Reading a Supplier's Carbon Report: A Buyer's Checklist

At I.D. Me, our job is to be our clients’ brand steward and first line of defense — a trusted procurement advocate standing between your brand and the supply-chain, quality, safety, and sustainability risks that travel with physical products. More suppliers in our industry now publish carbon reports, and buyers are being asked to judge them. This checklist is for that job.

If you are new to the terms, start with our companion article, Scope 1, 2, and 3, Explained. In short: Scope 1 is what a company burns, Scope 2 is the energy it buys, and Scope 3 is everything else in its value chain, including the goods it buys from suppliers.

Why Scope 3 is where to look

In the supplier reports we reviewed that disclose all three scopes, Scope 3 was the largest share of the footprint every time. At distributors and companies that outsource their production, it ran from about 95% to more than 99% of the total. At a hard-goods maker with its own factories it was about 97%, and at apparel makers that run their own factories, about 78% to 93%. (These shares use each company’s market-based Scope 2 figure. The exception is one supplier whose market-based Scope 1 and 2 total had been reported as zero through offsets and certificates; for that supplier we used the location-based figure.)

These reports are not directly comparable. Companies use different boundaries, base years, and methods. The point for a buyer is narrower: a carbon report that leaves out Scope 3, or counts only part of it, leaves out most of the footprint.

Seven questions to ask

1. Does the report cover all three scopes? A report that stops at Scope 1 and 2 covers only a company’s own facilities and vehicles (for a manufacturer, that includes its factories). It leaves out the emissions in the goods it buys from suppliers.

2. Which Scope 3 categories are counted? The GHG Protocol divides Scope 3 into fifteen categories. Many companies measure only some of them. One headwear company we reviewed reported Scope 3 at about 99% of its total while stating that only part of its Scope 3 had been measured. Ask which categories are in, and whether purchased goods is one of them.

3. Is Scope 2 reported both ways? The GHG Protocol requires companies that operate where electricity contracts and certificates are available to report Scope 2 by two methods. The “location-based” figure reflects the grids a company actually draws from. The “market-based” figure reflects the electricity it has chosen through contracts and certificates (or, where it has none, the grid’s residual mix), and can be near zero. A report that shows only a market-based figure shows only half the picture.

4. Are offsets kept separate? Under the GHG Protocol, offsets are reported separately from a company’s emissions; they do not reduce the reported Scope 1, 2, or 3 figures. One supplier we reviewed reported its market-based Scope 1 and 2 total as zero for two years and footnoted that the zeros resulted from certified offsets and renewable-energy certificates; its location-based figure for the latest year was about 7,000 tonnes. Ask what the totals are before offsets.

5. Has anyone outside the company checked the numbers? Several of the reports we reviewed say their emissions figures were checked by an outside party, but few say at what level. One apparel maker obtained limited assurance on select indicators from an outside firm; one distributor reported that its 2024 Scope 1 and 2 data were undergoing limited assurance. Ask which figures were assured, by whom, and at what level.

6. Is the reduction target validated, or only announced? The Science Based Targets initiative (SBTi) validates corporate targets against climate science. A company can commit to setting a target with the SBTi before any target has been validated. Several suppliers in our industry have validated targets, and some of those cover Scope 3 emissions from purchased goods. Ask whether the target is validated and whether it covers Scope 3.

7. What is the company asking of its own suppliers? Because most of the footprint sits upstream, the strongest programs set expectations for their suppliers. One distributor has a goal of having 70% of its suppliers (by spend) with “climate change reduction targets that are aligned with science” by 2028. In its 2023 report, another supplier set a goal of 60% of its suppliers adopting science-based targets by the same year. Ask whether the supplier has a goal like this, and how it tracks progress.

What a good answer looks like

A supplier does not need perfect answers to all seven. Scope 3 measurement is still developing across the industry, and most reports acknowledge gaps. What separates a credible report is that it states its boundaries, reports both Scope 2 methods, keeps offsets separate, and says plainly which parts of Scope 3 it has not yet measured.

Back to the point

These are questions any buyer can put to a supplier. As your brand steward, we would rather you ask them than take a carbon claim at face value. Knowing what a carbon report does and does not count is part of brand protection: it keeps a supplier’s number from becoming your claim before anyone has checked what it covers.