Under CSRD, companies must report Scope 3 emissions when they represent a significant portion of total greenhouse gas emissions, typically above 40% of total emissions. The European Sustainability Reporting Standards (ESRS) E1 requires disclosure of all 15 Scope 3 categories where material, including purchased goods/services, upstream transportation, waste, business travel, and downstream activities.
Companies must provide quantitative data where feasible, with clear methodology explanations for estimates. The directive mandates third-party assurance for Scope 3 data by 2028, requiring robust data collection systems and supplier engagement programs. Organizations must establish emission reduction targets aligned with science-based targets and report progress annually.
Implementation requires comprehensive supply chain mapping, data collection protocols, and verification processes. Companies should prioritize high-impact categories first, using spend-based calculations initially while building activity-based measurement capabilities.
Key Takeaway: CSRD Scope 3 reporting demands systematic supplier engagement and robust data management systems, with materiality assessments determining disclosure requirements.