Carbon and compliance: The Scope 1–3 strategy for impact and ESG alignment

Why Scope 3 is the strategic frontier

Scope 3 emissions, indirect emissions from a company’s value chain, typically account for 80–95% of total emissions for most organisation. That includes emissions from purchased goods and services, transport, use-phase impacts, and end-of-life treatment, all beyond a company’s direct operational control.

According to Jasper Akkermans, Sustainability Researcher at Coolset, many firms have reduced their Scope 1 and 2 emissions through efficiency and renewable energy, but the real work sits in Scope 3. It’s not only a climate imperative, it’s a strategic differentiator.

From a compliance angle, the EU’s Corporate Sustainability Reporting Directive (CSRD) requires Scope 3 reporting for in-scope businesses. And while UK regulation has not yet made Scope 3 mandatory, Procurement Policy Note 06/21 already requires government suppliers to include Scope 3 in their Carbon Reduction Plans. Investors and banks are also demanding full emissions transparency as a condition for capital access.

In short, Scope 3 reporting is becoming table stakes — not just for compliance, but to win business and maintain trust.

Turning carbon data into action: Where LCA fits in

Coolset’s platform helps businesses quantify Scope 1–3 emissions and align with ESG frameworks like CSRD and VSME. But raw emission figures are not enough — data quality is a common issue.

This is where LCAs come in. 

“LCA shows the product-level emissions, while the GHG inventory aggregates the full picture. Together, they form a complete, actionable view,” says Jasper Akkermans.

LCA data enables businesses to:

• Identify carbon “hotspots” within products and supply chains.
• Replace generic emission factors with verifiable, product-specific data.
• Measure the impact of sourcing changes (e.g., shifting manufacturing from China to Europe).
• Set realistic and credible decarbonisation targets.

This is especially valuable when aligning with frameworks such as the Science Based Targets initiative (SBTi), where precision and traceability are prerequisites. Without LCA, targets risk becoming vague commitments; with it, they become grounded roadmaps.

Scope 3 in practice: Lessons from UK leaders

Coolset's talk spotlighted how UK and EU firms are embedding Scope 3 in their operations:

• Unilever onboarded 300+ suppliers, covering 44% of its Scope 3 emissions, and achieved a 42% reduction in industrial Scope 3 emissions. The company ties supplier contracts to climate data and action plans. As a global consumer goods giant with brands across food, home, and personal care, Unilever has made sustainability a core pillar of its multinational supply chain strategy.
  
  
• Tarmac achieved a 75% emissions reduction on the A64 road resurfacing by using electric plants and low-carbon binders — without offsets. It’s also embedding carbon data into procurement requirements. Operating as the UK’s largest sustainable building materials and construction solutions business, Tarmac is central to infrastructure projects nationwide, supplying aggregates, asphalt, concrete, and cement.
  
  
• BT Group mandates Scope 3 disclosure through the Carbon Disclosure Project, integrating carbon KPIs into supplier assessments. Its Scope 3 footprint represents up to 95% of its total emissions. As one of the UK’s leading telecommunications and digital services providers, BT serves millions of households and businesses, with a supply chain that spans technology, network equipment, and service delivery.
  
  
• Sainsbury’s partners with WRAP and suppliers to align targets by 2025. The retailer has introduced lower-emissions product ranges and invested in EV infrastructure, aiming for a 50% cut in Scope 3 operational emissions by 2030. Founded in 1869, Sainsbury’s is one of the UK’s largest supermarket chains, operating thousands of outlets across food, clothing, and financial services, with a strong focus on sustainable retailing.
  
  

Each of these examples reinforces a key trend: Scope 3 transparency is a business enabler. Firms are using emissions data not just to comply, but to optimise procurement, reduce costs, and improve brand positioning.

A workflow for end-to-end ESG alignment

In his presentation, Akkermans outlined a step-by-step framework for building a Scope 1–3 strategy:

1. Map operations and supply chain emissions:

2. Gather detailed carbon data:

3. Calculate emissions via ESG platforms:

4. Align with ESG frameworks: 

5. Report and refine:

Akkermans noted that even companies without dedicated sustainability teams can begin. In the early stages, ESG often sits with procurement or operations managers, but what really matters is starting.

Looking ahead: Why Scope 3 isn’t going away

While EU policymakers are debating the scope of CSRD, the core reporting requirements remain. As Akkermans warned, even if thresholds shift, “Scope 3 will stick around.”

Importantly, voluntary reporting is rising regardless of regulation. Coolset found that 90% of companies they surveyed want to continue ESG reporting, even if not legally obliged. Similarly, 89% of investors factor ESG data into their decisions, but cite unreliable Scope 3 data as a major obstacle.

The strategic takeaway is clear: Scope 3 is more than a reporting line. It’s a lever for operational resilience, supply chain optimisation, and long-term carbon cost control.

Frequently Asked Questions (FAQ)

What are Scope 1, 2 and 3 emissions?

Scope 1: Direct emissions from owned or controlled sources.

Scope 2: Indirect emissions from purchased electricity or heat.

Scope 3: All other indirect emissions — from supply chains, transport, use of products, waste, and more.

Is Scope 3 reporting mandatory in the UK?

Not yet across the board, but under PPN 06/21, major public suppliers must include Scope 3 in their Carbon Reduction Plans. If you trade in the EU, CSRD may also apply.

How does LCA improve Scope 3 data?

LCA provides material- and product-level emissions data, replacing generic estimates. This results in higher accuracy, better ESG credibility, and actionable insights for decarbonisation.

What if we don’t have a sustainability team?

You can still start. Coolset and One Click LCA both offer guided workflows suitable for procurement, operations or finance leads initiating carbon reporting.