The Greenhouse Gas Protocol has released its Phase 1 Progress Update for the revision of the Corporate Value Chain (Scope 3) Standard, providing the clearest indication yet of how Scope 3 reporting may evolve in the coming years.
As climate disclosure requirements continue to expand across global markets, Scope 3 emissions remain one of the most challenging areas of carbon accounting. For many organisations, these indirect emissions account for the majority of their carbon footprint, yet they are often the most difficult to measure accurately due to the complexity of supply chains and the reliance on external data.
The latest update from the GHG Protocol does not introduce new requirements immediately, nor does it represent a final standard. However, it outlines a series of proposed changes that could significantly impact how businesses calculate, disclose and manage Scope 3 emissions in the future.
Key Proposed Changes at a Glance
While the revision process is still ongoing and the proposals remain subject to consultation, the Phase 1 Progress Update highlights several important areas of change:
- A proposed requirement for organisations to account for at least 95% of required Scope 3 emissions.
- Enhanced disclosure requirements relating to data quality and calculation methodologies.
- Greater emphasis on the use and improvement of primary emissions data over time.
- Additional reporting expectations relating to assurance and verification.
- Increased transparency around exclusions and reporting boundaries.
- Proposed changes to investment related emissions reporting, including revisions to Category 15 and the introduction of a new Category 16.
Collectively, these proposals signal a move towards more complete, transparent and comparable Scope 3 reporting across industries.
Why the Scope 3 Standard Is Being Revised
The current Scope 3 Standard was first published in 2011 and has become the most widely used framework for measuring value chain emissions. Since then, the sustainability reporting landscape has changed significantly.
Businesses are facing increasing pressure from investors, customers, regulators and reporting frameworks to provide more accurate and comprehensive emissions data. At the same time, advances in data availability and reporting practices have created opportunities to improve the consistency and reliability of Scope 3 inventories.
The revision process was launched to address common challenges experienced by reporting organisations and to ensure that the standard remains fit for purpose as expectations around climate disclosure continue to evolve.
The Phase 1 Progress Update reflects the work completed so far by the Technical Working Group and provides an early view of the direction being considered for future revisions.
A Stronger Focus on Data Quality
One of the most significant themes emerging from the update is the increased focus on data quality.
Under the proposed revisions, organisations may be required to provide more detailed information about the types of data used in Scope 3 calculations. This would help stakeholders better understand the extent to which reported emissions are based on supplier specific information, industry averages or spend based estimates.
The update also proposes the introduction of data quality improvement metrics and targets. Rather than simply reporting emissions each year, businesses could be expected to demonstrate progress in improving the quality, accuracy and granularity of their Scope 3 data over time.
The update also proposes more specific guidance on the use of supplier data. While supplier-specific information remains a key component of high-quality Scope 3 reporting, organisations may be encouraged to move beyond corporate-average emissions data where possible and use more granular product, process or facility-level information. This reflects a broader shift towards improving the representativeness and accuracy of reported emissions across value chains.
Additional disclosure requirements relating to verification and assurance are also being considered, reflecting growing expectations around the credibility of reported emissions figures.
The Proposed 95% Coverage Requirement
Another major proposal relates to the way organisations define their Scope 3 reporting boundaries.
Currently, businesses have a degree of flexibility when determining which Scope 3 activities should be included within their inventory. Under the proposed revisions, organisations may be required to account for at least 95 percent of their total required Scope 3 emissions.
This would represent a notable shift in approach. Rather than excluding categories or activities at an early stage, companies may need to estimate emissions first before determining whether any exclusions are justified.
For many organisations, this could result in broader reporting boundaries and a greater need to understand emissions sources that have historically received less attention.
The proposal aims to improve consistency between organisations and reduce variation in how Scope 3 inventories are defined and reported.
Greater Transparency Around Exclusions
The proposed revisions also place greater emphasis on transparency.
Businesses may be required to clearly distinguish between required and optional emissions disclosures, identify any exclusions and provide a clear explanation of the reasoning behind them.
In addition, the proposals suggest organisations may need to distinguish more clearly between required and optional Scope 3 emissions disclosures. Separately reporting these categories could improve consistency across organisations and provide stakeholders with greater transparency regarding the completeness of reported inventories.
