Procurement leaders feel ‘best guess’ Scope 3 reporting puts them at risk of unintentional greenwashing

More than half of procurement leaders fear they could be greenwashing “unintentionally” due to a lack of confidence in Scope 3 reporting, which most consider a “best guess” exercise.

Scope 3 emissions reporting is becoming mandatory in many jurisdictions: the EU Corporate Sustainability Reporting Directive (CSRD) mandates it for large companies starting this year, and California’s new climate reporting rule expected to come into force in 2026.

But a survey of 850 EU, UK and US supply chain managers by procurement platform Ivalua shows that many companies are worried about their ability to comply with these requirements, with 53% of respondents concerned about unintentional greenwashing.

For almost two thirds (61%) of procurement managers, Scope 3 reporting remains a “best guess” exercise: many (26%) encounter resistance from suppliersto collaborate in emissions reduction, or find that suppliers are simply unable to assess their own emissions (25%). And when supplier do provide emissions data, 22% of procurement leaders are unsure about its completeness or reliability.

As a result the majority (64%) of supply chain managers think that their inability to accurately measure supplier emissions “makes it hard to turn words into action”.

“Absolute accuracy could be hard to achieve without significant investment,” said Oliver Hurrey, founder & chair of knowledge-sharing organisation Scope 3 Peer Group. 

“Organisations shouldn’t spend time and money fixating on 100% accuracy. Instead, they need to equip procurement teams and the wider business with good data and insights. This will empower procurement teams to start taking action to identify unsustainable suppliers and ensure the business is headed in a greener direction.”

US companies feel prepared for SEC climate rule

Almost two years after publishing its draft, the Securities and Exchange Commission (SEC) is yet to finalise its climate risk reporting rule, but American companies feel prepared for it – even if it includes Scope 3. One-fifth (20%) of the 250 US firms surveyed said they are completely prepared, while 48% feel “mostly prepared”, and only 8% feel unprepared.

This confidence may be related to the fact that the SEC’s draft climate rule states that companies would only have to report Scope 3 emissions if these are considered “material” or form part of “a GHG emissions target or goal” – a much looser requirement than in the California bill. The final SEC rule is now expected in April.

In 2023, research by ratings firm MSCI showed that only 37% of companies worldwide reported their Scope 3 emissions.