Assessing current scope 3 target setting practices

The report identifies five key challenges in setting scope 3 targets: reliance on aggregated emissions as the primary metric, limitations in target-setting methods, the rigidity of target boundaries, insufficient leverage for influencing value chain emissions, and difficulties in measuring progress. A more nuanced approach is proposed to prioritise high-impact activities for mitigation. The report emphasises that current methods generally cover 67% of Scope 3 emissions for near-term targets, rising to 90% by 2050. This approach may lead to the exclusion of critical emissions sources, making it difficult for companies to fully capture their climate impact. Furthermore, the report stresses the need to balance short-term actions with long-term systemic interventions, ensuring that innovations essential to value chain transformation are not overlooked.

Options under consideration to enhance scope 3 target setting

The report explores opportunities to improve scope 3 targets by shifting from a uniform approach to a more flexible, influence-based framework. This framework would prioritise emissions sources where companies have greater control, allowing for differentiated interventions based on the company’s influence over suppliers or customers. The proposed shift towards outcome-based metrics, which measure alignment with global climate goals, is also highlighted. While promising, these proposals carry risks related to the subjectivity of determining influence and the potential exclusion of emissions from critical sectors if not properly managed. The report warns that focusing too much on near-term targets could detract from long-term transformational goals, which are critical for comprehensive decarbonisation.

Exploring the role of certification and environmental attribute certificates in addressing value chain emissions

Certification systems and environmental attribute certificates (EACs) are examined as tools to support value chain mitigation. These certificates help substantiate claims that commodities meet emissions standards aligned with global climate goals, providing companies with a credible way to communicate their climate performance. Robust standards and traceability mechanisms are critical for ensuring the effectiveness of these certificates. The report also discusses the potential for EACs to mitigate emissions in industries with complex supply chains, such as agriculture, where tracking direct emissions is often difficult. A key consideration is the credibility and traceability of these environmental claims, as misrepresentation risks remain high without robust chain-of-custody systems.

Operationalising the proposals

The report outlines a five-step process to operationalise the proposed scope 3 target enhancements. These steps include measuring and disclosing emissions, prioritising climate-relevant emissions, establishing targets, implementing actions, and continuously reassessing interventions. The report suggests that companies use outcome-based metrics to track their progress, which could provide a more accurate reflection of their alignment with global climate goals. In addition to setting emissions targets, companies are encouraged to take responsibility for emissions not yet included within the target boundary by financing beyond-value-chain mitigation activities. Additionally, clear reporting mechanisms and transparency in tracking actions taken are crucial to maintaining the integrity of corporate emissions reductions.

Conclusions and next steps

The paper concludes with a call for further research, particularly on integrating influence into the target-setting framework and developing benchmarks for outcome-based metrics. The SBTi highlights the need to carefully manage risks such as double-counting and exclusion of key emissions sources. Stakeholder engagement is encouraged to refine these proposals through public consultation, with the aim of developing a more actionable, transparent, and effective framework that supports corporate alignment with 1.5°C climate goals. Moreover, the importance of balancing short-term actions with longer-term systemic innovations and certifications is underscored to ensure companies are equipped for sustained climate action.