Sustainable Sara | The Scope 3 Squeeze: Why Scope 3 Is Becoming a Business Requirement Before It Becomes a Legal One
I keep having a version of the same conversation with manufacturers this year. They tell me, correctly, that they're not yet required to report Scope 3 emissions. Then, almost in the same breath, they mention that a customer, retailer, or investor is already asking them for that data.
Both things are true. Together, they describe the moment manufacturers are in right now — the Scope 3 Squeeze.
Scope 3 is no longer being driven by a single regulation or deadline. Customer procurement requirements, CDP (formerly the Carbon Disclosure Project) disclosure, corporate climate targets, investor expectations, emerging reporting standards, and regulations like California's SB 253 are all pushing companies toward greater visibility into their value-chain emissions.
For manufacturers, that means the question is increasingly shifting from “Am I required to report Scope 3?” to “Who is going to ask me for this data, and will I be ready when they do?”
California's Senate Bill (SB) 253, the law most manufacturers point to when they weigh their obligations, only applies directly to companies doing business in California with $1B or more in revenue. Its Scope 3 reporting requirement isn't set to begin until 2027, leaving most manufacturers with time still on the calendar.
But regulation is only part of the story. Scope 3 data is already moving through supply chains, sometimes reaching manufacturers long before a law applies to them directly.
Straight Talk from Sara
You do not have to be the regulated entity for Scope 3 to become your business requirement. If your customer, investor, disclosure program, or climate target depends on your data, the request will reach you anyway.
Why Scope 3 Is Harder to Verify Than Scope 1 & 2
Before we get into why the pressure is building, it's worth understanding why Scope 3 is a fundamentally different verification challenge than Scope 1 and 2, because that difference is the root of everything discussed below.
Scope 1 and Scope 2 emissions are largely based on data your organization controls directly: fuel purchases, utility bills, operational records. When your Scope 1 and 2 data is verified, the third-party certifier, like GreenCircle, is reviewing evidence that originates inside your four walls. That doesn't make Scope 1 and Scope 2 verification simple. A verifier still evaluates boundaries, source data, calculation methodologies, emission factors, completeness, assumptions, and whether the greenhouse gas statement is supported by sufficient evidence.
Scope 3 expands that exercise across the value chain. Scope 3 spans both upstream activities (purchased goods and materials from your suppliers) and downstream activities (how your products are used and disposed of after they leave your facility). That's a much wider net than Scope 1 and 2, and most of it depends on information generated by other companies: suppliers and customers running different systems, using different methodologies, and operating at very different levels of sustainability maturity.
That means organizations often must rely on information generated by other companies operating with different systems, different methodologies, and very different levels of greenhouse gas accounting maturity. Where primary data isn't available, organizations may also need to use secondary datasets, industry averages, emission factors, spend-based estimates, allocation methods, and other assumptions. Scope 3 verification becomes less about simply expanding the inventory and more about evaluating whether the methods, assumptions, data sources, and limitations are appropriate and transparently documented.
In short: it's not just a bigger number to verify. It's a different kind of verification altogether.
The Five Forces Behind the Squeeze
1. Customer and Procurement Pressure
For many manufacturers, the first Scope 3 request won't come from a regulator—it will come from a customer. Large retailers, brands, OEMs, and other corporate buyers increasingly need emissions information from suppliers to improve their own Scope 3 inventories and track progress against climate goals. In 2025, members of CDP's Supply Chain program requested environmental data from nearly 45,000 companies across 110 countries, demonstrating how quickly these expectations are moving through supply chains. For manufacturers, that means a Scope 3 request can arrive through a supplier questionnaire, procurement requirement, sustainability scorecard, or request for supplier-specific activity or emissions data, even when no reporting regulation applies to them directly.
2. Disclosure and Climate-Target Pressure
Regulation isn't the only reason companies are building Scope 3 inventories. Organizations are also reporting through platforms such as CDP, setting science-based climate targets, responding to investors, and pursuing internal emissions-reduction commitments, all of which can extend expectations into their supply chains. Under current Science Based Targets initiative (SBTi) criteria, for example, companies with significant Scope 3 emissions may need to include value-chain emissions within their climate targets, while CDP enables major purchasers to request environmental information directly from suppliers. As a result, manufacturers can find themselves pulled into Scope 3 reporting because of another organization's disclosure or climate commitments rather than their own.
3. The Rising Data Quality and Assurance Bar
While more organizations are requesting Scope 3 information, expectations for the quality and transparency of that information are evolving. Draft revisions under development by the greenhouse gas (GHG) Protocol point toward greater disclosure around calculation methods, data types, data specificity, use of spend-based estimates, and whether Scope 3 emissions have been verified, partially verified, or not verified. While these requirements remain under development, the direction is clear: stakeholders increasingly want to understand not only the Scope 3 number, but also how it was calculated, what data supports it, where estimates were used, and the reliability of the underlying information.
