From Burden to Blueprint - Scope 3 Driving a New Era of Supply Chain Innovation

For years, Scope 3 emissions reporting languished on the fringes of corporate strategy—an annual compliance ritual, disconnected from the real engines of procurement, planning, and production. But that era is fading fast. Faced with tightening regulations, mounting investor scrutiny, and rising climate risk, supply chain leaders are discovering a powerful new truth: the carbon data once collected purely for auditors now holds the potential to redefine how businesses buy, build, and compete. This two-part Cover Story, to be featured in subsequent issues, explores that transformation in depth, revealing how leading companies are using Scope 3 data to spotlight hidden supplier vulnerabilities and inefficiencies that traditional procurement tools often miss. What began as an ESG checkbox is fast evolving into a strategic lever for resilience, agility, and competitive advantage in a low-carbon economy…

Once dismissed as a reporting burden, Scope 3 emissions tracking is now emerging as a source of operational insight and strategic leverage. As regulatory frameworks like the EU’s Corporate Sustainability Reporting Directive and California’s Climate Corporate Data Accountability Act come into force, supply chain leaders face growing pressure to account for emissions well beyond their direct operations— from suppliers and freight partners to product use and end-of-life disposal. What was once considered an ESG side task now sits at the core of how progressive organizations build smarter, leaner, and more resilient supply chains.

SCOPE 3 AS A SOURCE OF SUPPLY CHAIN INTELLIGENCE

Leading companies have moved beyond mere compliance. They’re using Scope 3 emissions data to guide decisions on supplier performance, network design, and investment prioritization. Properly mapped emissions hotspots reveal far more than carbon intensity: they uncover operational vulnerabilities, sourcing inefficiencies, and supplier relationships that may not hold up under future regulatory or  environmental pressures.

These insights already inform continuity planning and category strategies. Several global manufacturers now embed emissions metrics into supplier scorecards—not only to improve ESG outcomes, but also to flag financial or reputational risks invisible to traditional procurement analysis.

The value of Scope 3 intelligence lies in its specificity. Industry benchmarks alone no longer suffice. Even within the same sector, two companies can have dramatically different Scope 3 footprints depending on tier-2 and tier-3 supplier geography, materials mix, or product lifecycle choices. By shifting from sector averages to supplier-specific emissions data, emissions tracking becomes truly operational—deeply integrated into risk evaluation and the design of more agile supply networks.

FROM DATA BOTTLENECK TO DESIGN INPUT

Historically, hesitancy around Scope 3 reporting stemmed from its perceived data burden. That’s now changing. AI and automation are streamlining emissions calculations, simulating sourcing and routing scenarios, and closing data gaps that once made Scope 3 impractical at scale. Digital platforms can model emissions where primary data is unavailable, create digital twins to visualize carbon impact in real time, and build unified datasets connecting procurement, operations, and sustainability teams. This isn’t about ticking a compliance box—it’s about making carbon data a practical design input for supply chain optimization and stress-testing.

In mature organizations, emissions metrics now appear alongside cost, lead time, and service performance—transforming sustainability from an annual reporting task into a continuous lever for supply chain performance. And because AI systems can refresh emissions models in near real time, supply chain leaders can anticipate where the next pressure point may arise—whether driven by new regulation or shifting stakeholder expectations.

FROM EMISSIONS MAPPING TO SUPPLY CHAIN REENGINEERING

The most forward-looking supply chain leaders aren’t just visualizing their emissions—they’re using these insights to reengineer how their supply chains operate.

Here’s where the real shift is happening: emissions data is beginning to influence structural decisions that were once made purely on cost or service grounds—like where to source materials, how to allocate production across regions, and which suppliers to strengthen partnerships with or gradually phase out. One global industrials firm, for example, discovered that partnering with a more carbon-intensive supplier in the short term actually enabled them to consolidate shipments—lowering overall freight emissions and costs across the network. That insight emerged not from instinct, but from data they weren’t even using two years ago.

This is the level of thinking that separates compliance from competitive advantage. Scope 3 isn’t merely a sign of ESG maturity—it’s becoming a lens through which smarter operational trade-offs are made. For supply chain leaders determined to build resilience and agility into their ecosystems, it’s no longer a burden. It’s a blueprint.

