In October, thousands of professionals from a range of industries gathered in San Jose, California for VERGE, an annual climate tech conference hosted by the Trellis Group, formerly GreenBiz Group. The event is a platform for climate solution practitioners to share successes, challenges, and insights to foster collective progress in the decarbonization of operations and supply chains.  

At this year’s event, Yue Qiu, Head of Advisory at EcoAct North America, led an informative and interactive panel on building a Scope 3 emissions inventory. This topic interested many conference attendees- as the room attracted over one hundred industry leaders, many of whom play a vital and integral role in managing their company’s sustainability strategy.   

Unlike Scope 1 and Scope 2 emissions, which companies have more direct control over, Scope 3 emissions span a company’s entire value chain, including indirect emissions from suppliers, distributors, customers, and more. To help businesses navigate this complex topic, a panel of sustainability experts joined Yue at VERGE to share insights into the unique challenges of Scope 3 accounting, the expertise essential to creating accurate inventories, and lessons learned from working directly in the space. 

The panel featured experts from diverse industries, with notable speakers Emily Pronchik from FMC Corporation, Sneha Balasubramanian from Cisco Systems, and Thomas Willert from Magna International.  

Below, we recap three key questions and insights from the panel discussion. 

1. What are the biggest challenges in Scope 3 accounting? 

One of the biggest challenges is simply getting started. Many companies lack perfect data or ideal methodologies initially and will need to refine their approach over time.  

Panelists noted that it’s often necessary to adjust the inventory baseline due to initial inaccuracies. While revisiting previous data might seem unideal, it’s common for companies to not get their Scope 3 inventory perfect the first time around.  

Communicating Scope 3 initiatives to corporate leadership can be daunting, especially given the level of uncertainty in data quality and evolving methodologies. Interacting with a variety of stakeholders who may not be familiar with the “ESG alphabet soup” as Emily Pronchik from FMC put it, requires patience and adaptability. It’s essential to recognize that the finance, procurement, and supply chain teams may not fully understand or have ever been asked to provide GHG emissions data, so it’s important to meet people where they are and take the time to engage with them. 

2. How do you communicate updates and changes in Scope 3 data? 

Transparency is key. As new or improved data becomes available, companies may need to adjust previously reported numbers. While this can be uncomfortable—especially if those figures have been publicly shared or assured—panelists emphasized the importance of clearly communicating these changes. Effectively explaining that updates are based on the latest, most accurate information is essential. 

Developing robust documentation and establishing a rebaselining policy are essential to this process. Although Scope 3 data may lack the precision of financial accounting, communicating updates with clear rationale and finance-friendly language helps stakeholders understand the nature of ongoing improvements. 

3. Does Scope 3 accounting get easier over time? 

Yes and no. As relationships with internal teams and suppliers grow stronger, the process of gathering data becomes more streamlined. Stakeholders become more familiar with what’s required and are often more willing to support Scope 3 efforts, resulting in a collaborative approach. However, the process itself remains iterative, especially as the prevailing accounting reporting standards such as the Greenhouse Gas Protocol undergo its highly anticipated revision process. 

Many standard setting bodies are evolving to provide more precise guidance, encouraging companies to move from spend-based to weight-based methodologies and to adopt supplier-specific emission factors, or opening possibilities and crucially defining the acceptance criteria to incorporate market-based instruments in an organization’s Scope 3 inventory. 

Embrace the Ever-Changing Nature of Scope 3 Emissions

Scope 3 accounting is a journey, one that requires ongoing commitment, iterative improvements, and robust data management practices. Companies that invest in building a comprehensive Scope 3 inventory set themselves up for long-term success in meeting net-zero targets. 

At EcoAct, we understand the complexities and challenges of Scope 3 emissions accounting. With extensive experience across industries, we guide organizations through every stage of the process—from data collection and supplier engagement to strategy development and reporting—helping build inventories that align with regulatory requirements and sustainability goals. Reach out to our experts to learn more about how we can support your Scope 3 emissions journey.