Global Scope 3 Emissions: A Continental Overview

Scope 3 emissions, which encompass indirect emissions across a company's value chain, are increasingly under scrutiny worldwide.

However, the commitment to tackling these emissions varies significantly by continent due to differences in regulatory frameworks, economic priorities and sustainability goals.

Here, Scope 3 Magazine takes a look at how different continents are working to address Scope 3 emissions.

Europe: Leading the charge in Scope 3 commitments

Europe stands at the forefront of global efforts to reduce Scope 3 emissions, driven by comprehensive regulations and ambitious corporate targets.

Regulatory frameworks and initiatives: 

• Corporate Sustainability Reporting Directive (CSRD): Beginning in 2024, the European Union will require large companies to report on their Scope 3 emissions as part of the CSRD. The directive is a significant step in standardising sustainability reporting across the continent.
• Science-Based Targets Initiative (SBTi): Many European companies have aligned their Scope 3 reduction goals with the SBTi, aiming for targets that are consistent with the latest climate science.
• Carbon Border Adjustment Mechanism (CBAM): The EU's CBAM is designed to prevent carbon leakage and will indirectly impact Scope 3 emissions by imposing carbon costs on imported goods.
• Sustainable Finance Disclosure Regulation (SFDR): The regulation requires European financial institutions to disclose their Scope 3 emissions, promoting transparency and accountability.
• European Green Deal: Aiming for climate neutrality by 2050, this initiative is driving the continent's aggressive Scope 3 emissions reduction strategies.

North America: A mixed approach to Scope 3 reporting

North America's approach to Scope 3 emissions is varied, reflecting the region's different levels of regulatory oversight.

United States: 

• State-level initiatives: While there is no federal mandate for Scope 3 reporting, states like California are introducing their own requirements.
• Corporate voluntary reporting: Many large US companies voluntarily set Scope 3 targets, responding to investor demands and public pressure.
• Proposed SEC climate disclosure rules: The Securities and Exchange Commission (SEC) is considering regulations that may require some companies to include Scope 3 emissions in their climate disclosures.

Canada: 

• Net-Zero Emissions Accountability Act: The legislation sets the stage for greater emphasis on Scope 3 emissions as Canada works towards its net-zero goals.

Asia: Diverse approaches across the continent

Asia presents a varied landscape regarding Scope 3 emissions commitments, with different countries at different stages of progress.

Japan: 

• Mandatory Reporting: Under its revised Act on Promotion of Global Warming Countermeasures, Japan requires companies to report Scope 3 emissions, positioning the country as a regional leader.

China: 

• Voluntary Disclosure: While not mandated, China encourages companies to disclose Scope 3 emissions through its Environmental Information Disclosure System, reflecting a growing awareness of the issue.

Singapore: 

• Climate-Related Disclosure Guidelines: Singapore has introduced guidelines that include Scope 3 emissions, focusing on listed companies and their climate impact.

Africa: An emerging focus on Scope 3 emissions

Africa is still in the early stages of addressing Scope 3 emissions, with significant progress concentrated in a few countries.

South Africa: 

• Carbon Tax Act: The legislation indirectly addresses Scope 3 emissions by taxing carbon-intensive activities, leading the continent in this area.
• Broader Trends–Adaptation Priorities: Many African nations prioritise climate adaptation over mitigation, influencing their focus on Scope 3 emissions.

South America: Growing awareness and action

South America is becoming increasingly aware of the need to address Scope 3 emissions, with several countries beginning to take action.

Brazil: 

• Voluntary ESG Reporting Guidelines: Brazil's financial sector has introduced guidelines that include Scope 3 emissions, signalling a shift towards greater sustainability.

Chile & Colombia: 

• Carbon Taxes: Both countries have implemented carbon taxes, with Chile considering expanding its scope, which could impact Scope 3 emissions management.

Oceania: Proactive measures in Scope 3 reporting

Oceania, particularly Australia and New Zealand, are taking proactive steps in Scope 3 emissions reporting.

Australia: 

• Corporate Emissions Reduction Transparency (CERT) Report: The initiative encourages companies to voluntarily report their Scope 3 emissions, fostering a culture of transparency.

New Zealand: 

• Mandatory Disclosures: New Zealand's Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 requires certain entities to disclose Scope 3 emissions, showcasing the country's commitment to comprehensive climate action.

Europe leads, but the world is catching up

Europe remains the global leader in Scope 3 emissions commitments, backed by stringent regulations and ambitious corporate goals.

However, other continents are making notable strides, with North America and Oceania showing significant progress.

As global awareness of climate change grows, the trend towards increased transparency and action on Scope 3 emissions will likely accelerate, driven by regulatory pressures, investor demands and corporate sustainability goals.

Receive the next edition of Scope 3 Magazine by signing up for its newsletter. 

As part of this portfolio, make sure you check out Procurement Magazine and also sign up to our global conference series - Procurement & Supply Chain LIVE.

Also check out our Sister Brand, Sustainability Magazine and sign up to its global conference series - Sustainability LIVE.

Scope 3 Magazine is a BizClik brand.​​​​​​​