⚠️ Standard status at 17 October 2026. Scope 3 reporting still rests on the GHG Protocol’s Scope 3 Standard of 2011. The revision published as a Phase 1 Progress Update on 31 March 2026 describes itself as “not a GHG Protocol Standard” and says that “all content is draft and subject to change”. On 29 July 2026 the GHG Protocol announced that the revised rules will be published inside a consolidated corporate standard developed with ISO 14064-1. It estimates a public consultation in Q2 2027 and publication in Q4 2028 (GHG Protocol Standard Development Plan).
Scope 3 reporting now sits between two sets of rules that move at different speeds: an accounting standard from 2011 that is being rewritten, and disclosure and target rules that tighten from 2027. This guide is for the people responsible for Scope 3 reporting who have to reconcile them: inventory leads, reporting teams and assurance providers. It covers what the 2011 standard actually requires, what the 2026 drafts propose, how ESRS, IFRS S2, California’s SB 253 and the SBTi’s new standard use the inventory, and what an assurance provider will test.
It assumes you already know the basics of Scope 3 reporting. If you need the fifteen categories, industry hotspots, supplier engagement or a first-inventory timeline, start with our broader Scope 3 emissions guide for enterprises and come back here for the rules.
Quick answer. The current GHG Protocol accounting standard for Scope 3 reporting is the 2011 Corporate Value Chain (Scope 3) Standard. It sets out requirements for companies reporting in accordance with the standard, including accounting for all Scope 3 emissions, disclosing and justifying exclusions, and reporting the share of supplier data used in each category. Its revision remains a draft until the consolidated standard is published, which the GHG Protocol estimates for Q4 2028.
Disclosure and target rules move first: the revised ESRS apply from financial year 2027, the IFRS S2 amendments from 1 January 2027, California’s SB 253 provides for Scope 3 reporting from 2027, with the practical requirements still to be set by CARB, and the SBTi Corporate Net-Zero Standard V2.0 becomes effective on 1 February 2027.
Who should read this
- GHG inventory and carbon accounting leads
- Teams preparing ESRS E1 or IFRS S2 disclosures
- Companies in scope of California SB 253
- Teams setting or renewing an SBTi target
- Assurance providers scoping a Scope 3 reporting engagement
- Buyers specifying a carbon accounting platform
🔑 Key takeaways on Scope 3 reporting
- The 2011 standard asks for more than many teams deliver. All Scope 3 emissions accounted for, every exclusion justified, the share of supplier data reported per category, and no netting of offsets.
- Method changes are not reductions. Moving from spend-based to supplier-specific data changes the figure; restate the comparative under the base-year rule.
- The drafts push data quality in Scope 3 reporting into the open. Disaggregation by data type and a 95% coverage rule are proposed, not binding.
- SBTi V2.0 sets Scope 3 targets by company category. Category A companies must cover every category (1–14) that reaches 5% of Scope 3; the 40% trigger and 67% coverage rule belong to the 2021 criteria.
- 2027 is when the rules for Scope 3 reporting change. The revised ESRS, the IFRS S2 amendments, SB 253’s Scope 3 requirement and SBTi V2.0 all take effect in 2027, on today’s accounting rules.
On this page
What the 2011 Standard Requires for Scope 3 Reporting
The standard is not a law in itself. In Scope 3 reporting, its requirements apply to companies that report in accordance with it, and they become obligations when a reporting regime or a commitment refers to it, as ESRS E1, IFRS S2 and the SBTi do in different ways.
The Scope 3 Standard sorts value chain emissions into fifteen categories, eight upstream and seven downstream (Table 5.3); our broader guide walks through each of the fifteen categories and the three that usually matter most. Less often quoted is the list of Scope 3 reporting requirements in Table 3.1, which is stricter than “report what is material” (GHG Protocol Scope 3 Standard, Table 3.1):
| Requirement | What the standard says |
|---|---|
| Completeness | “Companies shall account for all scope 3 emissions and disclose and justify any exclusions.” |
| Data transparency | Report, for each category, “the percentage of emissions calculated using data obtained from suppliers or other value chain partners”. |
| No netting | Report total Scope 3 emissions “independent of any GHG trades, such as purchases, sales, or transfers of offsets or allowances”. |
| Base year | “Recalculate base year emissions when significant changes in the company structure or inventory methodology occur.” |
Three consequences follow for Scope 3 reporting. Exclusions are allowed, but each one must be disclosed and justified. The standard does not prescribe one way to do that; in practice, a rough estimate of what is being left out makes the justification much easier to support. The share of supplier data per category is already a disclosure requirement, so the 2026 drafts extend it rather than invent it. And the base-year rule covers methodology changes as well as acquisitions, which matters as soon as better data arrives.
