Here in Spain, olive oil has become an accidental climate dashboard.
For years, it was just there. A kitchen staple. Drizzled on toast, poured over tomatoes, deployed with generous Mediterranean confidence. Then drought and heat hit production. Prices surged. Sunflower oil overtook olive oil in Spanish kitchens in the first half of 2024, with Reuters reporting 179 million litres of sunflower oil bought versus 107 million litres of olive oil, after olive oil prices rose sharply on the back of climate-driven production shocks.
That is climate risk in plain clothes.
Not abstract. Not theoretical. Not waiting politely for a board agenda item called “ESG update”. It is on the supermarket shelf. In household budgets. In food manufacturing costs. In procurement conversations. In margins.
And this is where emissions data enters the story.
Once climate risk turns into food inflation, supply disruption, insurance exposure, financing cost, procurement risk, customer churn, employee disengagement, and investor scrutiny, a company’s carbon data stops being decorative. It becomes infrastructure.
Bad data is no longer harmless.
Average data is no longer good enough.
Missing data is not neutral.
It is a risk signal.
In a recent episode of my Resilient Supply Chain podcast, Cynthia Lai made the point bluntly. If a company cannot provide credible emissions figures, banks and insurers may use proxy data or industry averages instead. Those proxies will likely push the company into a higher-risk bucket, increasing borrowing costs and insurance premiums. The market fills in the blanks. Rarely with generosity.
That should make every board sit up.
Because emissions data is no longer just about reporting. It is about access to capital. Insurance availability. Tender eligibility. Customer trust. Employee recruitment. Retention. Brand credibility. Strategic resilience.
It is about whether an organisation can prove what it says.
The data says…
The emissions problem is mostly hiding outside the walls of the organisation.
According to CDP and Boston Consulting Group’s 2024 analysis, based on 2023 disclosures, corporate supply chain Scope 3 emissions were, on average, 26 times greater than emissions from direct operations.
A quick translation. Scope 1 covers emissions from sources a company directly owns or controls, such as boilers, furnaces, or vehicles. Scope 2 covers purchased electricity, heat, steam, or cooling. Scope 3 covers the rest of the value chain: purchased goods, transport, product use, waste, business travel, investments, and more.
In other words, the messy bit. So, naturally, the important bit.
The same CDP/BCG work found that upstream emissions from manufacturing, retail, and materials alone had a footprint 1.4 times the total CO₂ emitted in the EU in 2022. Yet only 15% of companies disclosing to CDP had set a Scope 3 target.
That is not a data gap.
That is a strategic blindfold.
CDP’s 2024 supply chain report also found that failure to address climate-related risks in supply chains costs nearly three times more than the actions required to mitigate them. It estimated that companies could unlock US$165 billion in potential financial gains from upstream climate-related opportunities.
The World Economic Forum and Boston Consulting Group have previously shown that eight supply chains, including food, construction, fashion, electronics, automotive, fast-moving consumer goods, professional services, and freight, account for more than half of global emissions. They also estimated that decarbonising many end-to-end supply chains would add as little as 1–4% to end-consumer costs in the medium term.
That matters.
For decades, the fossil economy has presented low-carbon transition as uniquely expensive, while quietly offloading the cost of drought, floods, heat, volatility, health damage, conflict exposure, stranded assets, and price shocks onto everyone else. Very tidy accounting, provided one ignores the planet, the balance sheet, and basic decency.
Regulation is catching up too.
In Europe, the Corporate Sustainability Reporting Directive, or CSRD, requires companies in scope to publish sustainability information using common European reporting standards. The first companies had to apply the rules for financial year 2024, with reports published in 2025.
In California, the Climate Corporate Data Accountability Act, known as SB 253, requires US-based companies doing business in California with more than US$1 billion in annual revenue to report Scope 1 and Scope 2 emissions beginning in 2026, and Scope 3 emissions beginning in 2027.
And then there is IFRS S2.
IFRS S2 is the climate disclosure standard issued by the International Sustainability Standards Board. Put simply, it asks companies to disclose climate-related risks and opportunities that could affect cash flows, access to finance, or cost of capital. It became effective for annual reporting periods beginning on or after 1 January 2024.
That last phrase is the one to underline.
