Scope 3 greenhouse gas (GHG) emissions - Challenges and Difficulties

EcoVision
Nov 1
2 min read

Implementing Scope 3 greenhouse gas (GHG) emissions calculations can be quite challenging for most organizations.

These emissions cover indirect activities outside a company’s direct control — such as supply chain operations, product use, and waste disposal.

According to analyses from CDP (Carbon Disclosure Project), S&P Global, and EY’s 2024 Climate Disclosure Benchmark:

Roughly 75 – 80% of Fortune 500 companies publicly disclose their Scope 1 & 2 emissions.
About 55 – 60% now report at least some Scope 3 data.
However, only ~25–30% provide comprehensive, category‑level Scope 3 disclosures across the full GHG Protocol’s 15 categories.

Here’s an outline of the main common difficulties:

1. Data Availability and Quality

Incomplete or missing data: Suppliers or customers may not track emissions accurately (or at all).
Inconsistent reporting: Different formats, time frames, and methodological approaches make data hard to aggregate.
Reliance on estimates: Often companies must use industry averages or spend-based estimates instead of real measured data.

2. Complex Supply Chains

Multiple tiers: Emissions occur not just at direct suppliers, but deep within multi-tiered supply networks.
Limited visibility: Many companies don’t have strong relationships or transparency beyond first-tier suppliers.

3. Boundary Setting and Categorization

Defining what to include: Scope 3 has 15 categories (GHG Protocol) — like purchased goods, business travel, waste, etc. Deciding relevance and materiality can be complex.
Double counting risk: Emissions could be counted by multiple entities if boundaries aren’t clearly set.

4. Data Collection Burden

Resource intensive: Tracking emissions across suppliers, logistics, customers, and end-of-life processes requires significant time, labor, and expertise.
Lack of digital tools: Many organizations still use manual spreadsheets rather than automated data platforms.

5. Methodological Challenges

Different calculation approaches: Economic input–output models, life-cycle assessment (LCA), and supplier-specific methods each give different results.
Uncertainty and precision: Estimations carry high uncertainty due to assumptions and generalized emissions factors. (especially across different jurisdictions)

6. Supplier Engagement

Low awareness or capacity: Smaller suppliers may lack tools, data, or motivation to calculate and share their emissions.
Confidentiality concerns: Companies may hesitate to disclose detailed operational data.

7. Changing Standards and Reporting Frameworks

Evolving regulations: Disclosure frameworks (like ISSB, CDP, and EU CSRD) keep updating, requiring frequent adjustments.
Inconsistent global standards: Different regions may use slightly different emission factors or categories.

8. Integration into Corporate Decision-Making

Difficult to link to cost or strategy: Translating Scope 3 data into actionable sustainability or procurement strategies can be unclear.
Limited incentives: Without regulatory or market pressure, progress can stall.

In summary:

Scope 3 emissions are the most significant but also the most difficult to measure and manage. Overcoming these barriers typically requires better supplier collaboration, standardized methodologies, digital data platforms, and clear internal accountability.

But again, be prepared and don't lag yourself behind!