💡 Why it matters in practice. CDP and BCG found that supply-chain Scope 3 emissions averaged 26 times companies’ operational emissions in disclosures for reporting year 2023 (CDP, June 2024). In Scope 3 reporting, an exclusion or a method change in the main categories can therefore move a company’s total footprint more than anything it does in its own operations.
Calculation Methods, Method Changes and Restatement
For purchased goods and services, the GHG Protocol’s 2013 technical guidance describes four methods, from most to least specific to the supplier (Technical Guidance for Calculating Scope 3 Emissions, 2013). Choosing among them is one of the most consequential decisions in Scope 3 reporting, because it decides what the reported number can show.
| Method | How it works | Useful for | Limits |
|---|---|---|---|
| Supplier-specific | Supplier’s cradle-to-gate product data | Managing supplier emissions; target tracking | Many suppliers cannot provide it yet |
| Hybrid | Supplier activity data where available, secondary data for the gaps | Inventories where supplier data coverage is growing | Hard to compare unless the mix is disclosed |
| Average-data | Mass or quantity × industry-average factor | Stable tracking of physical volumes | Cannot tell a better supplier from a worse one |
| Spend-based | Spend × environmentally extended input-output factor | First screening; finding the hotspots | Moves with prices, not with supplier performance |
Figure 1 shows why the choice matters: the same purchase gives two different results depending on whether the calculation follows money spent or the supplier’s own product data.
Figure 1. The same purchase under two methods (illustrative).
When a large category moves from spend-based to supplier-specific data, the reported figure can change sharply with no change in what was bought or how it was made. That is a methodology change, and the 2011 standard’s base-year rule applies to it. Restate the base year and comparatives, or explain why the change is below your significance threshold, before anyone presents the movement as progress. The choice of emission factor databases raises the same issue; our broader guide covers how to choose and document factor sources and primary versus secondary data.
⚠️ Set the threshold before you need it. Write down a significance threshold for base-year recalculation in your Scope 3 reporting, date it and apply it consistently. A threshold chosen after seeing which way an acquisition or a method change moves the total is exactly what a reviewer looks for. Our carbon accounting methodology selector helps document the Scope 3 reporting method category by category.
The Revision: What Is Draft and What Is Current
The revision has been running since September 2024. According to the Phase 1 Progress Update, its technical working group has 65 members from more than 20 countries and held 42 meetings between September 2024 and the end of 2025 (Phase 1 Progress Update, section 1.2). In July 2026 the GHG Protocol widened the project: the revised Scope 3 rules will arrive inside a single consolidated corporate standard developed with ISO. Figure 2 places these steps alongside the disclosure and target rules that take effect in 2027.
Figure 2. The Scope 3 calendar, 2011–2028. Dates marked * are GHG Protocol estimates.
The announcement says the GHG Protocol’s governance bodies “approved a new timeline” with “a consolidated public consultation in Q2 2027 and publication of the consolidated joint corporate standard in Q4 2028” (GHG Protocol, 29 July 2026). The Standard Development Plan labels both dates as estimates and says the timeline is “subject to change” (Standard Development Plan). No effective date has been announced, so nothing in the drafts changes Scope 3 reporting today.
What the Phase 1 draft proposes
| Ref. | Proposal | What it would change |
|---|---|---|
| A1 | Disaggregate reported Scope 3 emissions “into distinct tiers based on data type” | Readers would see how much of each category is estimated. Tier definitions are still pending. |
| A2 | Report whether Scope 3 data was third-party verified | Assurance coverage would be stated, not implied. Labels and alignment with ISO 14065 are still open. |
| A8 | Corporate-level data allocation “shall not be used” for value chain partners, except homogeneous ones | Limits a common shortcut for allocating a supplier’s total emissions to your purchases. |
| B1–B2 | “Account for and report at least 95% of total required scope 3 emissions” | Exclusions, including de minimis, would share a 5% cap and would need to be quantified. |
| B11 | New Category 16, “other value chain activities” | Covers facilitated activities such as brokerage; mostly optional and reported separately. |
Every row comes from a document that calls itself a working draft (GHG Protocol, Phase 1 Progress Update, 31 March 2026). The July 2026 Standard Development Plan also lists data quality and disaggregation, and boundaries and Category 16, as topics for the next phase, so the proposals may still change before consultation.
