The global sustainability team at Unilever gets a lot of data requests. Customers need emissions numbers for Scope 3 reporting, for instance. And employees on other teams want to include sustainability metrics in bids for new business. 

Alongside these discrete asks, a genuinely substantial request lands around once a week. “Not just a one-off data point,” said team member Francesca Kennedy Wallbank. “This is a full questionnaire with multiple tabs and over 100 questions.”

Earlier this year, Wallbank wondered whether AI could help with this important but decidedly unexciting work. With the help of Unilever’s in-house AI experts, she uploaded a “knowledge bank” — a curated set of sustainability reports and other documents that contain answers to common questions — to Microsoft Copilot Studio, a tool used to build and manage AI chatbots. 

Then she began training her fledgling creation by firing questions at it. Wallbank and colleagues assessed each answer and passed the feedback to the AI team, which used the information to create successively more useful iterations of the chatbot. 

Gaps in the chatbot’s knowledge appeared as it fielded test questions. Some customer-facing employees, for example, wanted to know which Unilever products were covered by the European Union’s forthcoming Regulation on deforestation-free products (EUDR). “So we went to the regulatory affairs team to understand how Unilever is dealing with EUDR and then fed that back into the knowledge bank so it had the right information,” said Wallbank.

Going live

Around a month ago, the chatbot was ready to be shared with the rest of the company. “Rather than trying to find the right team and the right Excel document to review and understand the regulation, they now can be told the information instantly and then what their next step should be,” Wallbank explained.

As well as saving time, the chatbot also gives teams access to more data than would have been practical previously, which in turn allows them to strengthen bids in which sustainability is important. “By providing this more detailed data, we’re able to win more business,” Wallbank added.

Unlike publicly available AI systems, such as Claude and ChatGPT, the chatbot doesn’t look beyond its knowledge bank, which currently contains around 25 documents. Wallbank started by uploading company-level documents and is now working on adding more granular information, such as data the company collects on plastics, nature and specific products.

Despite the focus on carefully controlled information — the chatbot even accesses Unilever’s intranet — every answer comes with a link to its source, and users are advised to click through to verify the data before sharing it. The “heavy lift,” as Wallbank sees it, is finding the right data in the right documents. 

Support, not replace

There’s tentative evidence that AI is already causing some firms to scale back hiring in roles that AI has proven adept at, such as entry-level coding. But Wallbank pushed back on the suggestion that her chatbot might replace Unilever sustainability employees. “The idea is to support employees and to save time for important, high-quality tasks they weren’t able to do previously,” she argued. 

In the long term, she added, she imagines the AI itself being replaced: One of the next things she wants to work on is a centralized repository that customers can access without needing to ask Unilever.

“Where I would love to go is an industry coalition where we agree on the data that customers need and then we can automatically share this data with them,” Wallbank said. “So you don’t need this back and forth anymore. That is the future.”

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The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

In North America and Europe, there’s a battle regarding sustainability reporting and compliance. Opponents say onerous regulations will reduce profitability, while proponents claim that, left to their own devices, companies will ignore important societal goals such as tackling global warming, water pollution or health and safety issues.  

According to our research, both sides are right and wrong. We’ve examined the Sustainability Accounting Standards Board (SASB) standards (part of the International Sustainability Standards Board) and the Corporate Sustainability Reporting Directive (CSRD) to understand whether these standards can drive better societal performance and drive better financial performance.  

In general, reporting and compliance regulations aim to ensure that everyone in the business ecosystem plays by the same set of rules and that there’s accountability for how those rules are followed. In the best of worlds, those standards help improve corporate performance on a wide range of issues, from providing credible data to investors to reducing harmful toxic emissions.  

Unfortunately, our research finds that most ESG reporting requirements focus on outputs rather than outcomes and eschew targets. 

Our SASB findings 

With SASB, our report identifies three main challenges as currently constructed:  

• Most reporting metrics are activities/outputs rather than outcomes
• Most metrics are neutral or risk-focused rather than opportunity-focused 
• ESG reporting metrics neither integrate financial performance nor provide guidance on how to understand and drive better financial performance

Many companies and investors treat these metrics as the full scope of their sustainability efforts, but their design makes real progress unlikely. Our assessment shows that roughly 95 percent of SASB metrics focus on processes or outputs rather than measurable outcomes. Such activity-based measures reveal little about whether actions create societal or financial impact. For example, chemical companies must disclose how they engage with communities, yet this requires no specific actions or tracking of health outcomes.

The coal industry, for example, is required to report its Scope 1 emissions and the percentage covered under emissions-limiting regulations. It’s also required to “discuss” a strategy to “manage” its emissions (note, it does not say reduce) as well as set targets and discuss performance (all of which comes under discussion, so targets and performance reporting is not required). The industry isn’t required to set a target for reducing emissions, nor is it required to provide a baseline or show a link between reduced GHG emissions and lower energy costs, lower carbon fees and other financial metrics. So what can companies and investors really learn from this reporting?  

