Businesses must get to work on Scope 3 emissions

Businesses will soon be expected to report on their Scope 3 emissions. To be more precise, they will need to obtain carbon emissions data from their suppliers, customers and logistics service providers. Sending them lengthy questionnaires isn’t going to work. Various start-ups offer a solution in the shape of smart tools that ease the burden on companies and their supply chain partners. 

Sustainability is rapidly changing from optional to compulsory. Take the Corporate Sustainability Reporting Directive (CSRD), announced by the European Commission on 21 April last year. This directive is an extension of the Non-Financial Reporting Directive (NFRD), which requires listed companies with more than 500 employees to report on issues such as environmental pollution, human rights and diversity. From 2024 onwards, such companies will have to report on numerous issues, including carbon emissions both upstream and downstream in their supply chain.

The impact of this measure is not limited to large public companies. As of 2025, the CSRD will also apply to other companies that meet two of the following three conditions: more than €20 million on the balance sheet, more than €40 million net sales and/or more than 250 employees. An estimated 49,000 companies in the European Union will soon have to provide insight into emissions throughout their supply chain. And as another sign that sustainability is becoming increasingly compulsory, the information they include in their sustainability reports must be verified by an accountant.

Over the past year, people have increasingly been talking about ‘Scope 3 emissions’ in relation to the carbon emissions in the upstream and downstream supply chain. Scope 3 concerns emissions from a company’s supply chain partners such as suppliers, logistics service providers and customers. Unlike Scope 1 and Scope 2 emissions, the company has no direct influence over these emissions. In contrast, Scope 1 covers the emissions that are the direct result of the company’s own activities… … …

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