Against this backdrop of shifting Scope 3 priorities, we turn to the experts to share how they perceive and navigate this change.

Scope 3 Reporting evolving from a Regulatory Burden to a Strategic Lever

Scope 3 reporting has evolved beyond compliance—driven by regulation, risk, and rising stakeholder expectations—to become a powerful source of competitive advantage.

Swaroop Banerjee, VP – Corporate Sustainability, JSW Group: Scope 3 reporting has evolved from a regulatory burden into a strategic lever, driven by growing stakeholder expectations, climate regulations, and the need for value chain transparency. Leading companies now use Scope 3 data to gain competitive advantage by identifying emissions hotspots, optimizing supply chains, and collaborating with lowercarbon emissions suppliers. This not only improves environmental performance but also enhances cost efficiency and resilience. With customer demand shifting toward low-emission products especially in sectors like automotive and construction, companies leveraging Scope 3 insights can differentiate themselves in the market. Furthermore, preparedness for evolving regulations such as the EU Carbon Border Adjustment Mechanism (CBAM) reinforce the business value of Scope 3 tracking. At JSW Steel, we are initiated tracking of Scope 3 emissions tools using digital tools thus enhancing traceability and embedding value chain decarbonization into our net zero roadmap and transforming emissions transparency into a driver of long-term growth and innovation.

Bipin Odhekar, Head – Sustainability, EHS & Operations Excellence, Marico India Ltd.: Scope 3 reporting has evolved from a compliance exercise to a critical driver of business strategy. This shift is fuelled by a combination of regulatory momentum (BRSR, TCFD, CSRD), escalating investor demands for credible climate action, and rising consumer expectations for responsible brands. Scope 3 emissions contribute to large part of companies’ emissions (60%-80% or more). Since, it covers large activities like materials, upstream and downstream logistics, different stages of product life cycle, any improvement Scope 3 performance, provides financial opportunity and operational efficiency.

For Marico, where over 95% of total emissions arise from Scope 3, this transition is both urgent and transformative. In FY25, we reported 549808 tCO?e in absolute Scope 3 emissions—showing a 14.7% reduction in Scope 3 Intensity from FY19 baseline. We leverage this data beyond reporting—to drive smarter decisions in procurement, product design, and packaging.

Vishal Bhavsar, Head ESG, Multiples Alternate Asset Management: The initial phase of corporate sustainability was driven largely by voluntary disclosures and carbon footprinting, which introduced the concept of Scope 3 emissions. Over the past decade, however, new global regulations—such as the EU’s CSRD and Corporate Sustainability Due Diligence Directive (CSDDD)— alongside domestic frameworks like India’s BRSR, have pushed Scope 3 to the forefront. At the same time, stakeholder expectations, particularly around net zero commitments, have intensified. Initiatives like the Science Based Targets Initiative (SBTi) require companies to set ambitious Scope 3 reduction goals, reinforcing its importance.

As companies pursue net-zero targets, they've come to recognize that the majority of their emissions—and significant risks—lie beyond their direct control in the value chain. This realization has reframed Scope 3 from a compliance requirement to a strategic opportunity. In many industries, value chain activities such as procurement, transportation, and logistics account for 40–70% of operating costs and contribute more than 70% of emissions. Tackling these areas not only helps lower environmental impact but also unlocks operational efficiencies, cost reductions, and margin improvements—turning climate action into competitive advantage.

Jaswinder Saini, VP – Procurement, Tata Play Ltd.: At Tata Play, Scope 3 reporting is no longer viewed as just a compliance requirement—it has become a strategic tool to drive sustainability and operational efficiency. As consumer expectations for environmental responsibility rise, transparency around value chain emissions enhances brand credibility and trust. More importantly, mapping emissions across third-party manufacturing, and outsourcing of various services helps us uncover inefficiencies and redesign processes. These insights fuel not only our climate goals but also unlock tangible business value.

Smitha Shetty, Regional Director – APAC, Achilles Information Ltd.: Scope 3 emissions make up the majority of total emissions in industries such as manufacturing, retail, and consumer goods, often ranging from 70 to 95 percent. Until recently, tracking these missions was largely seen as a regulatory formality or a way to meet investor expectations. That mindset is shifting.

