{"id":68717,"date":"2025-03-14T14:13:53","date_gmt":"2025-03-14T14:13:53","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=68717"},"modified":"2025-09-07T19:09:39","modified_gmt":"2025-09-07T18:09:39","slug":"neglecting-scope-3-emissions-could-sink-corporate-climate-action","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2025\/03\/14\/neglecting-scope-3-emissions-could-sink-corporate-climate-action\/","title":{"rendered":"Neglecting &#8216;Scope 3&#8217; emissions could sink corporate climate action"},"content":{"rendered":"\n<p><strong>In 2024, carbon emissions hit a record high, with more than 41 billion tonnes of planet-heating CO2 pumped into the Earth\u2019s atmosphere. From aviation to agriculture, every industry contributed a share of those emissions, mainly through the use of fossil fuels.<\/strong><\/p>\n\n\n\n<p>If the world is to start reducing emissions and reach net zero in the second half of the century, as promised under the Paris climate agreement in 2015, we need to know exactly where those emissions are coming from. Crunching the data offers up estimates of which sectors release the most greenhouse gases &#8211; but this is a far harder task at the corporate level.<\/p>\n\n\n\n<p>There are the major fossil fuel firms, both state-run and private &#8211; such as Shell, Saudi Aramco, ExxonMobil or Coal India &#8211; which we know play an <a href=\"https:\/\/carbonmajors.org\/briefing\/The-Carbon-Majors-Database-2023-Update-31397\" target=\"_blank\" rel=\"noreferrer noopener\">outsized role<\/a>. But according to the World Bank, <a href=\"https:\/\/www.worldbank.org\/en\/topic\/smefinance\">90% of global businesses<\/a> are small and medium-sized enterprises.<\/p><div class=\"clima-in-post\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"clima-1301830232\"><div style=\"text-align:center; margin: 20px 0;\">\r\n  <div style=\"display: flex; align-items: center; justify-content: center; margin-bottom: 8px;\">\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n    <span style=\"font-family: Open Sans, sans-serif; font-size: 12px; color: #BFBFBF; text-transform: uppercase; letter-spacing: 1px;\">Advertisement<\/span>\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n  <\/div>\r\n\r\n  <div id=\"chn-in-post\"><\/div>\r\n<\/div>\r\n<script defer src=\"https:\/\/ead.newint.org\/show.php?zones=chn-in-post\"><\/script>\r\n<\/div>\n\n\n\n<p>Understanding their environmental impact &#8211; and how they contribute to the emissions of larger companies further up the value chain &#8211; is complex but essential if climate action goals set by both governments and the private sector are to be met, experts say.<\/p>\n\n\n\n<p>While businesses have long been aware of the need to curb their emissions, the process of collecting data on their supply chains, and knowing what to do with it, can serve as a <a href=\"https:\/\/sciencebasedtargets.org\/blog\/scope-3-stepping-up-science-based-action\" target=\"_blank\" rel=\"noreferrer noopener\">barrier to action<\/a>. And without regulation to make companies set and meet targets to reduce their carbon pollution, monitoring and analysing emissions has so far been a voluntary effort.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Problem with a wide scope <\/h2>\n\n\n\n<p>The first attempt to properly account for company-level emissions started almost 25 years ago with the Greenhouse Gas Protocol. Its <a href=\"https:\/\/ghgprotocol.org\/corporate-standard\">corporate standard<\/a> was developed in 2001 in response to the UN\u2019s Kyoto Protocol on limiting the emissions of wealthy countries, and covered reporting of the seven greenhouse gases covered by that agreement.<\/p>\n\n\n\n<p>The GHG Protocol was formed by two non-profit organisations: the World Resources Institute and the World Business Council for Sustainable Development. Its work has become a standard bearer in the field of carbon accounting, with its guidance used by thousands of corporations, and updates to its rules closely followed.<\/p>\n\n\n\n<p>The protocol\u2019s lasting contribution was to create the concept of \u2018scopes\u2019, which separate a company\u2019s emissions into three distinct categories. Scope 1 covers all emissions from direct sources a company owns or controls. Scope 2 is indirect emissions from purchasing energy. Scope 3 emissions are all other indirect emissions within a company\u2019s supply chain.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong><a href=\"Comment: SBTi needs tighter rules on companies\u2019 indirect emissions\">Comment: SBTi needs tighter rules on companies\u2019 indirect emissions<\/a><\/strong><\/p>\n<\/blockquote>\n\n\n\n<p>Defining Scope 3 &#8211; and how to adequately account for and offset those emissions &#8211; has proved a difficult task. These emissions can include everything from business travel to a company\u2019s financial investments. The GHG protocol has 15 separate categories on Scope 3 emissions, reflecting the wide range of where they might be found.