Scope 3 emissions represent the largest share of most companies’ carbon footprint—often accounting for 70% to 90% of total emissions. Yet, by definition, they are outside the company's control and, therefore, are the most challenging to measure and manage. With growing regulatory scrutiny, stakeholder expectations, and the sheer complexity of emissions tracking, companies are now at a crossroads: Is the effort to track and reduce Scope 3 emissions genuinely worth it, or are we getting lost in the data?
Understanding Scope 3: a significant but uncontrollable factor
In contrast to Scope 1 and Scope 2 emissions, which companies can directly control through their operations and the electricity they buy, Scope 3 emissions encompass the entire value chain, including upstream and downstream activities. This lofty category includes everything from supplier emissions in raw material production to the energy consumed when customers use a company’s products—because of the size, addressing these emissions is crucial.
This also explains why companies struggle to track Scope 3 emissions: much of it is outside their direct control. How do you manage emissions from thousands of suppliers or influence how end-users interact with your product?
The challenge: why Scope 3 tracking is so difficult
The biggest hurdles in Scope 3 emissions tracking stem from data collection and standardization.
Supplier data gaps
Many businesses rely on suppliers for emissions data or plan to increase data from suppliers. However, these suppliers may lack the infrastructure, expertise, or incentive to provide accurate information. Procurement teams often hesitate to pressure suppliers for this data because of concerns it may strain business relationships.
Inconsistent measurement approaches
Companies use different methods, from spend-based estimates to detailed lifecycle assessments, leading to inconsistencies. While spend-based models provide a broad picture, they lack granularity. More precise methods, such as product carbon footprints (PCFs), require deep supplier engagement and standardized databases, which are still evolving.
Lack of information
For downstream categories related to the use and final disposal of products, data are even harder to gather than supplier- or investment-related emissions because the burden is on the customer to report. Therefore, these emissions often are developed based on assumptions about customer behavior, product use, and disposal.
Avoiding data paralysis: a smarter approach to Scope 3
The risk many sustainability teams face is spending excessive time on measurement at the expense of actual emissions reduction. The critical thing to remember is not to let the perfect be the enemy of the good. While data accuracy is essential, companies should focus on directional correctness—ensuring estimates are reasonable and prioritizing the most significant emissions sources rather than striving for perfection.
Some practical strategies include:
- Use estimates wisely: Spend-based calculations use financial data, which is often readily available to estimate emissions in the value chain. This approach can help identify areas where emissions may be higher. While the emissions estimate is imperfect, it can offer a starting point for understanding emissions hotspots, leading to identifying areas to focus efforts and action.
- Follow the 80/20 rule: Identify the top 20% of suppliers or product lines contributing to 80% of emissions and focus interventions there.
- Leverage industry-specific data: Some sectors, such as apparel (Higg), electronics (RBA), and construction (ICE), have specialized emissions factor databases that provide benchmarks to many reporting companies in the industry based on focused requests to suppliers, decreasing their survey fatigue.
- Collaborate rather than compete: Many industries hesitate to share emissions data due to competition concerns. However, working together can accelerate supply chain decarbonization, which benefits everyone in the long run.
From data collection to decarbonization
The ultimate goal of emissions tracking is not reporting—it’s decarbonization. This focus requires a mindset shift from being data detectives to real drivers of impact and change. Companies that successfully engage suppliers and design products to encourage their customers to help them reduce their emissions will make the most significant impact.
Practical strategies for engaging with suppliers include:
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1. Meeting suppliers where they are
Instead of demanding immediate compliance, assess suppliers’ current emissions capabilities and help them improve.
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2. Focusing on high-emission areas
Prioritize suppliers in sectors with high carbon footprints, such as steel, cement, and chemicals.
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3. Providing incentives
Offering financial incentives or long-term contracts for sustainability improvements can drive supplier participation.
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4. Using clear reporting frameworks
Leveraging guidance like the Greenhouse Gas Protocol will help structure emissions data collection.
Some companies are already setting strong examples. BASF, for instance, has embedded sustainability into its supply chain through a supplier code of conduct and a “Together for Sustainability” initiative. Meanwhile, competitors Google and Microsoft have partnered to increase demand and scale procurement of renewable energy. It’s not only corporations; see one of the UK's National Health Service Trust's Green Plan as a transparent example of a Net Zero target achievement roadmap.
The regulatory landscape: what’s next for Scope 3?
While voluntary efforts have been underway for more than a decade, regulatory pressures are real but remain in flux. The SEC initially proposed mandatory Scope 3 disclosure but has since rolled back some requirements due to legal and political challenges. Meanwhile, the Greenhouse Gas (GHG) Protocol is undergoing major updates that may enable change in some approaches to GHG accounting, including Scope 3.
At the same time, technological advancements are shaping the future of emissions tracking. Software solutions, AI-driven data collection, blockchain-based verification systems, and enhanced emissions modeling tools will likely make Scope 3 tracking more efficient in the coming years.
Conclusion: taking action in an imperfect system
Determining whether Scope 3 is worth the effort isn’t straightforward, but there are tried and proven ways to evaluate the impact with limited effort. Although monitoring these emissions presents challenges, companies that overlook Scope 3 may face financial risks, regulatory fines, and harm to their reputation.
Instead of striving for perfect data, businesses should focus on directionally correct estimates, targeted supplier engagement, and sector-wide collaboration. The key is to measure enough to take action—and then move forward.
With continued investment in innovative data collection, emerging AI tools, and industry cooperation, the future of Scope 3 accounting is set to become more manageable. For companies that start taking meaningful action now, the benefits will extend far beyond compliance, driving true decarbonization in the economy.
About our author
Katie Eisenbrown has over 15 years’ experience specializing in GHG accounting, supporting 80+ organizations to quantify and manage their Scope 1, 2, and 3 emissions and report on their impacts and ambitions. Her expertise also includes helping organizations set science-based and net-zero-focused targets for their emissions and implement decarbonization strategies.