Today, emissions data is becoming a powerful tool for transformation. The shift is being driven by increased stakeholder scrutiny, improved data availability, and a clearer understanding of the financial and reputational risks associated with supply chain emissions.

Leading organisations are going beyond measurement. They are using Scope 3 insights to uncover inefficiencies, redesign sourcing strategies, and partner with suppliers who prioritise low-carbon operations. This not only helps reduce environmental impact but also strengthens business resilience. In highly competitive sectors, the ability to demonstrate verified emissions reductions at the supplier level is fast becoming a differentiator in procurement, investment, and consumer choice.

As instruments like the Carbon Border Adjustment Mechanism (CBAM) and the Carbon Credit Trading Scheme (CCTS) begin to link emissions intensity with trade and market access, mapping and managing Scope 3 emissions is becoming essential. It is no longer a back-office exercise but a strategic priority for safeguarding long-term competitiveness and credibility.

Veeshwass Kulkarni, General Manager – Procurement, Legrand India: The evolution of Scope 3 reporting from a box-ticking exercise into a strategic advantage is driven by several converging forces: tightening regulations, growing investor scrutiny, rising customer demand for sustainable products, and breakthroughs in data analytics and AI. But at its core, the real catalyst is a shift in mindset. Forward-thinking organizations now view emissions data not just as a compliance requirement but as critical business intelligence that unlocks new opportunities for risk mitigation, efficiency, and competitive differentiation.

Given that Scope 3 emissions often account for more than 70% of a company's total carbon footprint, mapping these emissions across the value chain provides deep insight into supplier vulnerabilities, inefficiencies in logistics, and the hidden carbon costs embedded in product lifecycles. Armed with this data, companies can make proactive decisions—whether it’s diversifying suppliers, localizing production, or redesigning products—to mitigate risk and strengthen supply chain resilience.

Procurement teams, traditionally focused on cost and quality, are now becoming strategic gatekeepers for carbon performance. At Legrand, for instance, we embed emissions criteria directly into supplier scorecards, favouring partners who have certified emissions-reduction commitments. This doesn’t just lower our Scope 3 footprint—it also fosters innovation and resilience throughout the supplier network.

At the same time, AI and advanced analytics have made it possible to estimate and simulate emissions even when supplier data is incomplete. By blending spend data, material inputs, and logistics details, companies can model the impact of alternative sourcing strategies or product design changes before taking action.

Financial strategy is evolving too: some companies are linking Scope 3 KPIs directly to capital costs, working with banks to offer preferential financing rates to suppliers with strong sustainability performance. This sends a clear signal to investors and customers alike that sustainability isn’t an add-on—it’s integral to business strategy.

Finally, as B2B customers in sectors like construction, data centers, and infrastructure increasingly demand low-carbon products, companies able to monitor and cut Scope 3 emissions are better positioned to win contracts and lead the market.

Dipanjan Banerjee, Chief Commercial Officer, Blue Dart: At Blue Dart, we’ve seen firsthand how Scope 3 emissions reporting has transformed from a compliance task into a key strategic advantage. This shift is driven by increasing stakeholder expectations—investors, regulators, and consumers now demand transparency and accountability across the value chain. Leading companies are leveraging this data to redesign supply networks, select greener partners, and unlock efficiencies. For us, aligning with DHL Group’s Science-Based targets means that every piece of emissions data becomes a lever for long-term value creation.

Sandeep Chatterjee, Digital Supply Chain and Sustainability Leader, IBM: Companies have come to realize that sustainability and profitability aren’t mutually exclusive. In today’s highly interconnected supply networks, a siloed approach simply doesn’t deliver results. Scope 3 emissions for a manufacturer, for instance, directly correspond to Scope 1 and Scope 2 emissions of its suppliers—meaning that collaboration is essential.

Rather than relying solely on punitive measures or compliance-driven frameworks, forward-looking organizations are co-investing with their supply partners, offering technical assistance, capacity building, and shared innovation initiatives. By building trust and transparency in the ecosystem, these companies transform emissions data into actionable insights, enabling smarter sourcing, product design, and logistics decisions that ultimately deliver both environmental and financial benefits—turning sustainability from a cost centre into a competitive edge.