Access to finance.
Cost of capital.
Not “nice sustainability story”. Not “PDF garnish”. Money.
The implications…
The first implication is financial.
Financed emissions are the greenhouse gas emissions linked to loans and investments. If a bank lends to a high-emitting company, those emissions become part of the bank’s own climate risk picture. Cynthia Lai explained this clearly on the podcast: banks are no longer looking only at their own operations. They are increasingly looking across their loan books and customer portfolios, adding emissions-related factors into risk assessment and credit scoring. Insurers are doing something similar across insured operations.
Then there is PCAF, the Partnership for Carbon Accounting Financials. PCAF develops greenhouse gas accounting standards for financial institutions, helping banks, investors, and insurers measure emissions associated with their financial activities. In 2025, PCAF updated its standards, including clearer guidance on financed emissions and insurance-associated emissions.
Insurance-associated emissions are the emissions linked to what insurers cover. That sounds technical until a company finds its insurance renewal becoming more expensive, more conditional, or harder to secure.
As Cynthia put it, if you cannot get your operations insured, getting financing becomes much harder because banks like protection. There’s a sentence that should be stuck beside every procurement dashboard in Europe.
The second implication is commercial trust.
Customers increasingly want evidence, not slogans. PwC’s 2024 Voice of the Consumer Survey found that consumers said they were willing to pay an average of 9.7% more for sustainably produced or sourced goods, even with cost-of-living pressures.
Now, stated willingness is not the same as actual checkout behaviour. Anyone who has ever watched a procurement process knows the gap between intention and purchase can be wide enough to drive a diesel HGV through.
But the direction is clear. Customers are asking sharper questions. B2B buyers are asking sharper ones again. Weak emissions data makes those conversations harder.
That has a cost.
Customer acquisition is expensive. Losing a tender because your emissions data is vague, unverifiable, or built on lazy averages does not just mean lost revenue. It means higher cost of sales. More time defending claims. More procurement friction. More legal review. More reputational drag. More work to win the next customer.
Retention matters too. Existing customers do not want to carry your climate uncertainty inside their Scope 3 inventory. If you cannot give them credible data, a competitor who can may suddenly look far more attractive.
The third implication is talent.
Deloitte’s sustainability research, reported in 2025, found that 63% of employees surveyed globally did not think their employers were doing enough on climate and sustainability, and 21% had considered changing jobs to work for a more sustainable company.
Again, intention does not always become action. Mortgages exist. Children eat. Careers are complicated.
But employer brand is now part of the climate credibility equation. Skilled people are expensive to recruit. Expensive to replace. Expensive to train. If a company says climate matters but cannot produce credible emissions data, that gap can become a recruitment problem, a retention problem, and eventually a cost problem.
The fourth implication is investor confidence.
EY’s 2024 Global Institutional Investor Survey found that 36% of investors were dissatisfied with company progress on nonfinancial reporting. Investors were especially disappointed in the materiality, comparability, and accuracy of sustainability data.
Accuracy.
Comparability.
Materiality.
These are not soft words. They are capital allocation words.
The strategies…
The first strategy is simple: move from averages to primary data.
In another Resilient Supply Chain conversation, John Beath defined primary data as data from the supplier actually making the product or material, rather than generic database averages or published studies. That means asking basic questions. What are the materials? How much do they weigh? Where did they come from? How were they transported? What energy was used? What waste was generated? What process created them?
This is not glamorous work. It will not make the keynote reel.
But it is where the truth lives.
The second strategy is to look where the carbon is, not where the optics are.
John gave a striking example of a company that had worked hard to remove styrofoam cups from a huge office site, while a tiny thermostat change would have had vastly greater impact. The point was not that visible actions are useless. The point was that visibility is a terrible proxy for materiality.
Corporate sustainability has a weakness for symbolic gestures. Cups. Posters. Reusable tote bags. Bamboo cutlery. The theatre is seductive. The carbon often sits elsewhere.
Raw materials. Process heat. Refrigerants. Freight. Product use. Waste. Supplier electricity. Aluminium. Cement. Steel. Plastics. Packaging. Returns. End-of-life treatment.
