The Scope 3 Data Revolution

An international policy shift has been waiting in the wings – but it's about to take center stage. The EU Corporate Sustainability Reporting Directive (CSRD) came into force two years ago, but it will soon be a regulatory wake-up call for most large non-EU corporations. Zero100 analysis estimates that 75% of 317 public companies will be required to report for CSRD by 2027, with California’s Climate Corporate Data Accountability Act (CCDAA) adding urgency, too. 

This means large, global companies will soon be required to share not only the emissions that they generate (ie, Scope 1) and the emissions from the energy they purchase (ie, Scope 2) but also all Scope 3 emissions – those generated indirectly by suppliers, third-party manufacturers, 3PLs, and customers.  

The question is: Are you ready for this matryoshka-doll data conundrum?  

Scope 3 reporting is complex, but it’s also an opportunity in disguise. Our goal is to free you from complex jargon and allow you to do what you do best as supply chain leaders: drive operational excellence and make real progress. So here, we share a framework for capturing and acting on indirect emissions data.  

Let’s embrace the opportunity to strengthen data foundations and unlock wins all around.  

Data Schema

Specifics Over Standards   

The quality of your emissions calculation greatly depends on the specificity of both activity data and emission factors, with most organizations using one of three approaches for calculating indirect emissions: spend-based, average, or supplier-specific. (Find more details and definitions in the full report.) 

A recent Zero100 community discussion surfaced a desire to shift away from spend-based assumptions and averages to real-time data sharing, moving from “global and general” emissions factors to “local and specific” ones. For good reason: supplier-specific data provides a more accurate (and thus more actionable) picture of actual emissions. Even when comparing emissions calculations for a hypothetical sneaker, the supplier-specific calculation results in 21.5% lower emissions than the industry average calculation.  

The move from generic to specific indirect emissions tracking isn’t going to be easy. But it will be a journey that brings a new era of collaboration with suppliers.   

Data Management

Collaboration Over Compliance  

While you might notice some industry trends when it comes to indirect emissions, actual Scope 3 emissions tend to be highly individual to each company. But it can take months, even years, to establish the relationships and processes needed to collect the right data from your suppliers. We believe the right approach to indirect emissions demands two approaches – high-level measurement and granular measurement – in parallel.

• High-level measurement takes a broad baseline of the whole company to identify emissions hotspots, including less obvious emissions sources. Take BASF as an example – 28% of its emissions come from products’ end-of-life, which might push the company to target its biggest customers for engagement on emissions measurement and reduction.
• Granular measurement puts a specific product, process, project, or division under the microscope, unlocking a more precise view of reduction opportunities. You’ll need a set of internal resources that can build a baseline and manage this measurement with suppliers – PUMA’s sustainability team is one example of this. 

Data Automation

Action Over Accounting 

It’s no secret that digital leaders are leading on hitting their Scope 3 targets. In fact, digital leaders (the top quartile of companies when hiring most aggressively for digital skills) are 57% more likely to hit their SBTi targets than their less digital peers.  

But the Scope 3 emissions tracking tech landscape is vast. Cutting through the noise means focusing on the capabilities that will get you to n-tier visibility.  Zero100 assessed more than 30 vendors within the carbon accounting space on 17 capabilities. And while there are plenty of excellent providers for Scope 3 emissions tracking, three processes stand out as core challenges for supply chain leaders today: filling data gaps, supplier collaboration at scale, and decision intelligence. Find a selection of vendors excelling in delivering on these three capabilities in the full report.  

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While regulatory requirements might be a driving force for Scope 3 tracking and reporting, fast movers will also find an advantage in having even more data at their fingertips for strategic network-level decisions. Visibility is a supply chain superpower, and indirect emissions are just another data set for building a more complete picture of your value chain.    

This is our chance, as supply chain leaders, to not only address and mitigate the climate crisis but also revolutionize operations.

To access the full report, visit members.zero100.com. 

If you are not a Zero100 member, please email hello@zero100.com to inquire about membership and report access.