Two Different 5% Rules
Two “5%” rules now circulate in Scope 3 reporting, and they are often merged into one. They answer different questions, as Figure 3 shows.
Figure 3. The GHG Protocol draft coverage rule and the SBTi target-coverage rule (category shares illustrative).
The GHG Protocol draft is about completeness of the inventory: at least 95% of required Scope 3 emissions reported, with no more than 5% excluded in total (Phase 1, Revisions B1–B2). The SBTi rule is about target coverage: a Category A company’s near-term targets must cover “at least all scope 3 categories that individually represent 5% or more” of Scope 3 emissions in categories 1–14, and its long-term targets must cover 100% (SBTi CNZS V2.0, C14.1 and C16.1). The first is a draft; the second is final and becomes effective on 1 February 2027.
Data Provenance: the Change to Prepare for Now
Of all the proposals, disaggregation by data type is the one that should shape Scope 3 reporting systems today. In Scope 3 reporting today, a single total does not show whether it rests on supplier data or on spend-based estimates. Under the draft, each category would be split into tiers, with an “unclassified” tier allowed (Phase 1, section 2.2). Figure 4 illustrates the idea with invented shares; the tier names are placeholders until the GHG Protocol defines them.
Figure 4. Disaggregation by data type, as proposed in the draft (illustrative shares).
💡 Why this is a systems question. To report by data type, every emissions record has to carry its data type: line by line, category by category, year by year. Not every carbon accounting set-up stores that today, and retrofitting it across past years is harder than capturing it from the start. If you are choosing or reconfiguring a platform, make data-type provenance a written requirement. The 2011 standard already asks for the share of supplier data per category, so this pays off whatever the final text says. Our carbon accounting software ranking compares how platforms handle it, and our guide to AI in Scope 3 supplier data collection covers the collection side.
Scope 3 Reporting Under CSRD and ESRS E1
For companies inside CSRD scope, Scope 3 reporting happens under ESRS E1, alongside gross Scope 1 and 2 emissions. Omnibus I (Directive (EU) 2026/470) entered into force on 18 March 2026. The amended CSRD sets the revised scope thresholds at more than 1,000 employees on average and more than €450 million in net turnover. However, the practical application of these amendments depends on national transposition and the applicable transitional provisions; companies should check the law in their Member State before determining their reporting obligations for a given financial year.
Law firms report a transposition deadline of 19 March 2027 for the reporting amendments; the later dates of 26 July 2028 and 26 July 2029 concern the due diligence (CSDDD) amendments (Linklaters, Crowell).
In the meantime, for financial years 2025 and 2026 the directive lets Member States exempt first-wave companies that do not exceed these thresholds, so the position in October 2026 depends on your Member State. Check it first with our guide to who is still in CSRD scope or the Omnibus scope self-test.
For those still in scope, Scope 3 reporting follows the revised ESRS (Delegated Regulation (EU) 2026/1563), which apply from financial year 2027. For financial year 2026, undertakings already reporting may choose between the existing standards, early application of the revised ones, or the existing standards with selected reliefs, and must state which version they used (Art. 2).
What revised E1 asks for in Scope 3 reporting
In the adopted text of revised E1, as reproduced in EFRAG’s ESRS Knowledge Hub (EFRAG, ESRS E1, Delegated Act version), the Scope 3 requirements sit in disclosure requirement E1-8, “Gross scope 1, 2, 3 GHG emissions”:
- Disclosure by significant category. Undertakings report “scope 3 GHG emissions from each significant scope 3 category as a total and per category” (paragraph 30(a)(iii)).
- Screening and significance. They consider the 2011 Scope 3 Standard, screen all 15 categories “using relevant estimates”, and identify significant categories mainly by the magnitude of estimated emissions, with criteria such as spend, influence, transition risks and opportunities, or stakeholder views also listed (AR 24(a)–(c)).
- Update cycle. Emissions in each significant category are updated every year, and the full Scope 3 inventory at least every three years (AR 24(e)).
- No netting. Removals, carbon credits and GHG allowances are not included in the emissions calculation (AR 20(d)); removals and credits are disclosed separately under E1-9.
