The 2015 Paris Agreement defined how companies should report their carbon emissions. The outcome of that was the GHG protocol for carbon emission scopes. The GHG Protocol defines Scope 1 as “Direct GHG emissions occur from sources that are owned or controlled by the company”, Scope 2 as “GHG emissions from the generation of purchased electricity consumed by a company” & Scope 3 as “a reporting category that allows for the treatment of all other indirect emissions”. Since 2015, companies have predominantly focused on Scope 1 & 2 as these are comparatively easier to determine. However, data illustrates that 70% of all emissions are Scope 3. As a result, most corporate sustainability reports are accurate on Scope 1 & 2 carbon emission reporting but struggle to provide evidence of Scope 3 emissions. 

In January 2024, a study of 1500 global suppliers by Reuters revealed that a mere 8% of suppliers manage to report Scope 3 emissions. The significant gap in comprehensive Scope 3 reporting highlights the challenges faced in collating and managing disparate and siloed datasets across system boundaries outside the organization.  

This disparity highlights the need for a systemic evidence-based approach to improve Scope 3 emissions reporting across the value chain. Only with comprehensive data can companies identify the true environmental impact and develop effective strategies to mitigate these impacts. 

Why is Scope 3 Difficult 

Transparency and accuracy are critical for tracking Scope 3 emissions and the foundation of a robust sustainability strategy. Building a sustainable supply chain requires transparency from all stakeholders, which are often dispersed and complex to quantify. Regardless, clear visibility into the sustainability practices and emissions data creates a trustworthy foundation for Net Zero Decarbonization and a cooperative ecosystem.  

Obtaining accurate and complete emissions data from suppliers, logistics providers, and distributors is often arduous. The complexity of gathering and verifying data across a wide range of sources is a significant barrier to comprehensive Scope 3 reporting. However, this challenge is simplified with the right tools and strategies. 

How can GenAI Micro Models be Implied to Address Scope 3 

Generative AI (Gen AI) technology is a game-changer in simplifying and automating Scope 3 emissions reporting. AI-powered data processing streamlines the process of gathering information from publicly available data sources and with Micro Models internal ERP and systems of record. AI and machine learning can process vast amounts of data quickly and accurately, identifying patterns and insights that would be impossible to detect manually. The GenAI Micro Models detail carbon life cycle stages with significant environmental burdens, guiding improvement plans effectively. The solution enables companies to track their entire carbon footprint and implement reduction strategies, thus making substantial contributions to global emission targets and sustainability efforts, moving towards the Paris Agreement’s critical goal. 

Sustain360°™ for Seamless Scope 3 Reporting 

Sustain360°™, an AI-driven sustainability platform, is designed to simplify and automate the reporting of Scope 3 GHG emissions. Sustain360 acts as an automated calculator for sustainability, effectively implementing decarbonization strategies and helping you reach net-zero goals 3x faster than other tools.  

With Sustain360°™’s powerful GenAI Micro Models’ capabilities, customers can categorize carbon and financial data to align Net Zero strategies to business goals.  

Key Benefits of Sustain360°™ 

• Automated Scope 3 Classifications: Automatic classification of ingested data sets according to GHG Protocol using a knowledge graph, enabling streamlined accounting and minimizing the requirement for manual intervention. 

• GenAI Recommendation Engine: Evaluates and compares the baseline carbon assessment (materials, energy sources, chemicals, supply chains) with lower cost and lower carbon alternatives using GenAI recommendations. 

• Modern Graph Database: The use of Graph Database technology creates a paradigm shift by identifying the carbon pathways from producers to consumers automatically and eliminates the need to manually maintain data relationships.

• Automated Data Transparency: Automatically ingests supplier data into a knowledge graph, including location, transport methods, and materials used.  

• Supply Chain Metrics: Automatically calculates the transportation carbon footprint, visualizes the supplier network and identifies opportunities to capitalize on local sourcing incentives. 

Conclusion 

With the innovative GenAI Micro Model capabilities of Sustain360°™, simplifying and automating Scope 3 emissions reporting NOW is not just an option—it’s the way forward for any company committed to genuine sustainability. So, let’s get started—your sustainable future awaits! 

For more information contact us at info@sustain360.ai or click to request a demo.