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Insights to navigate the complexity of Scope 3 emissions reporting

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Forbes or enjoy below:

🗞️ Driving the news: The landscape for climate disclosures is evolving, with businesses increasingly required to report not only direct emissions (Scope 1 and 2) but also Scope 3 emissions, which account for the majority of their carbon footprint
This includes indirect emissions from their entire value chain, such as those from purchased goods and services and the use of sold products

Despite challenges in data collection and calculation, the International Sustainability Standards Board's mandate for Scope 3 disclosures marks a significant step towards comprehensive climate accountability

🔭 The context: Reporting on Scope 3 emissions, which can constitute over 70% of a company's total emissions, faces obstacles due to data scarcity and the complexity of tracking emissions across global supply chains 
Yet, analyses of thousands of companies reveal that many fail to report the most material Scope 3 emissions, often due to the difficulty of gathering data 
This gap in reporting undermines efforts to reduce greenhouse gas emissions meaningfully.

🌍 Why it matters for the planet: Accurate and complete Scope 3 reporting is crucial for identifying and addressing the most significant sources of emissions within a company's value chain
It allows for more targeted climate action and helps investors understand the full extent of carbon exposure in their portfolios 
Moreover, engaging with suppliers to reduce emissions is essential for achieving real-world decarbonization, especially as many suppliers in emerging economies or smaller businesses may lack the resources for comprehensive reporting

⏭️ What's next: To advance climate strategies and improve Scope 3 emissions reporting, companies, investors, and industry groups must collaborate more effectively 
Supporting suppliers in reducing their emissions and sharing best practices for engagement can drive significant progress 
Continuing to refine reporting methodologies and foster dialogue among all stakeholders is essential for overcoming the challenges of Scope 3 reporting and moving towards a more sustainable global economy

💬 One quote: "Navigating the complexity of Scope 3 is teamwork!" – Emphasizing the collective effort needed to enhance climate disclosure practices and achieve meaningful reductions in greenhouse gas emissions.

📈 One stat: Scope 3 emissions constitute over 70% of a company's total emissions, highlighting their critical role in comprehensive climate action strategies.

Click for more news covering the latest on corporate social responsibility

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