<\/p><div class=\"clima-in-post-2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"clima-1807628864\"><div style=\"text-align:center; margin: 20px 0;\">\r\n  <div style=\"display: flex; align-items: center; justify-content: center; margin-bottom: 8px;\">\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n    <span style=\"font-family: Open Sans, sans-serif; font-size: 12px; color: #BFBFBF; text-transform: uppercase; letter-spacing: 1px;\">Advertisement<\/span>\r\n    <hr style=\"flex: 1; max-width: 80px; border: none; border-top: 1px solid #ccc; margin: 0 10px;\">\r\n  <\/div>\r\n\r\n  <div id=\"chn-in-post-2\"><\/div>\r\n<\/div>\r\n<script defer src=\"https:\/\/ead.newint.org\/show.php?zones=chn-in-post-2\"><\/script>\r\n<\/div>\n\n\n\n<p>These categories are themselves divided into \u2018upstream\u2019 and \u2018downstream\u2019; for example, upstream could include the use of any vehicle a company doesn\u2019t own but is in the service of its business. Downstream can cover activities such as how products are treated at the end of their life.<\/p>\n\n\n\n<p>\u201cScope 3 has proven to be one of the most challenging topics to be addressed among the business community,\u201d said Ramiro Fernandez, campaign director at Race to Zero, a UN-backed climate campaign. \u201cFor years the climate business community has been developing methodologies and metric frameworks to account for the emissions of companies&#8217; value chains.\u201d<\/p>\n\n\n\n<p>The knottiness of the issue means that many companies are reluctant to engage with tackling this category of emissions. A 2024 <a href=\"https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/us\/Documents\/audit\/2024-sustainability-action-report.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">survey<\/a> of 300 large public companies by consultancy firm Deloitte found that while three-quarters disclose their Scope 1 emissions, and around half Scope 2, the figure falls dramatically to 15% for Scope 3.<\/p>\n\n\n\n<div class=\"flourish-embed flourish-chart\" data-src=\"visualisation\/22091221\"><img decoding=\"async\" src=\"https:\/\/public.flourish.studio\/visualisation\/22091221\/thumbnail\" width=\"100%\" alt=\"chart visualization\" \/><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Threat to 1.5C goal<\/h2>\n\n\n\n<p>Sustainability experts warn that ignoring Scope 3 emissions is self-defeating and puts at risk the Paris Agreement goal of limiting global temperature rise to 1.5C above pre-industrial times, given that an <a href=\"https:\/\/cdn.cdp.net\/cdp-production\/cms\/guidance_docs\/pdfs\/000\/003\/504\/original\/CDP-technical-note-scope-3-relevance-by-sector.pdf\">estimated 75%<\/a> of the average company\u2019s emissions fall into that category, according to CDP, a non-profit that helps businesses disclose their environmental impact.<\/p>\n\n\n\n<p>\u201cIf we fail to address Scope 3, corporate net-zero pledges cannot be achieved,\u201d said Sanda Ojiambo, CEO and executive director of the UN Global Compact, a voluntary initiative supporting sustainability in business.<\/p>\n\n\n\n<p>\u201cMost business-related emissions come from Scope 3, which means neglecting them keeps us on a dangerous path to exceeding 1.5C [of global warming],\u201d she added.<\/p>\n\n\n\n<p>The Science Based Targets initiative, originally set up to ensure that corporate climate plans are in line with the Paris Agreement, <a href=\"https:\/\/sciencebasedtargets.org\/companies-taking-action\" target=\"_blank\" rel=\"noreferrer noopener\">has approved<\/a> 7,000 targets over the past 10 years. Notably, the initiative requires all companies to include Scope 3 emissions in their long-term emissions reduction targets.<\/p>\n\n\n\n<p>Ojiambo told Climate Home the UN Global Compact is working with thousands of businesses to ensure that Scope 3 emissions are \u201cno longer an afterthought but a core pillar of corporate climate strategies\u201d.<\/p>\n\n\n\n<p><a href=\"Comment: SBTi\u2019s rigid emissions rules don\u2019t reflect business reality\"><strong>Comment: SBTi\u2019s rigid emissions rules don\u2019t reflect business reality<\/strong><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">In tech we trust<\/h2>\n\n\n\n<p>The thorny challenge of reducing Scope 3 emissions has given rise to a host of solutions aimed at making it easier. Ways to tackle the problem include engaging with suppliers, investing in data collection and using technology to track emissions across the whole life cycle of products.<\/p>\n\n\n\n<p>German software company SAP, for example, is attempting to integrate carbon data with financial data to create a \u201cgreen ledger\u201d. This system assigns carbon emissions to a company\u2019s transactions, with a dashboard showing the impact of greenhouse gas intensity on operating income, gross margin and net revenue. The hope is that this process will generate real-world numbers rather than relying on estimates, as most businesses do today.