Varun Chopra, Executive Chairman, GEAR: Scope 3 Emissions account for about 75-80% of all Emissions – hence it is imperative for organisations that are moving towards Net Zero or are setting up their Net Zero Targets, to have a clear measurement and understanding of Scope 3 emissions. And measurement of Scope 3 emissions is the most challenging, hence organizations that get a first mover advantage will be able to gain significant leverage from a ESG and BRSR standpoint.

Uncovering Hidden Risks Through Scope 3 Mapping

By analyzing supplier- and product-level emissions, companies are surfacing vulnerabilities and sourcing inefficiencies that traditional procurement data alone can’t reveal.

Swaroop Banerjee: Leading organizations, including JSW Steel, are increasingly leveraging Scope 3 emissions mapping to identify hidden risks across the value chain risks that often go unnoticed through conventional procurement analysis. Scope 3 mapping provides visibility into aspects of the value chain that traditional procurement metrics often overlook. At JSW Steel, it has helped us identify high-emission hotspots in upstream raw materials and logistics, enabling us to have targeted discussions with suppliers on decarbonisation. It also supports broader risk assessments for example, exposure to carbon pricing or energy transition risks in certain geographies. These insights are instrumental in building a future-fit supply chain that is both economically and environmentally sustainable.

Further, this mapping is integrated with physical climate risk assessments to evaluate supplier exposure to extreme weather events, water stress, and regional climate vulnerabilities. High-emitting or climate-sensitive suppliers are prioritized for engagement or mitigation strategies. This dual lens emissions and climate vulnerability enables a more robust, forward-looking risk management framework, aligning JSW Steel’s sourcing decisions with its long-term decarbonisation and resilience goals.

Bipin Odhekar: Traditional procurement and supply chain analysis tends to focus on immediate, quantifiable factors such as cost, quality, delivery timelines, and supplier reliability. However, such conventional approaches may miss the broader systemic risks—especially those linked to environmental externalities, regulatory shifts, and long-term operational vulnerabilities. This is where Scope 3 emissions mapping plays a transformative role. By enabling deep, end-to-end visibility across both upstream and downstream value chains—including second- and third-tier suppliers—Scope 3 analysis uncovers hidden carbon hotspots and risk clusters that conventional procurement metrics simply cannot detect.

Organizations are using scope 3 data to drive operational efficiencies, supply assurance, reputation management and regulatory compliance.

Operational cost volatility associated with future waste management, landfill charges, and potential carbon taxes related to non-circular packaging materials. These insights have directly influenced Marico’s shift toward low-carbon, dematerialized, and recyclable packaging solutions. We have accelerated the adoption of circular packaging models, including reusable containers and materials designed for easy recyclability, thus mitigating both emissions and regulatory risks.

More importantly, Scope 3 mapping has allowed us to pre-emptively de-risk our supply chain by prioritizing supplier partnerships and engagements with low-emission profiles or commitments to decarbonization. Regulatory changes under India’s evolving BRSR framework, which expects larger companies collect and assess ESG data from its value chain. This eventually asking organizations to map its scope 3 emissions.

By embedding this level of intelligence into sourcing and supply chain decision-making, we are building a more agile, risk-resilient, and future-fit value chain—one that is better equipped to navigate both climate risks and shifting market expectations.

Vishal Bhavsar: Scope 3 emissions mapping is rapidly emerging as a strategic tool for uncovering hidden vulnerabilities across the value chain that traditional procurement analysis often overlooks. By quantifying indirect emissions—from upstream procurement and transportation to downstream distribution and product use—organizations gain deep visibility into carbon-intensive nodes that are susceptible to future regulatory penalties, reputational risks, and operational disruptions. This level of granularity enables companies to identify suppliers with low climate resilience, inefficient routes, or dependence on high-emission materials that could inflate costs or threaten compliance. Crucially, the process also reveals data gaps and inconsistencies beyond Tier 1 suppliers, helping strengthen ESG transparency and investor confidence. By integrating emissions intelligence into sourcing, logistics, and product design decisions, leading firms are proactively mitigating transition risks and improving resource efficiency—transforming Scope 3 mapping from a compliance exercise into a driver of business resilience and competitive insight.

