Blue Map: Here's how emissions reporting data is supporting the global green transition

To help achieve Paris Agreement climate targets, large companies and financial institutions are stepping up their commitments to reduce carbon emissions and pollution, and become nature positive. But how to grapple with Scope 3 emissions, particularly that of supply chain, remains a global challenge that demands global cooperation.

What happens in China, the world’s largest manufacturing hub, merits special attention in terms of its rapid development and expansion of data and information reporting and disclosure.

It may serve as the prototype for a dynamic regional or even global data infrastructure with the depth and granularity that can help accelerate the greening of global manufacturing, sourcing and investment.

China is “historically” known for its severe air and water pollution that threatens public health. But what is less known to many is the massive clean-up actions that started with the expansion of ambient environmental monitoring and disclosure.

When set up in 2006, China's Institute of Public and Environmental Affairs (IPE) started to compile violation records but could only gather fewer than 2,000 then, despite the dire reality. Many polluters would rather bear the low cost of penalty fines than treat their waste at that time.

A decade-long endeavour to deploy the Pollution Information Transparency Index that assesses 120 cities has led to a milestone breakthrough – the number of violation records and penalty fines we compiled has topped 3 million, and tens of thousands of major air and water emitters are now required to report their online monitoring data every two hours, the first index of its kind in the world.

Access to environmental data has helped mobilize public supervision, strengthen government enforcements and enable market-based solutions. The multistakeholder clean-up actions have led to a significant reduction in air and water pollution in just one decade, with key atmospheric pollutant PM2.5 concentrations dropping by about 50% across major regions.

The surface water quality has also experienced improvement, when the monitored rivers and lakes with reported water quality worse than Category V, which is equivalent to water that is good for no use at all, dropped from 28% in 2006 to 0.7% in 2023.

Today, progress in environmental monitoring and information disclosure has enabled platforms like IPE’s Blue Map to track the performances of 16 million companies operating in China.

Using the Dynamic Environmental Performance Assessment (DEPA) tool, millions of corporations are graded using a colour-coded system and visualized on electronic maps. Such granular and dynamic data has become a unique resource for more efficient green supply chain and responsible investment management.

Some of the largest multinational and local brands have incorporated Blue Map data into their sourcing standards, motivating tens of thousands of suppliers to address their violations and/or measure and disclose their emissions.

In the last three years, major banks conducted green banking due diligence on 2.6 million corporations using the Blue Map data.

To extend the data infrastructure from pollution to carbon, we have launched the Blue Map for Zero Carbon, which collects regional carbon and energy data and corporate-level carbon emissions data.

The Ministry of Ecology and Environment (MEE) in China recently promulgated landmark regulations that put 83,000 large emitters on the list mandated to disclose a broad range of environmental data, including carbon emissions data by some key enterprises.

In alignment with Chinese regulatory requirements, as well as in synergy with the “updated” global environment, social and governance reporting schemes and frameworks such as those from the International Sustainability Standards Board, three Chinese stock exchanges – Shanghai, Shenzhen and Beijing – officially released Guidelines on Sustainability Reporting of Listed Companies (trial) in April 2024 (effective on May 1), a move hailed by many as a “defining moment”.

However, there remains a significant gap to bridge in China, and arguably in most part of the world – that is the current disclosure standards do not “cover” non-listed enterprises, especially small and medium-sized enterprises (SMEs), which generate Scope 3 carbon emissions that must be addressed.

Encouragingly the gap has caught the regulators’ attention. And IPE is assisting institutions in charge in formulating the General Guidelines for Corporate Carbon Disclosure, with the draft now in the process of soliciting public opinion and inputs.

We believe that solid and reliable environmental and carbon emissions data enable dynamic performance assessment that are key to create accountability and incentives. Since the signing of Paris Agreement, society has extended supply chain assessments to climate actions.

After China made its carbon peak and neutrality commitment in 2021, we further “upgraded” the Climate Information Transparency Index (CITI) framework into the Corporate Climate Action Index (CATI) and expanded the coverage to 742 brands and 880 listed companies.

To decarbonize Scope 3 emissions requires effective tools and instruments. To enable more cost-efficient corporate carbon emission management, we have developed and deployed our digital carbon calculator for suppliers of major brands to measure and report tens of millions of tons of carbon emissions.

Some major banks are now using this digital service too, aiming to measure the carbon footprints of more than 10,000 companies seeking loans by the end of this year.

In response to growing demand for product carbon footprints, we are working with other organizations to create a life cycle assessment (LCA) carbon emission factors database and a catalogue of product carbon footprints to enhance accessibility. The toolkit has begun to serve in Scope 3 carbon footprint measuring and reporting.

We are now extending our data and digital infrastructure to cover key topics of not only the environment and climate change but also plastic pollution, critical minerals and biodiversity.

China was the host country of COP15 for global biodiversity actions and it has elevated biodiversity protection to an unprecedented level of importance. It has established a redline zone management system that allocates 3 million square kilometres of land to eco-conservation.

Following this effort, provinces and cities have divided the land and coastal seas into tens of thousands of zones that are oriented for different functions and priorities. The Blue Map is currently digitally mapping these zones, and some major banks have already integrated the tool in their loan issuance evaluations.

Today, our Earth faces multiple planetary crises with the global emissions still rising. The Blue Map offers a lens of how data and information transparency in China has played its due role to accelerate green transition and decarbonization.

Enabled by IT technological capabilities, this leading environmental and climate digital infrastructure will continue to drive excellence and granularity, facilitate cooperative endeavours, and call for global partnerships to address Scope 3 emissions. This has become a globally shared priority.

IPE has launched one case study for Net-Zero Value Chain Support Hub under the World Economic Forum’s Alliance of CEO Climate Leaders. The hub aims to foster lasting value chain decarbonization by providing a first starting point, including helpful information, resources, and tools.

Looking forward, it is time for the international community to join hands to mobilize and deploy more resources for enhancing the environmental data management to accelerate the global green transition.

This article was written with World Economic Forum contributions from Sha Song, Specialist, China Partnerships; Songxian Jiang, Programme Specialist, China Climate Action; and Zihan Huang, AMNC Intern, China Climate Action.