Our CSRD findings

The CSRD aims to better inform stakeholders by mandating double materiality and scenario planning. Both steps require strategic review of which ESG topics might drive better or worse financial performance as well as societal performance, which is a plus. However, our analysis finds different challenges with CSRD’s methodology:

• Its 1,000-plus required data points threaten to overwhelm users with immaterial information
• It lacks sector-specific standards (although there are plans to create them)
• Just five metrics explicitly measure positive financial outcomes rather than risk mitigation 
• It doesn’t provide a methodology or definitions for impact/risk/opportunity
• It doesn’t require targets   

These shortcomings inadvertently foster a lack of performance-based KPIs which would then limit sustainability-linked impact and value creation for companies and undermine the intended objectives of CSRD and other European reporting standards. 

While the regulation aims to enhance transparency and accountability for a company’s material impacts, it doesn’t mandate that companies set outcome-oriented targets. Instead, it requires disclosure only for targets that companies have already established. For any targets set, the regulation imposes a set of minimum disclosure requirements, including the nature and scope of the target, baseline value, baseline year, milestones and interim targets. 

So if a transportation company sets a target of 15 percent emissions reduction in five years, they would need to specify where the reduction is expected to take place, disclose the baseline emission levels and set annual target reductions. This would be useful information, although still not tied to financials (an ongoing weakness). However, if no such emission reduction target is set, these additional disclosures aren’t required. Therefore, the standard may actually disincentivize target setting as companies aim to avoid additional disclosure that could expose them to risks.

What practitioners can do 

As a result of these ESG reporting shortcomings, companies may collect data that’s not useful for making decisions. In fact, a common refrain at companies today is, “We need to spend our money on reporting, so we cannot spend money on sustainability execution.” In what world does this happen? In a world where metrics don’t require demonstration of performance or execution.  

Our dual reports on the two standards provide specific recommendations for improvement to both standard-setting bodies. At a high level, we recommend:

• Performance-based targets should be mandated for the most material impacts, risks and opportunities. These should include a baseline.
• Financial performance KPIs — both opportunities and risks — should be required and aligned with the most material targets.  

Even if reporting standards don’t improve, practitioners can still shift sustainability reporting from an onerous compliance checkbox to a strategic business exercise, by following the above recommendations and then mapping their sustainability KPIs to ESG reporting metrics. The following is an example which illustrates the proposed financial upside of decarbonization through improved energy management practices.

In summary, to make ESG reporting meaningful, standards must require outcome-based targets and aligned financial KPIs that clearly link sustainability performance to business value.

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Frontier, a carbon-removal buyers coalition founded by Google, McKinsey, Stripe and others, is investing $41 million in a startup that’s developed a “three-in-one” technology that can generate electricity or hydrogen while simultaneously capturing carbon dioxide.

The startup, Reverion, has already deployed its fuel cells on a handful of farms in Germany, where the cargo container-sized system uses biogas, a mixture of methane and CO2 derived from crop residues or manure, to generate electricity. 

The funding from Frontier will allow the company to add equipment to capture the CO2 emitted by the waste and the electricity-generation process. The gas will then be liquified and transported by road to a carbon storage hub.

‘One of the cheapest options’

Frontier’s investment will fund removal of 96,000 tons of CO2 between 2027 and 2030. 

The implied cost of the removals — $427 per ton of CO2 — is high by the standards of the voluntary carbon market, but consistent with Frontier’s mission to accelerate the development of carbon removal technology by funding early-stage projects. Frontier also requires portfolio companies to show a plausible path to selling removals at less than $100 per ton as their technologies scale.

“This is going to be one of the cheapest carbon removal options, because it is taking a pure stream of CO2 that would be there anyway,” said Hannah Bebbington Valori, Frontier’s head of deployment.

Reverion has a good chance of scaling its removals work because of demand from farmers for the electricity-generating part of the process, added Bebbington Valori: “The fact that this is a highly efficient electricity generating system that is driving revenue for farmers is a critical part of what we think is going to be Reverion’s success.”

Frontier’s progress since 2022

Bolting carbon removal technologies onto existing industrial processes is an increasingly popular strategy for a sector where capital expenditure costs are often high. Earlier this year, for example, Frontier backed two projects that capture CO2 emitted from wastewater and pulp-processing plants.

Frontier launched in 2022 with a commitment to buy an initial $1 billion of permanent carbon removal by 2030. It has since spent $670 million to fund 1.8 million tons of carbon removal. 

The Reverion deal is also being backed by Shopify, H&M Group and others. Several additional companies, including Canva, Wise, and Zendesk, participated via a partnership between Frontier and Watershed, a leading provider of carbon accounting software.

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Ashley Allen, an executive who helped shaped Oatly’s well-regarded sustainability strategy, has been named chief sustainability officer at Unifrutti Group, a fruit company based in Abu Dhabi.

