Scope 3 compliance refers to measuring and reporting indirect greenhouse gas (GHG) emissions associated with a company’s value chain, including its suppliers, customers, and end-users. These emissions are often referred to as “Scope 3 emissions” and can make up the majority of a company’s overall carbon footprint.
The major challenges of Scope 3 compliance include:
Collecting accurate and complete data on Scope 3 emissions can be challenging, as it requires collaboration and information sharing among a large number of stakeholders throughout the value chain.
The accuracy and completeness of the data can also be a challenge, as many suppliers and customers may not have the necessary systems or processes in place to track their emissions.
The value chain of many companies can be complex, with multiple tiers of suppliers and customers, making it difficult to track and report on emissions across the entire chain.
There is currently no widely accepted standard for measuring and reporting Scope 3 emissions, which can lead to inconsistencies in reporting and difficulty in comparing emissions across different companies and industries.
Many companies may not have a strong incentive to measure and report Scope 3 emissions, as they may not be directly responsible for them and may not face regulatory or market pressure to do so.
Measuring and reporting Scope 3 emissions can be costly, particularly for smaller companies that may not have the resources to invest in the necessary data collection and reporting systems.