides guidance on national climate policy, net zero commitments and regulatory developments. This information is available through the official gov.uk site.
For procurement-related carbon reporting requirements, the Cabinet Office publishes detailed guidance on Procurement Policy Note 06/21, including templates and carbon reduction plan requirements. This guidance is available at gov.uk.
The Task Force on Climate-related Financial Disclosures maintains comprehensive implementation guidance and resources, now integrated into the ISSB framework. You can find these materials at the TCFD knowledge hub.