4. Regulation Is Accelerating an Existing Trend
Regulations such as California's SB 253 are adding urgency to a shift that is already underway. Covered companies are moving into Scope 1 and Scope 2 reporting, with Scope 3 requirements under development for 2027 and subsequent years, but the impact extends beyond the companies directly subject to the law. As covered organizations prepare their Scope 3 inventories, they may request emissions and activity data from manufacturers throughout their supply chains. For that reason, manufacturers shouldn't view a regulatory deadline as the starting point—their next Scope 3 deadline could arrive sooner through a customer questionnaire, CDP disclosure cycle, procurement requirement, climate-target update, or request for verified emissions data.
5. Supplier Maturity and Data Readiness Gaps
Manufacturers face a unique challenge because they often sit directly in the middle of the value chain: larger customers are asking them for increasingly detailed emissions information while they are simultaneously trying to obtain better data from their own suppliers. Supplier GHG reporting maturity can vary dramatically, from companies with established inventories and primary data to suppliers that have never calculated emissions at all. Manufacturers therefore have to respond to increasingly sophisticated customer expectations while also engaging and educating their own supply base — a challenge that makes improving Scope 3 data much more complex than simply gathering additional internal records.
The Cumulative Effect
Together, these five forces explain why manufacturers are prioritizing Scope 3. Not because a mandate has directly reached them yet, but because customer pressure and corporate climate commitments are extending into supply chains. Tightening data quality expectations, regulation urgency, and a narrowing preparation window are converging at the same time. And manufacturers are caught in the middle, receiving requests from customers while trying to improve information from suppliers. "Verification-ready" now feels like a moving target rather than a fixed deadline.
What “Verification-Ready” Means
This phrase gets used loosely, so it's worth explaining it. Verification-ready does not mean every Scope 3 number is perfectly precise. Scope 3 accounting inherently involves estimates, assumptions, and secondary data where appropriate. The important question is whether those methods are reasonable, transparent, consistently applied, and supported by evidence.
When a Scope 3 inventory is reviewed by an independent third-party verifier, such as GreenCircle Certified, the verifier is looking for an inventory that can be followed, understood, and supported.
That includes:
A documented methodology. Which calculation approach was used for each category (spend-based, activity-based, supplier-specific) and why?
Traceable data sources. Where did underlying activity data, emission factors, financial information, supplier data, and assumptions originate, and can that trail be followed by someone outside your organization?
Reasonable assumptions, disclosed as assumptions. Estimates aren’t inherently a problem. The risk comes when assumptions aren't documented or estimates are presented with more certainty than the underlying data supports.
A clear data quality assessment. Which categories rest on primary data, and which still rely on secondary or spend-based proxies? That distinction should be documented, not assumed.
A documented approach to improvement. Where better data isn't currently available, can the organization explain the limitation and demonstrate how it plans to evaluate and improve data quality over time? The difference is what separates a defensible figure from one that can’t withstand scrutiny.
A Reminder of the Language: Verified, Not Certified
Regardless of where your Scope 3 work stands, the terminology used to describe it matters. Under ISO 14064-3, the international standard addressing verification and validation of greenhouse gas statements, an independent verifier evaluates the GHG statement and the evidence supporting it.
Certification applies to a management system, or a product assessed against a defined standard. Verification confirms that a specific claim, in this case, an emissions figure, holds up against the evidence behind it.
Using that distinction correctly in your own disclosures is a small detail that signals a larger one: that you understand exactly what kind of assurance stands behind your numbers.
Sara’s Final Thought
The Scope 3 Squeeze is not a single event with a single deadline. It is five pressures — customer demand, rising data standards, a closing preparation window, reputational exposure, and a manufacturer's position in the middle of the supply chain converging at once, ahead of the regulation that will eventually make the requirement official.
Manufacturers who treat "verification-ready" as a direction to move in, rather than a box to check on a future date, will be the ones who will be better positioned to respond as Scope 3 expectations continue to evolve. Start with the methodology. Start with the documentation. Then improve it over time.
The goal isn't to have perfect Scope 3 data on day one. It's to have a Scope 3 inventory you can explain, support, and improve when the next stakeholder asks for it.
About Sustainable Sara
Sustainable Sara is GreenCircle Certified's in-house certification officer and your go-to source for navigating sustainability claims, audits, and emissions reporting. She's deeply knowledgeable, fiercely passionate about environmental integrity, and believes that every company — no matter the size — can make credible, verifiable sustainability progress.
Connect with Sara at SustainableSara@greencirclecertified.com