Is your climate data credible, or just creative? How to avoid the Greenwashing trap

Jul 22

In an era where sustainability claims are under intense scrutiny, carbon data has shifted from being a back-office task to a front-line signal of corporate credibility. Regulators, investors and customers now ask not only what your emissions are, but how you calculated them. In this context, the quality of your climate data is no longer a technical detail, it is a public test of trust.

The risk of greenwashing is real. But the solution lies not in clever messaging, but in verifiable measurement.

The illusion of accuracy

Many companies still use spend-based methods to estimate their carbon footprint, applying average emissions factors to financial expenditures. These calculations may be convenient, but they are imprecise and can miss key variables like supplier behaviour and logistics choices.

According to the Greenhouse Gas Protocol, spend-based methods should be treated as a fallback, not a foundation. They are ranked as the lowest tier in the hierarchy of data quality, to be used only when better, activity-based or supplier-specific data is unavailable (GHGP, Scope 3 Guidance, pp. 15–16).

In short: what you spent tells you little about what you emitted.

When good intentions turn risky

Even well-meaning sustainability reports can become a reputational liability. Rounded figures, broad averages, or untraceable estimates may appear compliant, but they expose companies to accusations of inaccuracy or greenwashing, especially when disclosures lack source transparency.

This is no longer just a reputational issue. In the EU, draft legislation under the Green Claims Directive aims to ban environmental claims that cannot be substantiated with detailed evidence (European Commission).

What credible reporting looks like

Credible climate data has three essential qualities:

Rooted in real activity: based on actual usage, purchases and logistics, not proxy figures
Continuously updated: not a once-a-year estimate
Fully traceable: so that figures can be audited back to primary sources

This approach aligns with leading frameworks including the Greenhouse Gas Protocol, the WRI’s Scope 3 reporting guidance, and even U.S. EPA best practices, which recommend using supplier-specific, activity-based data where possible (WRI, EPA).

Why full coverage matters

Leading standards make it clear: companies should strive for complete emissions coverage, using primary data across their value chain. Reporting on only the largest or most convenient segments leaves blind spots that can distort both insight and strategy.

As the GHG Protocol notes:

"Companies should prioritise the use of primary data... across all relevant activities" — Scope 3 Technical Guidance, p. 16

Thanks to automation and integration, achieving 100 % data coverage, supplier by supplier, transaction by transaction, is now realistic and scalable.

From reporting to responsibility

Sustainability reports once served as retrospective documents. But today, responsibility means knowing your footprint in real time and being able to show how it was calculated.

With accurate, activity-based systems, companies can:

Track emissions to specific suppliers or product lines
Identify carbon hotspots and target them with precision
Share credible data with customers and regulators
Integrate emissions into procurement, budgeting and pricing

The business case for credibility

Verified, traceable data is now a competitive advantage. Many enterprise clients and investors expect supplier-level transparency. Emissions credibility can determine whether you win the next contract or become subject to enhanced due diligence.

Conversely, disclosures that lack rigour can be challenged by watchdogs, regulators or the media. For example, the Financial Times reports increasing scrutiny from both regulators and civil society on inflated or vague climate claims (FT).

Final thought: If you cannot trace it, can you trust it?

The climate crisis demands transparency, and transparency begins with traceable, high-quality data. Whether you are reporting to comply or aiming to lead, the key question remains: is your data something you can prove, or something you hope won’t be questioned?

There are no shortcuts to trust. But there is a clear path: real data, gathered in real time, from the real activities that drive your business.