Jaswinder Saini: For Tata Play, Scope 3 mapping has revealed dependencies and environmental hotspots in our hardware supply chain, including set-top boxes and satellite dishes. By redesigning our set-top boxes to be more compact, we’ve reduced plastic usage, minimized packaging waste, and increased logistics efficiency by enabling more units per shipment. Additionally, localizing component manufacturing has cut transportation emissions while supporting job creation near our supplier locations. These decisions may have been overlooked by conventional procurement analysis but became visible through an emissions lens.

Smitha Shetty: Traditional procurement focuses on price, quality, and delivery timelines. Scope 3 mapping introduces a different lens. It reveals systemic issues that are often invisible through conventional metrics. Scope 3 data enable companies to go beyond short-term cost considerations. It provides a clearer view of supply chain health and helps identify vulnerabilities early, so they can build resilience and align their sourcing with both performance and sustainability goals.

When companies analyze emissions across their full supply chain, they start to see where carbon is concentrated. Often, those high-emission areas are where hidden risks reside. A supplier with a heavy emissions footprint may be relying on outdated, inefficient processes. This can indicate underinvestment, poor operational discipline, or exposure to regulatory change. Similarly, emissions hotspots tied to specific geographies may point to sourcing dependencies in unstable or high-risk regions.

Veeshwass Kulkarni: Traditional procurement has largely centered around costs, lead times, and quality metrics. Scope 3 emissions mapping, however, adds an entirely new layer of visibility—revealing hidden risks and inefficiencies that would otherwise remain out of view. One key insight comes from looking beyond immediate suppliers to deeper tiers in the value chain, where significant emissions often accumulate unnoticed. For example, through detailed emissions mapping, we discovered that some of our tier-2 suppliers were using outdated, coal-based processes or inefficient machinery. These practices were substantially inflating our product carbon footprint—insights that would have been invisible in standard procurement assessments.

Another valuable discovery emerged when we analyzed logistics flows. In some cases, smaller suppliers were sending frequent low-volume shipments using carbon-intensive transport modes. Emissions mapping highlighted that these fragmented deliveries were not just environmentally costly but also economically inefficient. This insight led us to consolidate shipments and redesign delivery routes, simultaneously lowering costs and reducing emissions. Ultimately, Scope 3 mapping empowers procurement teams to move beyond tactical purchasing decisions, enabling a more strategic, resilient, and sustainability-focused approach to supply chain design.

Dipanjan Banerjee: Scope 3 mapping gives us a broader lens to identify systemic inefficiencies—not just in terms of cost or delivery time, but in carbon intensity. For instance, we've identified that certain routes or suppliers, while efficient on paper, carry a higher carbon footprint due to outdated fleet technologies. This insight helps us to rethink our sourcing decisions, consolidate loads more effectively, and prioritize vendors who share our sustainability standards.

Sandeep Chatterjee: Traditional procurement tends to focus on Tier 1 suppliers—where the relationships, contracts, and costs are most visible. But when companies map Scope 3 emissions, they’re forced to dig deeper, because Tier 1 suppliers’ Scope 3 often represents Scope 1 and Scope 2 emissions of Tier 2 and Tier 3 suppliers. This multi-tier visibility brings to light hidden hotspots—such as highly carbon-intensive processes, outdated equipment, or geographic risk concentrations further upstream. Organizations have discovered unexpected vulnerabilities like dependence on a single Tier 3 supplier for a critical raw material or inefficient practices buried deep in the supply chain. These insights empower supply chain teams to proactively mitigate risks, diversify sourcing, or support upstream suppliers in adopting cleaner technologies.

Cracking the Data Granularity Challenge

Facing rising demands for supplier-specific emissions data, companies are deploying digital tools and AI to gain visibility deep into multi-tier supplier networks.

Swaroop Banerjee: As regulatory frameworks and stakeholder expectations increasingly emphasise transparency in value chain emissions, JSW Steel recognises the importance of improving data granularity and traceability across multi-tier supplier networks. Addressing the complexity of Scope 3 emissions, especially in hard-to-abate categories requires a structured, collaborative, and technology-enabled approach. We have adopted a phased strategy to enhance data quality, beginning with our most material supplier categories. Through direct engagement, we are encouraging suppliers to disclose activity-level emissions data and adopt standardised reporting formats. Capacity-building initiatives and technical support are being offered to suppliers, particularly small and medium enterprises (SMEs), to help them align with globally accepted emissions accounting protocols.

