Supply-chain data sharing for scope 3 emissions

Abstract

This paper deals with data sharing among firms along a supply chain for the calculation of Scope 3 emissions. Scope 3 emissions are indirect emissions produced along a firm’s supply chain. They represent the majority of most firms’ carbon footprint. Current estimations of Scope 3 emissions are largely based on industry averages and other approximations, which leads to several disadvantages. By contrast, primary data sharing along the supply chain would provide firms with precise measures of Scope 3 emissions (that are eventually necessary for decarbonizing supply chain emissions beyond industry averages). For that, firms need access to data and information from their suppliers that are not under their control. We review the benefits of and three main obstacles to such data sharing: legal and regulatory challenges, missing interoperability, and data privacy concerns. Finally, we discuss initiatives and approaches for overcoming these obstacles.