- Targets. GHG reduction targets are absolute, for Scopes 1, 2 and 3 separately or combined, with the share of each scope covered disclosed (paragraph 24).
We did not find in revised E1 a datapoint equivalent to the 2011 standard’s share of supplier data per category; AR 24(d) asks undertakings to prioritise inputs according to the characteristics of the data, including whether it has been verified. We read E1 through EFRAG’s reproduction rather than the Official Journal PDF, so check the wording against the published regulation before quoting it in a filing.
The general requirements in ESRS 1 add three points for Scope 3 reporting:
- No partial-scope relief for GHG emissions. The relief that lets an undertaking report on only part of its operations or value chain when data is limited does not apply to the “ESRS E1-8 metrics Gross scope 1, 2, 3 GHG emissions” (ESRS 1, paragraph 91).
- Estimates are allowed. Value chain information may be estimated “depending on practicability and reliability considerations” (ESRS 1, paragraph 65).
- A transition for incomplete value chain data. For the first three years, an undertaking that cannot obtain all value chain information must explain its efforts to do so (ESRS 1, paragraph 123).
Our ESRS guide covers the standards as a whole, and double materiality decides whether climate is material for you.
⚠️ Supplier data requests now have legal limits. Under the CSRD value chain cap, a reporting undertaking may not require a value chain company with 1,000 employees or fewer to provide, for CSRD purposes, more information than the voluntary standard specifies (Directive (EU) 2026/470, Art. 2(4)). From financial year 2027 that limit is the list in Annex II of Delegated Regulation (EU) 2026/1560, which includes total energy consumption and estimated absolute gross GHG emissions. The supplier may decline to provide anything beyond it; requests made for other purposes, such as due diligence, fall outside the cap. Design the supplier ESG questionnaire behind your Scope 3 reporting around that list.
Beyond Europe: IFRS S2 and California SB 253
| Regime | Scope 3 position | Status and source |
|---|---|---|
| IFRS S2 (ISSB) | Scope 3 disclosure required; the amendments let entities limit Category 15 to financed emissions and clarify jurisdictional relief from GHG Protocol measurement | Issued 11 December 2025, effective for periods beginning on or after 1 January 2027, early application permitted. Applies only where a jurisdiction adopts IFRS S2 — IFRS Foundation |
| California SB 253 | Companies with over $1 billion in total global annual revenue doing business in California; the statute requires Scope 3 reporting from 2027, not for the 2026 reporting year | First Scope 1 and 2 reports are due 10 November 2026 under CARB’s initial regulation, approved on 12 October 2026 (Sullivan & Cromwell, 14 October 2026). Scope 3 and assurance for 2027 onwards are left to a separate rulemaking; at a July 2026 workshop CARB floated limiting mandatory 2027 Scope 3 reporting to Categories 1, 3, 5, 6 and 7, a pre-proposal idea — Mayer Brown, August 2026 |
Each regime builds its Scope 3 reporting on GHG Protocol methods and then adjusts scope, timing and relief. An inventory built on the 2011 standard, with data types recorded and exclusions justified, can serve all of them. California’s 2027 rules are still being written, so check CARB’s current rulemaking before fixing a 2027 Scope 3 reporting plan. For climate-risk disclosure more broadly, see our TCFD reporting guide.