To improve traceability across tiers, we are also evaluating the use of digital tools such as supplier data platforms. These technologies can facilitate more accurate emissions mapping across upstream processes, beyond Tier-1 suppliers. Moreover, we are actively participating in industry-wide collaborations and working groups that aim to standardise Scope 3 data exchange and promote shared best practices. Over time, these collective efforts will help strengthen visibility, enhance supplier accountability, and support more informed decision-making aligned with our long-term decarbonisation targets.

Bipin Odhekar: Securing granular emissions data from multi-tier supplier networks remains a challenge—especially in industries like FMCG, where supply chains are fragmented and many MSMEs lack formal reporting structures. At Marico, we are advancing ESG data quality (including Scope 3 emissions) through a phased, materiality-led approach. We started mapping purchased goods & services, our largest emissions category, transitioning from generic emission factors to supplier-specific data for key inputs like copra, packaging board, and plastic resin.

Our strategy includes:

• Supplier Prioritization and traceability: Focusing on vendors with high emissions impact and their value chain.
• Capacity Building: Equipping suppliers—especially MSMEs—with tools and templates for emissions reporting.
• Digital Integration: Embedding ESG metrics into procurement platforms for automated data collection and monitoring.
• Third-Party Assurance: BDO India LLP provides limited assurance, driving credibility and supplier accountability.
• Industry Collaboration: Engaging in sectoral platforms to align reporting expectations and minimize duplication.

While Tier 2 and Tier 3 data remain difficult to obtain, we are building traceability through ISO 14001-certified systems, supplier engagement, and audit mechanisms. Over time, we see technology, regulation, and collaborative industry ecosystems enabling full-chain emissions visibility—turning transparency into a competitive advantage for climate-resilient supply chains.

Vishal Bhavsar: To address the mounting demand for supplier-specific emissions data, companies are turning to advanced technological solutions that automate data collection and consolidation across complex, multi-tier supply chains. This digital foundation enables organizations to harness predictive analytics and machine learning to generate granular insights—pinpointing emissions hotspots, inefficiencies, and climate-vulnerable partners. Blockchain, for instance, can trace the origin and sustainability credentials of raw materials in real time, enhancing both transparency and accountability.

Many organizations are deploying supply chain control towers—centralized platforms that offer real-time visibility and enable faster, informed decision-making. When paired with a digital twin—a virtual model of the end-to-end supply chain—companies can map physical flows, simulate carbon footprints, uncover sub-tier relationships, and identify risks and bottlenecks across their networks. These tools not only improve agility but also integrate emissions data into service, cost, and quality KPIs.

For example, a global pharmaceutical firm used Tier 1 purchasing data and industry-level emissions models to uncover high-impact emission sources buried deep in their Tier 2 and Tier 3 supplier networks. By linking these emissions back to specific Tier 1 partners, the company was able to engage suppliers with targeted, data-driven dialogues—initiating joint actions to lower emissions, strengthen compliance, and build resilience across the entire ecosystem.

Smitha Shetty: Achieving visibility across multi-tier or complex supplier networks is one of the most significant hurdles in Scope 3 reporting. While many companies have made progress with Tier 1 suppliers, where relationships are direct and data is more accessible, the most meaningful emissions risks often lie deeper in the supply chain.

To close this gap, leading organizations are moving away from fragmented and manual approaches toward integrated digital platforms that offer scalable, real-time, and verified supplier data. These companies are no longer simply requesting information from suppliers. Instead, they are fostering long-term collaboration and building systems that create mutual value.

Companies are also increasingly automating data collection and verification at scale. Rather than relying on industry averages or estimates, they are capturing real, activity-based data. Some are embedding emissions tracking directly into procurement systems, making carbon performance a standard part of supplier evaluation alongside cost, lead time, and quality.

