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Amounting for approximately 70% of a typical business’ emissions inventory, Scope 3 emissions are a crucial component of comprehensive carbon management systems and decarbonization. Regulators in the US are increasingly focusing on Scope 3, but potentially more pressing to many leaders is investor activism. Boeing, Chevron and General Electric have been on the receiving end of successful shareholder resolutions asking for Scope 3 disclosures. But tracking emissions up and down value chains is a technical and logistical headache.
The Center for Audit Quality found that only a third of firms in the S&P 500 currently disclose their full Scope 3 emissions across all relevant categories. This creates a reporting gap as large as 13.2 billion tonnes of CO2 equivalent emissions. Reporting organizations cite the logistical resources required to collate complex emissions sources, insufficient data granularity and a lack of supply chain/value chain transparency.
To address this challenge, several carbon management software vendors have updated existing products and developed specific software to alleviate the challenges of Scope 3 management and take the guesswork out of emissions tracking:
Solutions using a Lifecycle Assessment approach increase the breadth of achievable Scope 3 data collection.
AI solutions increase data accuracy and granularity through automated allocation of emissions factors.
Vendors including Persefoni, SupplyShift and Sweep offer functionality such as benchmarking and supply chain mapping that improve transparency and industry insights to identify Scope 3 reduction opportunities.
With these technologies available, corporates are running out of time and excuses to improve their Scope 3 reporting.
Alastair is an Analyst in the Verdantix Net Zero and Climate Risk practice. His current research agenda focuses on climate risk management software and carbon markets. Prior to joining Verdantix, Alastair worked at Tyler Grange Ltd where he gained experience in consultancy practices and environmental strategy. Alastair holds a First Class BSc in Biological Sciences from Durham University as well as an MSc in Sustainable Development from the University of St Andrews.