· 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.
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