Scope 3 Targets Under SBTi V2.0
The SBTi released its Corporate Net-Zero Standard V2.0 on 11 June 2026; it becomes effective on 1 February 2027 (SBTi CNZS V2.0 Criteria, version history). It replaces the Scope 3 reporting and target logic many teams still quote. Under the 2021 criteria, a near-term Scope 3 target was required when Scope 3 was 40% or more of total emissions, and it had to cover at least two-thirds of Scope 3 (SBTi Net-Zero Standard Criteria V1.0, C4 and C6). In V2.0, whether a Scope 3 target is required depends on the company’s category rather than on the size of its Scope 3 share:
| Topic | Criterion |
|---|---|
| Who must set Scope 3 targets | Category A companies: in any country, net turnover of €450 million or more or 1,000 FTE or more; in high-income countries, also Scope 1 and 2 emissions of at least 10,000 tCO2e, or two of: balance sheet ≥ €25 million, net turnover ≥ €50 million, FTE ≥ 250 (Table 1). Category A companies set separate Scope 1, 2 and 3 targets; Category B companies set Scope 1 and 2 targets, and Scope 3 targets are optional for them (C9.1, C14, C15). |
| Inventory | Category A companies also report Scope 3 emissions within their GHG inventory (C5.2), using the minimum boundaries set for each category (C5.6). |
| Near-term coverage | All Scope 3 categories (1–14) that individually meet the 5% threshold, subject to the permitted exclusions below (C14.1). |
| Optional exclusions | Listed exclusions, even within significant categories: for example all of Category 7, or Category 9 transport where the company has no contractual or other direct means to influence fuel, route or mode. Conditional exclusions also exist for Categories 1–3, 8, 10 and 14. The excluded amounts must be reported with a justification (C14.2–C14.3). |
| Long-term coverage | 100% of Scope 3 emissions (C16.1). |
| Target types | An absolute reduction target on a linear trajectory to a defined residual level, a target to increase the share of tier 1 suppliers or customers that are in transition or net-zero aligned, or targets for specific emissions-intensive categories or activities (C15.1–C15.3). |
| Timeframe | Near-term targets cover a five-year period beginning at the start of the most recent reporting period (C9.2); long-term targets by 2050 at the latest (C9.3). |
| Assurance | Independent third-party assurance, at least limited, of the target base-year GHG inventory and associated required metrics: required for Category A, optional for Category B (C7). |
If you hold or plan a target, base your Scope 3 reporting and targets on the criteria document itself. The version history refers to a mandatory transition period that the criteria we reviewed do not detail, and C20.2 requires companies revising targets to conform to the effective version, so confirm with the SBTi how and when existing targets move to V2.0. Our net zero roadmap toolkit helps turn a target into milestones.
What Assurance Providers Test
Scope 3 reporting now faces assurance from several directions, on different timetables. Under the CSRD, the sustainability statement, including E1 emissions, is subject to a limited assurance engagement, and Omnibus I asks the Commission to adopt limited assurance standards by 1 July 2027 (Directive (EU) 2026/470). In California, CARB will accept 2026 submissions without limited assurance, and assurance for later years, including any for Scope 3, is left to the next rulemaking (Sullivan & Cromwell). Under SBTi V2.0, a Category A company needs at least limited assurance of its base-year inventory, which includes Scope 3 (SBTi CNZS V2.0, C7).
Our broader guide lists the evidence an assurance-ready inventory needs; the errors below are typical ways that evidence turns into findings.
Method and data
- Presenting spend-based estimates without saying so
- Reporting a method change as an emissions reduction
- Leaving categories out without justifying the exclusion
- Netting offsets or credits against the Scope 3 total
Governance and disclosure
- No documented source for emission factors
- No base-year recalculation after an acquisition or method change
- Not reporting the share of supplier data per category
- Reporting a total without saying which categories it covers
The first two errors compound each other in Scope 3 reporting. A company moves Category 1 to supplier data, the total falls, and the drop is presented as progress. An assurance provider will ask for a restated comparative; if past data cannot support one, the finding stands.
A Scope 3 Reporting Plan for 2026–2027
- Map your Scope 3 reporting obligations. CSRD, IFRS S2 through local adoption, California SB 253, an SBTi commitment, or customer requests. The answer sets deadlines, scope and assurance level for your Scope 3 reporting.
- Screen all fifteen categories. A spend-based screening is usually enough to find the significant categories and to support the justification of exclusions that the 2011 standard requires; revised E1 also asks for a screening of all 15 categories. Our Scope 3 GHG calculator is built for that first pass.
- Document the method for each category. In Scope 3 reporting, it is the first thing an assurance provider asks for, and it lets you explain a later method change.
- Record the data type on every line. Supplier-specific, secondary or spend-based. The share of supplier data is already required by the 2011 standard; the draft would ask for more.
- Fix your recalculation policy. A dated significance threshold for structural and methodology changes, applied consistently.
- Check targets against SBTi V2.0. Category A or B, the 5% coverage rule, optional exclusions and base-year assurance before 1 February 2027.
- Keep supplier requests within the cap. From financial year 2027, for CSRD purposes, ask value chain companies with 1,000 employees or fewer for the Annex II list only; treat anything more as voluntary.
- Do not rebuild your Scope 3 reporting for the draft. As a practical recommendation, invest in completeness, documented methods and data provenance: they serve today’s requirements, and in our view they are likely to stay useful whatever the final text says, although that text is not yet known.