John also described a solar panel manufacturer that assumed silicon was the main footprint problem, only to discover the aluminium frame was the real hotspot. Switching frame material cut the product footprint in half.
Measure first. Moralise later. Ideally, much later.
The third strategy is supplier segmentation.
Start with the top 20% of suppliers likely driving 80% of emissions. Use spend data if that is all you have. Use industry averages as a first screen, not the final answer. Build a heat map. Identify hotspots. Engage the critical suppliers. Ask for primary data. Run pilots. Document improvement plans. Bring banks and insurers into the conversation before they bring you into theirs.
Cynthia Lai recommended exactly this pragmatic 80/20 approach, because perfect data delayed for years is just another form of inaction wearing a consultant’s lanyard.
The fourth strategy is to embed carbon into decision systems.
Procurement. Product design. Enterprise resource planning systems. Supplier onboarding. Freight routing. Contract renewal. Capital approvals. Product lifecycle management. Board dashboards.
Carbon data cannot live in a sustainability side-file, updated annually, with a prayer and a pivot table. It has to show up where decisions are made.
Interestingly, the purchase order may become one of the most important climate tools in the enterprise. Not the glossy sustainability report. Not the annual video with drone footage of trees. The purchase order. If it carries product carbon data, supplier energy mix, recycled content, logistics mode, and assurance status, it becomes a quiet machine for cutting emissions at scale.
The fifth strategy is disciplined use of AI.
AI can help classify supplier risk, detect anomalies, summarise regulation, spot missing data, prioritise supplier engagement, and map emissions hotspots. But it cannot magically convert poor data into truth. Bad data plus AI is still bad data, only now it arrives faster and with more confidence. A marvellous achievement, if the goal was industrialised self-deception.
The signal of change…
Capital is already moving.
The International Energy Agency’s World Energy Investment 2025 report estimated that global energy investment would reach US$3.3 trillion in 2025. Around US$2.2 trillion was set to go to renewables, nuclear, grids, storage, low-emissions fuels, efficiency, and electrification, twice the US$1.1 trillion going to oil, gas, and coal.
That tells us something important. The clean technology transition is not waiting for perfect consensus. It is being driven by economics, energy security, industrial strategy, customer demand, policy, and climate necessity.
Emissions data is becoming the accounting layer beneath that shift.
And the next frontier is already visible: financed emissions, insurance-associated emissions, facilitated emissions, and, very likely, enabled emissions.
Enabled emissions are the emissions made possible by a company’s products, services, technology, or expertise. Think of an AI system, software or cloud platform, consultancy, engineering service, or advertising campaign that helps expand fossil fuel production or high-carbon consumption. The concept is still developing, but the logic is clear. If your business helps others emit more, eventually someone will ask you to account for that.
That question may come first from regulators.
Or investors.
Or customers.
Or employees.
Or insurers.
Or banks.
Or all of them.
Back to the olive oil
A bottle of olive oil does not care about your emissions factor.
It does not care whether your Scope 3 model is elegant, approximate, outsourced, delayed, or trapped in a procurement portal designed by someone who appears to dislike suppliers personally. It responds to heat, rain, soil, water, labour, logistics, energy, and markets.
So does business.
That is the point.
Accurate emissions data is not about pleasing regulators. It is about seeing the system clearly enough to act before the system acts on you.
Customers want credible claims because their own supply chain data depends on yours. Employees and potential employees want evidence because they are deciding where to spend their time, skills, and credibility. Boards want risk clarity. Investors want comparable information. Banks want credit signals. Insurers want exposure data. Policymakers want accountability. Suppliers need direction and support.
The organisations that win will not be the ones with the prettiest averages. They will be the ones with the best primary data, the clearest hotspots, the strongest supplier engagement, and the courage to move capital from carbon-heavy inertia into cleaner, cheaper, more resilient systems.
Measure first.
Then act.
Then prove it.
That is how we cut emissions without cutting through credibility. And it is how supply chains become not just cleaner, but stronger.
For more on this, listen to the full Resilient Supply Chain conversations with Cynthia Lai and John Beath, where we unpack financed emissions, insurance-associated emissions, primary data, lifecycle assessment, and why carbon accounting only matters if it changes real decisions.
Photo credit Esencia Andalusí on Flickr
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