The most important shift is the transition from a top-down compliance model to a more collaborative, two-way approach. When suppliers are treated as strategic partners and not just data sources, visibility improves throughout the entire supply chain. This leads to more accurate Scope 3 reporting and, over time, builds stronger, more transparent, and more resilient supplier networks.

Veeshwass Kulkarni: Capturing accurate supplier-specific emissions data across a multi-tier, often global supply chain remains a significant challenge—particularly in countries like India, where many small and medium enterprises may lack awareness, tools, or systems to track emissions data effectively.

To address this, companies are adopting a multi-pronged approach. First, Segmented Supplier Engagement allows us to classify suppliers based on their maturity. Larger, more advanced suppliers—such as multinationals or OEMs who already understand sustainability reporting—are asked to provide regular emissions data, with expectations formalized in contracts. Regular audits ensure consistency and credibility.

For smaller or less mature suppliers, the approach is more collaborative: investing time in capability-building initiatives and helping them set up their own carbon monitoring systems. This partnership-driven method ensures that even suppliers with limited resources begin to align with broader sustainability goals.

Additionally, AI-powered estimation tools help fill data gaps when direct supplier data is missing. By drawing on industry benchmarks, government datasets, and predictive models, companies can estimate emissions based on process types, geography, and material inputs—offering a reasonably accurate picture that supports decision-making.

Finally, collaboration across industries to develop standardized reporting frameworks and shared databases is critical. This collective approach not only reduces duplication of effort but also fosters transparency and consistency across the supplier network. Waiting for perfect, 100% complete data is unrealistic; instead, companies are combining direct supplier reports, modelled estimates, and shared industry frameworks to continuously improve data granularity over time.

Dipanjan Banerjee: It’s a complex challenge, but we’ve made headway through collaboration and technology. At Blue Dart, we work closely with suppliers to adopt standardized reporting that provide end-to-end visibility. Leveraging DHL’s digital backbone, we can integrate emissions data across multi-tier networks allowing us to provide accurate Scope 3 data to customers and empower better decisions across the supply chain.

Sandeep Chatterjee: The key lies in building a trusted ecosystem where suppliers see data sharing not as a risk but as a shared opportunity. Leading companies are shifting from compliance-driven data requests to collaborative partnerships, where data transparency is coupled with technical support, training, and sometimes even co-investment in greener technologies. By assuring suppliers that the data won’t be used punitively but to unlock efficiencies and drive joint improvements, organizations foster greater willingness to disclose granular data. Industry platforms and blockchain-enabled traceability solutions are also helping to aggregate and validate data securely across complex, multi-tier networks.

AI and Automation Make Scope 3 Actionable

New digital tools are enabling real-time emissions modelling and scenario simulation—transforming Scope 3 reporting from a data burden into an operational advantage.

Swaroop Banerjee: At JSW Steel, we acknowledge the critical role of technology in enhancing the accuracy, timeliness, and strategic value of Scope 3 emissions reporting. We are actively exploring the integration of artificial intelligence (AI) and automation into our data management and analytics frameworks. AI and digital automation can significantly improve the feasibility of large-scale Scope 3 data processing by enabling the collection, harmonisation, and validation of supplier-level data across multiple categories and geographies. Machine learning algorithms are being evaluated to identify emissions hotspots, estimate missing data, and improve emission factor accuracy over time.

Additionally, companies are exploring tools that enable real-time modelling of emissions under various procurement or logistics scenarios. This allows decision-makers to simulate the carbon and cost implications of supplier switches, material substitutions, or changes in transportation modes thereby moving from retrospective reporting to proactive emissions management. These digital capabilities are supporting the shift from periodic compliance-driven reporting to a more dynamic, decision-supportive approach. As companies scale their efforts, the goal is to build a digitally enabled, transparent, and responsive Scope 3 reporting ecosystem that aligns with our broader decarbonisation roadmap and supports informed, climate-conscious business decisions.

Bipin Odhekar: At Marico—where Scope 3 emissions represent over 95% of our total footprint—digitalization is fundamental to ensuring accurate, scalable, and decision-ready emissions reporting. While we anchor our approach in the GHG Protocol and IPCC methodologies, the real enabler is automation and digital tools.

We leverage digital technologies for real-time tracking of material consumption, our largest Scope 3 driver, through dynamic dashboards integrated with procurement and production systems. This enables instant visibility, proactive interventions, and smarter material choices.