If your Scope 3 reporting programme is still at an earlier stage, our broader guide sets out the maturity stages and a realistic timeline for a first inventory. For tooling, see our analysis of AI in carbon accounting, comparisons such as Sweep vs Persefoni, and our scoring methodology.
Bottom line. Scope 3 reporting still runs on a 2011 standard that already asks for complete accounting, justified exclusions and the share of supplier data per category. The 2026 drafts push further on data quality but are not expected to be final before 2028, while the revised ESRS, IFRS S2 amendments, SB 253’s Scope 3 requirement and SBTi V2.0 take effect in 2027. Build a complete, documented inventory that records where every number comes from, and restate when the method changes.
Sources and Verification
| Claim | Source and status |
|---|---|
| 15 categories; account for all Scope 3 and justify exclusions; supplier-data share per category; no netting of offsets; base-year recalculation | GHG Protocol Scope 3 Standard (2011), Tables 3.1 and 5.3 — PRIMARY, current accounting standard; legal obligations depend on the applicable reporting regime |
| Four Category 1 calculation methods | Technical Guidance for Calculating Scope 3 Emissions (2013) — PRIMARY, guidance |
| Phase 1 proposals A1, A2, A8, B1–B2, B11; draft status; 65 members, 42 meetings | Phase 1 Progress Update, 31 March 2026 — PRIMARY, DRAFT (not binding) |
| Consolidation with ISO 14064-1 announced 29 July 2026; consultation Q2 2027 and publication Q4 2028 | GHG Protocol announcement and Standard Development Plan — PRIMARY; both dates are ESTIMATES |
| SBTi CNZS V2.0: released 11 June 2026, effective 1 February 2027; Table 1; C5, C7, C9, C14, C15, C16, C20.2 | SBTi CNZS V2.0 Criteria — PRIMARY, final. The criteria cited here (Table 1, C5, C7, C9, C14–C16, C20.2) were read in the official document; sections 5.2 onwards and Annex A were not reviewed, and no rule on moving existing targets to V2.0 was found |
| 40% trigger and 67% coverage in the 2021 criteria | SBTi Net-Zero Standard Criteria V1.0 (October 2021), C4 and C6 — PRIMARY, superseded criteria |
| Omnibus I in force 18 March 2026; CSRD thresholds; value chain cap; limited assurance standards by 1 July 2027 | Directive (EU) 2026/470 — PRIMARY, binding; national transposition pending |
| Transposition by 19 March 2027 (reporting amendments); 26 July 2028 and 26 July 2029 for the CSDDD amendments | Linklaters, 26 February 2026, Crowell, March 2026 — SECONDARY (law firms, concordant); closing articles of the directive not read in the primary text |
| Member State option to exempt first-wave companies below the thresholds for FY2025–2026 | Directive (EU) 2026/470, Art. 3(1) — PRIMARY, binding |
| Revised ESRS apply from FY2027; FY2026 options; ESRS 1 paragraphs 65, 91 and 123 | Delegated Regulation (EU) 2026/1563 — PRIMARY, binding (ESRS 1 and Articles read) |
| Revised E1: E1-8 paragraph 30(a)(iii); AR 20(d); AR 24(a)–(e); paragraph 24 | EFRAG ESRS Knowledge Hub, E1 (Delegated Act version) — adopted text as reproduced by EFRAG; not cross-checked against the Official Journal PDF |
| Annex II includes estimated gross GHG emissions and energy consumption; cap applies from FY2027 | Delegated Regulation (EU) 2026/1560, Art. 3–4 and Annex II — PRIMARY, binding; column marking not independently verified |
| IFRS S2 amendments: Category 15 relief, effective 1 January 2027 | IFRS Foundation, 11 December 2025 — PRIMARY |
| SB 253: 10 November 2026 deadline; initial regulation approved 12 October 2026; no assurance required for 2026 | Sullivan & Cromwell, 14 October 2026 — SECONDARY (law firm) |
| SB 253: $1 billion threshold; Scope 3 from 2027; five-category idea from CARB’s July 2026 workshop | Mayer Brown, 5 August 2026 — SECONDARY (law firm); CARB ideas are pre-proposal |
| Supply-chain Scope 3 averaged 26 times operational emissions (reporting year 2023) | CDP press release, 25 June 2024 — PRIMARY for the finding; sample size not stated in the release |
What we could not establish
- Whether the revised E1 wording quoted above matches the Official Journal text word for word: we read it through EFRAG’s Knowledge Hub because the EUR-Lex PDF could not be opened during our review.