<\/p>\n\n\n\n<p>James Sullivan, global head of product management at SAP Sustainability, said the software will \u201cchange business practice\u2026 to accurately account for, analyse and report carbon footprints\u201d. The ledger is the latest in a range of data-driven services the company and its peers are putting into the market to help businesses wrestle with emissions that are beyond their immediate control.<\/p>\n\n\n\n<p>Locating accurate data on all Scope 3 emissions &#8211; and then calculating how they have reduced over time &#8211; can seem like a Herculean task. Where data gaps exist, the GHG Protocol <a href=\"https:\/\/ghgprotocol.org\/sites\/default\/files\/2022-12\/Scope%203%20Detailed%20FAQ.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">advises<\/a> using secondary data based on industry averages, government statistics, or public databases that are representative of a company\u2019s activities. But using such generic data at scale may not provide an accurate picture of emissions or the impact of corporate action to stem them.<\/p>\n\n\n\n<p>Sullivan believes that better data is key to solving the Scope 3 puzzle. \u201cA major advancement is the widespread understanding that managing Scope 3 emissions requires high-quality data and transparency into supply chains,\u201d he said. \u201cIt is crucial for businesses to integrate sustainability data into core business processes.\u201d<\/p>\n\n\n\n<div class=\"chn-block block-image\">\n\n    <figure class=\"\" uk-toggle=\"target: #simg-68718\" >\n        <img decoding=\"async\" src=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure.jpg\" srcset=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure.jpg 1962w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure-960x640.jpg 960w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure-1440x961.jpg 1440w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure-480x320.jpg 480w\" \/>\n            <\/figure>\n\n    <div id=\"simg-68718\"  class=\"uk-modal-container\" uk-modal>\n        <div class=\"uk-modal-dialog uk-margin-auto-vertical\">\n\n            <button class=\"uk-modal-close-default\" type=\"button\" uk-close><\/button>\n\n            <div class=\"uk-modal-body\">\n\n                <figure>\n                    <img decoding=\"async\" src=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure.jpg\" srcset=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure.jpg 1962w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure-960x640.jpg 960w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure-1440x961.jpg 1440w, https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/Figure-480x320.jpg 480w\" \/>\n                                    <\/figure>\n\n            <\/div>\n\n        <\/div>\n    <\/div>\n\n<\/div>\n\n\n\n\n\n\n\n<h2 class=\"wp-block-heading\">Getting ahead of competitors<\/h2>\n\n\n\n<p>Companies like SAP are confident their technological solutions are having a tangible impact on that front. Sullivan pointed to one of its customers, Martur Fompak International, a Turkish supplier of seats for the automotive sector. As a result of using SAP\u2019s technology, Sullivan said the company has reported a 52% reduction in transportation-related carbon emissions and a 34% decrease in emissions linked to its automotive seats.<\/p>\n\n\n\n<p>Martur Fompak achieved this, in part, through tracking emissions across its products\u2019 entire lifecycle, from where the materials were sourced to where they were sent and used. The software analysed the carbon footprint of different fabrics and suggested lower-impact alternatives. It also provided real-time monitoring of the company\u2019s energy consumption at more than 600 work centres, and created new delivery routes for its drivers.<\/p>\n\n\n\n<p>Ojiambo noted that many large companies are making emissions reductions a condition of doing business with them and weaving such criteria into their procurement contracts. This could give suppliers like Martur Fompak a major incentive to lower their emissions in order to gain a competitive edge.<\/p>\n\n\n\n<p>&#8220;Suppliers are feeling the pressure, but the smartest ones see this as an opportunity rather than a burden,\u201d she added.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Business contribution to NDCs<\/h2>\n\n\n\n<p>The current global political climate has made sustainability concerns a convenient punchbag, with US President Donald Trump\u2019s anti-green agenda already encouraging many companies to scale back their environmental ambitions. Across the Atlantic, the European Commission is <a href=\"https:\/\/www.politico.eu\/article\/most-eu-firms-exempted-from-green-reporting-under-proposed-omnibus-bill\/\" target=\"_blank\" rel=\"noreferrer noopener\">planning to<\/a> water down a package of sustainability rules originally intended to be world-leading.<\/p>\n\n\n\n<p>The mood music is not exactly positive. According to the Financial Times, some participants at January\u2019s World Economic Forum in Davos <a href=\"https:\/\/www.ft.com\/content\/60b037b0-c045-48cc-b060-0d2c65261e64\" target=\"_blank\" rel=\"noreferrer noopener\">reported<\/a> that ambition around tackling Scope 3 emissions was \u201ccrumbling\u201d among business executives.