The landscape of Scope 3 reporting is shifting, with updates to Greenhouse Gas Emissions Accounting standards bringing greater levels of rigour to how companies calculate and disclose their impacts. Prof. Dr. Peter Saling, Director Sustainability Methods at BASF and Co-Chair of the Together for Sustainability (TfS) GHG emissions programme, discusses what these changes mean and how organisations can proactively align.
A tightening deadline for imperfect data
Calculating Scope 3 emissions, and mainly Scope 3.1 emissions, is a complicated endeavour and, today, most companies are still using imperfect data based on estimates or secondary databases to quantify their carbon footprint.
However, in a world where decisions and company reputation are increasingly dependent on honest, transparent disclosures, the demand for greater accuracy is on the rise.
In response, the GHG Protocol is working to update its Scope 3 standards in partnership with the International Organization for Standardization (ISO). This represents a seismic shift towards harmonised and jointly developed standards.
By creating a consistent framework for greenhouse gas (GHG) terminology, measurement and reporting, the collaboration will reduce market confusion, increase credibility and provide a trusted foundation for decision-making.
The ISO-GHG Protocol Partnership signals a decisive shift from acceptable approximation to the expectation of robust evidence based on harmonised and aligned standards.
No longer a distant compliance issue, accurate Scope 3 reporting, mainly for category 1, is becoming an imminent operational challenge, with direct implications for supplier relationships, reporting credibility and competitive positioning.
As a global chemical industry initiative, with a strong focus on Scope 3 upstream emissions challenges, TfS sees this inflection point as an opportunity for companies to address the change immediately and head on.
What is changing and why it matters now
The GHG Protocol was created to develop internationally accepted emission accounting and reporting standards and tools.
In tandem, the family of ISO 1406X standards is used by governments to develop legislation and regulation and provides the basis for GHG reporting and verification frameworks in many countries.
By promoting their adoption, the GHG Protocol and ISO aim to drive collective commitment for a global net zero economy.
With the GHG Protocol’s Scope 3 standards last updated in 2011, this latest revision indicates a clear direction of travel towards more complete, more transparent and more robust emission reporting.
The proposed updates suggest companies may have to account for a greater share of Scope 3 emissions, while significantly improving disclosures of methodologies and data sources.
But, beyond simply being a technical refinement, the changes will fundamentally raise the bar on how companies measure and substantiate emissions. No longer will averages or proxies alone be sufficient for determining upstream impacts – often the largest share of Scope 3 footprints.
Instead, companies will need to look to stronger value chain partnerships and greater investigative approaches to fully, or at the least to high extent, quantify those cradle-to-gate impacts with high-quality primary data.
A core shift
Meeting the new standards will require significant action and, to guide that activity, the GHG Protocol has defined three core areas that will underpin the transition:
Coverage: accounting for most emissions, leaving less room for exclusions.
Transparency: disclosing how numbers are calculated, not just what they are.
Data quality: prioritising supplier-specific primary data over secondary estimates.
By meeting these requirements, organisations can bring new levels of rigour to their calculations, moving emissions data in line with the standards of auditability and comparability already achieved for financials.
The question, then, is how can organisations best equip themselves for the level of data collection and validation required?
Why procurement becomes the critical lever
If the ask is that upstream emissions data becomes more granular, then the data must come from suppliers. And if it comes from suppliers, procurement – rather than sustainability, reporting or finance – is the function that must enable it.
While other teams may have responsibility for defining requirements and disclosures, procurement owns the relationships and processes that make compliance possible.
The GHG Protocol and ISO updates will transform the role of procurement leaders, shifting their focus from aggregating high-level estimates to enabling structured, repeatable data-exchange models across the entire supply network.
One practical way of doing this is by leveraging product-level emissions data – particularly Product Carbon Footprints (PCFs) – to determine the link between purchased goods and services and their associated emissions.
Bridging the gap from ambition to operational reality
While the expectations that apply to organisations may be clear, the assessment approaches required to meet them remain disparate.
Organisations will need to work closely with their suppliers – and industry peers – to produce accurate, comparable and high-quality data.
However, without alignment on how emissions are calculated and shared, even high-quality data is at risk of being inconsistent or unusable at scale.
It is not a gap any one company can bridge alone. It requires cross-industry effort, guided by common standards and systems that operate seamlessly across value chains. And this is where industry initiatives, such as Together for Sustainability (TfS), come in.
At TfS, we have developed standardised approaches specifically to address this disconnect with a focus on the chemicals industry. Our guideline for calculating PCFs is tailored to the complexity of chemical supply chains and was created in line with frameworks and standards such as the GHG Protocol and ISO.
The TfS PCF Exchange solution, too, enables companies and suppliers to efficiently exchange significant volumes of data, reducing fragmentation.
The narrowing window for action
ISO and the GHG Protocol may still be finalising their revised Scope 3 rules – with the completed standards set to be published in the next few years – but the direction they are setting is increasingly clear. And that means organisations have a valuable, but limited, window of time in which to prepare.
Some frontrunners are already taking practical steps, from engaging key suppliers on emissions transparency and piloting data collection approaches to aligning on calculation methodologies and training their systems to handle large quantities of product-level data from cradle-to-gate.
By following suit now, organisations can deftly navigate the risks of inaction: falling short of future compliance requirements and losing credibility with stakeholders.
Beyond compliance: a strategic capability shift
This transition is about keeping pace with stricter reporting rules, but it also represents a wider shift. By placing the same level of rigour on managing emissions as we do financial performance, the GHG Protocol and ISO are helping to accelerate ambitious and necessary climate action. And the companies that choose to act now can unlock myriad benefits too.
Alongside being better prepared for regulatory change, organisations that act early will gain deeper visibility into their supply chains, foster stronger supplier engagement and build a more credible foundation for decarbonisation.
Improvement potentials can be identified with a reliable, harmonised assessment approach and will lead to a reduction of PCF.
Moving from estimates to evidence signals a clear commitment to accountability and – in a landscape of tightening standards and rising expectations – those who build this capability first will set the benchmark for others to follow.