- The transposition and application dates in the closing articles of Directive (EU) 2026/470: we rely on concordant law-firm briefings, and national transposition status changes over time.
- How and when existing SBTi targets must move to V2.0: the version history mentions a mandatory transition period that the criteria we reviewed do not describe; we did not review sections 5.2 onwards or Annex A of the V2.0 criteria.
- The final shape of California’s 2027 Scope 3 requirements and of Scope 3 assurance under SB 253.
- Whether the GHG Protocol will keep the Phase 1 proposals in the consolidated draft.
This guide would change if the GHG Protocol moves its consultation or publication dates, if the consolidated draft drops or rewrites the Phase 1 proposals, if the SBTi publishes transition rules for existing targets, or if CARB finalises its 2027 rules. We will update it when any of these happens.
This guide describes the accounting standards and disclosure rules behind Scope 3 reporting; it is not legal or assurance advice. Corrections: contact@aigreentools.com.
Frequently Asked Questions About Scope 3 Reporting
Which standard sets the rules for Scope 3 reporting today?
The GHG Protocol Corporate Value Chain (Scope 3) Standard of 2011 is the current accounting standard. It is not a law in itself: it becomes an obligation when a reporting regime or a commitment, such as ESRS, IFRS S2 or an SBTi target, refers to it. A revision is in progress, but the Phase 1 Progress Update of March 2026 describes itself as a draft that is not a GHG Protocol Standard, and the GHG Protocol estimates that the consolidated standard will be published in Q4 2028.
Do I have to report all 15 Scope 3 categories?
For Scope 3 reporting, the 2011 standard requires companies to account for all Scope 3 emissions and to disclose and justify any exclusions. You can leave a category out, but the exclusion must be disclosed and justified; a rough estimate of its size is the most practical way to support that justification, although the standard does not make it a universal requirement. Revised ESRS E1 asks for emissions from each significant category after screening all 15. A draft GHG Protocol revision would require at least 95% of required Scope 3 emissions to be reported, but that proposal is not binding.
Does a change of calculation method count as a reduction in Scope 3 reporting?
No. Moving from spend-based to supplier-specific data can change the reported figure without any change in real emissions. The 2011 standard requires base-year recalculation when the inventory methodology changes significantly, so restate the comparative or explain why the change falls below your threshold.
What is the 95% rule in Scope 3 reporting?
It is a draft proposal from the GHG Protocol’s Phase 1 Progress Update: companies would account for and report at least 95% of total required Scope 3 emissions, with all exclusions, including de minimis, capped at 5%. It is not the SBTi rule that near-term targets must cover every category reaching 5% of Scope 3 emissions.
Does SBTi still use the 40% Scope 3 threshold?
Not in V2.0. The 40% trigger and the two-thirds coverage rule come from the SBTi’s 2021 criteria. Under the Corporate Net-Zero Standard V2.0, released on 11 June 2026 and effective from 1 February 2027, Category A companies set Scope 3 targets covering every category (1–14) that individually represents 5% or more of Scope 3 emissions, and long-term targets covering 100%. For Category B companies, Scope 3 targets are optional.
What does CSRD require for Scope 3 reporting?
Companies in CSRD scope disclose gross Scope 3 emissions under ESRS E1-8, by significant category and in total. Under the revised ESRS, which apply from financial year 2027, the partial-scope relief does not apply to gross GHG emissions, estimates are allowed for value chain data, and incomplete value chain data must be explained during the first three years.
When does California require Scope 3 reporting?
SB 253 provides for Scope 3 reporting from 2027 for companies with more than $1 billion in annual revenue doing business in California; it is not required for the 2026 reporting year, whose Scope 1 and 2 reports are due on 10 November 2026. CARB will set the 2027 requirements in a separate rulemaking and has floated limiting mandatory Scope 3 reporting to five categories, but that idea is not final.
Can suppliers refuse data requests for Scope 3 reporting?
For CSRD reporting, a customer may not require a value chain company with 1,000 employees or fewer to provide more than the voluntary standard specifies; from financial year 2027 that limit is the Annex II list of Delegated Regulation (EU) 2026/1560, which includes estimated gross GHG emissions. Requests for other purposes, or voluntary exchanges, are outside the cap.
