As businesses race to meet Scope 3 reporting mandates, including Singapore’s 2026 deadline[1], a critical question arises: Are we reporting just for compliance or for progress? While reporting is an essential step, it is becoming clear that a fixation on ticking regulatory boxes may overshadow the transformative action needed to address emissions at their source.
The Practical Challenge of Scope 3 Emissions
Scope 3 emissions, spanning supply chains and product life cycles, represent the majority of emissions for most businesses. Yet they are notoriously complex to measure and manage. According to the non-profit environmental disclosure platform Carbon Disclosure Project (CDP), only 41% of companies collect data from their suppliers, highlighting significant gaps in the current system[2]. Moreover, only 28% actively engage suppliers to reduce emissions, leaving a significant opportunity for impactful action unaddressed. Emerging markets, which play a key role in global supply chains, often lack the resources and expertise to produce accurate emissions data. This results in estimates that are difficult to verify and inconsistencies across industries.
PwC highlights that many companies struggle with setting boundaries for Scope 3 emissions, which can lead to either underreporting or overwhelming amounts of unstructured data[3]. Clear methodologies and tools to define and measure emissions are essential for overcoming this challenge, particularly as regulatory scrutiny intensifies.
The challenge is compounded by the fragmented nature of reporting standards. A 2023 study by McKinsey notes that up to 90% of a company’s greenhouse gas emissions are from Scope 3 activities in sectors like manufacturing and retail[4]. Without standardized metrics, companies struggle to align on actionable goals, leading to a patchwork of inconsistent efforts. The danger lies in creating a system that prioritizes compliance over tangible reductions—a risk we cannot afford in the fight against climate change. Therefore, it is hopeful that the new set of standards released by the International Sustainability Standards Board (ISSB) will spur efforts to unify global sustainability reporting rules through the aligning of more than 140 countries’ financial accounting practices. Companies across jurisdictions will then be able to disclose sustainability and climate information more uniformly.
Unlocking Transformative Change
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To address the challenges of Scope 3 emissions, companies must go beyond surface-level solutions and tackle the problem at its roots. Instead of engaging all suppliers uniformly, businesses should focus on high-emission contributors. By identifying and collaborating closely with these suppliers, companies can encourage using specific decarbonization measures such as subsidized renewable energy projects or shared access to green technologies. For example, power purchase agreements (PPAs) with suppliers and customers help add more renewable electricity into power grids which will contribute to the global green energy transition. These targeted efforts ensure that resources are directed where they will have the most impact.
Accountability is another key element of transformative change. Companies need to embed emissions goals into procurement policies to work more with sustainable suppliers. By including climate action in supplier rating systems, suppliers can be awarded bonus points when they actively participate in climate action programs, set targets, act and deliver actual emissions reductions. This approach not only incentivizes action but also ensures that suppliers are equally invested in achieving sustainability objectives. Penalizing non-compliance through reduced business allocations can further reinforce the urgency of meeting climate targets. Improving the quality of suppliers creates a win-win situation to ensure a just transition for suppliers and businesses.
The integration of advanced technologies is critical for improving data accuracy and enabling effective decision-making through the use of meaningful data in both daily operations and reporting. AI-powered monitoring systems can offer real-time insights into supply chain emissions by cooperating with cloud-based interfaces. These technologies can streamline data collection, reduce redundancies, and enhance trust among stakeholders. An industry-wide collaboration to build standardized platforms for emissions tracking would amplify these benefits.
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Businesses need to direct their efforts to reduce absolute emissions in alignment with the Science Based Targets initiative (SBTi). This plan goes further and faster than any other previous plan in place to reduce emissions across the entire value chain. Companies must focus on systemic reductions by strategically investing in operations to reduce impact, seeking out innovative ways to improve products’ energy efficiency, engaging with sustainable suppliers and transitioning to low-carbon logistics. For instance, adopting circular product designs created for reusability and recyclability can significantly lower lifecycle emissions while meeting growing consumer demand for sustainable solutions. Publicly disclosing product-level carbon footprints through labeling can further drive consumer awareness and incentivize sustainable purchasing decisions.
Governments and industry leaders also have a pivotal role to play in defining clear pathways for high-emission sectors. Tailored roadmaps that align regulations with the unique challenges of these industries can provide the structure and accountability needed for meaningful progress. According to the International Energy Agency, such targeted interventions could reduce global CO2 emissions by 2.3 gigatons annually by 2030[5].
Turning Reporting into Impact
It’s time to shift the conversation around Scope 3 emissions from compliance to impact. Reporting should serve as a strong foundation for action and should be built in the best way possible. Businesses must capture and leverage data to drive systemic change now and for the future — whether through redesigning supply chains, investing in clean technologies, or advocating for supportive policies.
The road ahead demands courage and leadership. Tighter reporting requirements on Scope 3 greenhouse gas emissions as set by the Singapore ExchangeRegulation will kick in from 2026[6] and businesses have a choice: focus narrowly on meeting regulatory requirements or seize the moment to lead on sustainability. For those willing to step up, the rewards extend far beyond compliance—they include a competitive edge in a rapidly greening economy and a legacy of real climate action.
Jitender Khurana is the general manager, systems and services, Asia Pacific of Signify.
[1] SGX Group: "SGX RegCo to Start Incorporating IFRS Sustainability Disclosure Standards," 2024.
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[2] Carbon Disclosure Project (CDP): "Trends Show Companies Are Ready for Scope 3 Reporting with U.S. Climate Disclosure Rule," 2023.
[3] PwC: "How to Measure and Manage Scope 3 Emissions," 2023
[4] McKinsey & Company: "The State of Corporate Climate Action, 2023."
[5] International Energy Agency (IEA): "Decarbonizing Industries: Key Policies for Achieving Net Zero,"
[6] Singapore Exchange Regulation (SGX Regco): “Sustainability Reporting”