The update also outlines additional guidance relating to hotspot analysis and the assessment of material emissions sources. These changes are intended to improve stakeholder confidence and make it easier to compare emissions data across organisations and sectors.
As reporting expectations continue to mature, transparency around assumptions and exclusions is becoming increasingly important for investors, customers and regulators alike.
Changes for Investors and Financial Institutions
The revision programme also includes significant proposals relating to financed emissions and investment activities.
The GHG Protocol is considering updates to Scope 3 Category 15, which covers investments, alongside the introduction of a new Category 16 for emissions sources that do not fit neatly within the existing Scope 3 framework.
If adopted, these changes would provide more detailed reporting requirements for financial institutions and investors, while improving consistency in the classification and reporting of investment related emissions.
Although these proposals are particularly relevant to the financial sector, they also demonstrate the broader trend towards greater accountability across value chains and investment portfolios.
Proposed Timeline for the Scope 3 Revision
The publication of the Phase 1 Progress Update represents an important milestone in what is expected to be a multi year revision process.
According to the GHG Protocol, the current update summarises proposals developed during the first phase of technical review. The next stages will involve further stakeholder engagement, technical assessment and refinement of the proposed changes before draft standards are released for public consultation.
While final publication dates have not yet been confirmed, exposure drafts are expected during the next phase of the project, followed by additional consultation and testing before revised standards are finalised.
Although the proposals remain subject to change, the direction of travel is becoming increasingly clear. Organisations that begin preparing now will be better positioned to adapt once the final requirements are published.
Industry Perspective
Commenting on the proposed revisions, our MD at Shape Tomorrow, Kelly Hobson, highlighted how the changes could help bring greater attention to Scope 3 activities that have historically received less focus.
“Transportation and distribution emissions have often been pushed down the priority list, but the proposed changes could encourage organisations to take a closer look at these activities. Sustainability teams should be working with logistics providers now to establish emissions baselines and identify practical opportunities for reduction. The real value will come from turning data into realistic short, medium and long term decarbonisation plans.”
What Businesses Should Be Doing Now
While the revised Scope 3 Standard is still under development, organisations should not wait for the final requirements before taking action.
The proposed requirement to account for at least 95% of required Scope 3 emissions has the potential to bring greater attention to emissions sources that have historically received less scrutiny. For many organisations, this is likely to include transportation, distribution and logistics related activities across both upstream and downstream value chains.
As a result, sustainability teams should begin working closely with logistics functions, transport providers and wider supply chain partners to establish a robust emissions baseline. Understanding where emissions occur throughout transportation and distribution networks will be critical for identifying data gaps, improving reporting completeness and preparing for future disclosure requirements.
However, data collection should be viewed as only the first step. The greater opportunity lies in using this information to identify emissions hotspots and develop realistic decarbonisation plans. Organisations that begin this process now will be better positioned to implement short, medium and long term initiatives that align with operational realities while supporting emissions reduction objectives.
As reporting expectations continue to evolve, organisations that proactively engage with their logistics partners, improve data quality and develop practical reduction pathways are likely to gain a significant advantage when revised reporting requirements are introduced.
Looking Ahead
The Scope 3 Standard revision is still ongoing, and the proposals outlined in the Phase 1 Progress Update remain subject to consultation and further development. Nevertheless, the document provides the clearest indication yet of how corporate Scope 3 reporting may evolve over the coming years.
If the proposed revisions are adopted, businesses can expect increased scrutiny of data quality, stronger expectations around emissions coverage and greater transparency regarding reporting methodologies and exclusions.
For organisations committed to understanding and reducing their value chain emissions, now is the ideal time to begin preparing for the next generation of Scope 3 reporting.
Need Support with Scope 3 Reporting?
Navigating Scope 3 emissions reporting can be complex, particularly as standards and disclosure requirements continue to evolve. Whether you are calculating your carbon footprint for the first time, improving data quality, engaging suppliers or preparing for future reporting obligations, our team can help.
Get in touch with our team today to discuss your requirements and learn how we can support your organisation in developing a robust, accurate and future ready approach to Scope 3 emissions reporting. hello@shapetomorrow.co.uk