<\/p>\n\n\n\n<p>This comes at a time of <a href=\"https:\/\/www.climatechangenews.com\/2025\/01\/10\/2024-hottest-year-record-1-5-eu-climate-service-copernicus\/\" target=\"_blank\" rel=\"noreferrer noopener\">record heat<\/a> and more frequent extreme weather events, when scientists are concerned at the pace of change in the Earth\u2019s climate and its effects. To tackle this, countries are due to submit stronger national climate plans by September, including emissions reduction targets for 2035, as required by the Paris Agreement.<\/p>\n\n\n\n<p>These plans, known as Nationally Determined Contributions (NDCs), are a clear example of where businesses could play a bigger role in supporting government efforts to fight climate change but currently lack the capacity, partly due to a lack of data and other resources.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong><a href=\"https:\/\/www.climatechangenews.com\/2023\/11\/29\/how-can-corporates-course-correct-on-climate\/\">How can corporates \u2018course correct\u2019 on climate?<\/a><\/strong><\/p>\n<\/blockquote>\n\n\n\n<p>Tom Cumberlege, a director at The Carbon Trust, who leads the consultancy\u2019s work on value chain analysis and strategy, said NDCs that are able to leverage both public and private funding for implementation \u201ccould be a win-win\u201d for governments and businesses.<\/p>\n\n\n\n<p>\u201cIt can reduce the risk of investing in projects &#8211; such as energy efficiency improvements or renewable assets in the supply chain &#8211; and contribute to effective emissions reductions at a national level,\u201d he explained.<\/p>\n\n\n\n<p>Achieving NDC targets will require businesses to align their own climate action plans with those of governments and their suppliers. \u201cCompanies have an increasingly important role to play in engaging and supporting their own value chain to be part of the contribution [to NDCs],\u201d said Fernandez of Race to Zero.<\/p>\n\n\n\n<p>\u201cTransitioning to net zero requires a whole of society approach,\u201d he added. \u201cEven with all the uncertainties and lack of clarity, companies have to reduce their Scope 3 emissions if we want to have any chance of remaining within the 1.5C threshold.\u201d<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"For years, businesses have been wrestling with how to reduce emissions outside their direct control. The task remains complicated","protected":false},"author":133,"featured_media":68719,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4086],"tags":[4,440,5361],"project_category":[],"membership_period":[5489],"coauthors":[4926],"class_list":["post-68717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sponsored","tag-business","tag-emissions","tag-scope-3","membership_period-forever-free"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Neglecting &#039;Scope 3&#039; emissions could sink corporate climate action<\/title>\n<meta name=\"description\" content=\"For years, businesses have been wrestling with how to reduce emissions outside their direct control, also called &#039;Scope 3&#039;.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.climatechangenews.com\/2025\/03\/14\/neglecting-scope-3-emissions-could-sink-corporate-climate-action\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Neglecting &#039;Scope 3&#039; emissions could sink corporate climate action\" \/>\n<meta property=\"og:description\" content=\"For years, businesses have been wrestling with how to reduce emissions outside their direct control, also called &#039;Scope 3&#039;.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.climatechangenews.com\/2025\/03\/14\/neglecting-scope-3-emissions-could-sink-corporate-climate-action\/\" \/>\n<meta property=\"og:site_name\" content=\"Climate Home News\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ClimateHomeNews\/\" \/>\n<meta property=\"article:published_time\" content=\"2025-03-14T14:13:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-09-07T18:09:39+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.climatechangenews.com\/wp-content\/files\/2025\/03\/marcin-jozwiak-T-eDxGcn-Ok-unsplash.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"666\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Adam Wentworth\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ClimateHome\" \/>\n<meta name=\"twitter:site\" content=\"@ClimateHome\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Adam Wentworth\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"8 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.climatechangenews.com\\\/2025\\\/03\\\/14\\\/neglecting-scope-3-emissions-could-sink-corporate-climate-action\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.climatechangenews.com\\\/2025\\\/03\\\/14\\\/neglecting-scope-3-emissions-could-sink-corporate-climate-action\\\/\"},\"author\":{\"name\":\"Adam Wentworth\",\"@id\":\"https:\\\/\\\/www.climatechangenews.com\\\/#\\\/schema\\\/person\\\/16b08c1c6922ab9b94395e6aaefc9528\"},\"headline\":\"Neglecting &#8216;Scope 3&#8217; 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