Allen occupied the same position at Oatly from 2020 to 2024, during which time the maker of plant-based milks developed a reputation for helping farmers diversify their crops and for setting ambitious climate targets. The company is currently targeting a 40 percent cut in emissions per liter of product by 2030, followed by 70 percent and 89 percent cuts by 2040 and 2050. Earlier this year, it was one of the first two companies to be certified under the Climate Solutions Framework, a label for companies that develop low-carbon products.

Prior to joining Oatly, Allen spent much of her career working on climate strategy within the public sector, including stints at the U.S. State Department and the White House Environmental Council, where she helped launch President Barack Obama’s U.S. Climate Action Plan. 

Fledgling strategy

Allen inherits a sustainability agenda at Unifrutti that is relatively new. According to its most recent sustainability report, the company has measured its baseline emissions but not yet set a near-term target to complement its long-term goal of reaching net zero by 2050. The company plans on making an emissions commitment that’s aligned with the Science Based Targets initiative by the end of the year, according to the report.

Unifrutti produces and trades fresh fruit and vegetables, with Asia and Europe as its biggest markets. The privately held company does not publish detailed financial results, but a company website notes that it employs 11,000 people and has an annual turnover of $700 million.

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Chinese tech giant Tencent is investing tens of millions of dollars in innovation competitions in carbon removal and other areas as is it looks to cut emissions and define a role for itself as a sustainability leader. 

The company, which generated revenues of $92 billion in 2024 from messaging and payments platform WeChat and other products, has pledged to become carbon neutral by 2030 — with credits used to neutralize ongoing emissions — and net zero by 2050. Major U.S. tech firms, including Microsoft and Google, have similar goals and, like Tencent, are focusing on renewable energy as a core strategy. But Tencent is taking a different path with its additional focus on prizes.

“Our thesis is to accelerate low-carbon technology innovation by supporting first-of-a-kind pilot projects,” said Hao Xu, the company’s head of climate innovation.

Tencent’s first competition, CarbonX 1.0, opened to Chinese companies in 2023. The call for proposals elicited 300 entrants, from which 13 winners were awarded a total of $13 million. Winners included a modular direct air capture system developed at Zhejiang University and technology developed by the startup Feynman Dynamics that converts carbon dioxide into sustainable aviation fuel. 

The funding is designed to help young companies overcome the “valley of death” between laboratory work and commercialization — an issue Xu said Tencent identified as the “real bottleneck” to scaling emerging low-carbon technologies.

Partners get products to market

Alongside the financial support, Tencent is connecting winners with larger companies that can help bring products to market. One example: Suzhou Kunsheng Biodegradable New Material Company, which produces a foam for cushions made from captured carbon, is partnering with HAY, a Danish furniture maker that plans on using the foam in its products.

Last month, Tencent announced 50 finalists for CarbonX 2.0, a global competition with a $28-million prize pot that attracted more than 660 applicants from 54 countries. Entrants span CO2 removal, carbon capture in the steel industry, products made from captured carbon and long-duration energy storage. Product partners in this second phase include McDonald’s China and PepsiCo, with winners expected to be announced next year.

Another benefit: Carbon credits

The funding is designed to drive decarbonization across multiple sectors, but Tencent is also using the competitions to accelerate its own net-zero journey. To fulfill its 2030 carbon-neutral goal, for example, the company will need to retire around a million metric tons of carbon credits annually. Xu anticipates that some of the companies in the competitions will generate carbon credits that Tencent will sign offtake agreements for.

The company is also considering creating a third competition next year, likely smaller in scale, to incentivize commercialization of building materials, which would be used in the ongoing construction of its new headquarters in Shenzhen.

Tech-sector climate ambition

Companies in the U.S. and Europe also fund competitions, including a 2024 innovation challenge aimed at low-carbon materials that was backed by Microsoft. But the most prominent climate-related competitions have been led by XPRIZE, the nonprofit that oversaw a $100 million carbon removal prize and is now developing a methane mitigation competition. Tencent’s approach is notable in the private sector for both its scope and the size of the financial commitment.

The company’s investment in prizes extends its core climate strategy, which is focused on reducing emissions from data centers and other sources. Tencent’s commitment to cut operational emissions 70 percent by 2030 has been validated by the Science Based Targets initiative, alongside its goal to shave 30 percent off emissions from suppliers, product use and other indirect sources in the same timeframe. Longer-term, it’s targeting a 90 percent reduction across all sources by 2050.

Together with Tencent’s 2030 carbon-neutral goal, these targets roughly match the ambition of U.S. tech companies that are seen as leaders on climate, including Google and Microsoft. But Xu argued that the tech sector must pass the baton soon.

“If you look at the decarbonization journey for the whole planet, technology companies shouldn’t be the major force simply because their emissions are limited in absolute terms,” he said. “But we are inspired to be the risk-takers. What we can do is to push the technology forward.”

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