While reporting frameworks define what we disclose, it is this digital backbone that defines how we report—transforming Scope 3 reporting from a static compliance task into a robust, automated, and business-integrated process that drives operational insights and climate action at scale.

Vishal Bhavsar: AI and automation are revolutionizing Scope 3 reporting by turning a traditionally complex and fragmented process into a dynamic, data-driven capability. What was once a compliance burden is now becoming a strategic asset—enabling companies to align environmental goals with operational priorities.

Leading organizations are leveraging AI-powered analytics to:

• Automate emissions tracking: AI can process vast volumes of data across supply chains in real time, mapping emissions from upstream sourcing to downstream logistics and product use.
• Improve data accuracy: Machine learning algorithms fill gaps in third-party data, reducing reliance on estimates and enhancing confidence in reported figures.
• Optimize supply chain decisions: AI models simulate multiple sourcing and routing scenarios, helping companies select lower-emission suppliers and improve transport efficiency.
• Engage suppliers at scale: AI tools enable collaboration with thousands of suppliers simultaneously, driving emissions reductions across the value chain.

Cloud-based platforms further enhance this transformation by integrating data from internal systems and supplier databases, creating a unified view of sustainability performance. This seamless connectivity improves transparency, accelerates decision-making, and supports real-time emissions modelling—allowing companies to respond proactively to risks, regulations, and stakeholder expectations.

Smitha Shetty: Artificial intelligence is steadily transforming the way organisations approach emissions management and supply chain decision-making. Where traditional reporting methods were often manual and retrospective, AI introduces the ability to generate timely, forward-looking insights.

With real-time emissions modelling, businesses can now explore the potential impact of sourcing decisions before changes are made. For instance, when comparing two suppliers, AI can consider emissions intensity, logistics routes, and upstream data to help recommend a balanced path; optimising for both environmental performance and cost. This level of insight supports more thoughtful and informed decision-making.

AI is also helping to ease the reporting process by automating data extraction from supplier disclosures, certificates, and transactional documents such as invoices. This reduces the time and effort spent on data consolidation, allowing procurement teams to focus more on strategic priorities and supplier engagement. As the demand for greater transparency and accountability grows, AI is playing an increasingly important role in supporting businesses to take timely, data-informed steps toward more sustainable and resilient value chains.

Veeshwass Kulkarni: AI and automation have fundamentally redefined Scope 3 reporting, shifting it from a retrospective compliance task into a dynamic, real-time decision-making tool. Traditionally, Scope 3 data would lag months behind actual operations, limiting its usefulness. Today, AI systems can ingest data from ERP, logistics, and supplier platforms to model emissions in near real time. For instance, by analysing vehicle type, route, and load, AI-powered transport management systems can estimate CO? emissions per shipment—allowing procurement and logistics teams to weigh carbon impact alongside cost and lead time in daily operations.

Beyond tracking, AI and digital twins enable powerful scenario planning. We can now simulate the impact of switching suppliers, changing freight modes, or altering materials, predicting both the cost and emissions consequences before decisions are made. Where suppliers can’t provide full data, machine learning models help fill gaps by estimating emissions based on industry norms, energy sources, and process types. This capability is especially valuable for mapping deeper tiers in the supply chain and building targeted engagement strategies where they matter most.

Dipanjan Banerjee: AI and automation are game changers. At Blue Dart, we use tech-based models to simulate route optimization, fleet utilization, and packaging choices. This allows us to make decisions that balance cost, service, and sustainability. Automation also streamlines data collection, reducing the manual effort and lag that traditionally plagued Scope 3 reporting.

Sandeep Chatterjee: Historically, collecting, cleaning, and reporting ESG data could take over a year—around 54 weeks—because of manual data requests, validation, and analysis. AI and automation dramatically compress this timeline by automating data ingestion from suppliers, filling data gaps with predictive modeling, and applying real-time analytics. Beyond reporting, AI-driven simulation tools now allow companies to test different scenarios—like changing a supplier, transportation mode, or material—and instantly see the emissions and cost impact. This ability to run what-if analyses on the fly transforms decision-making from reactive to proactive, enabling supply chains to respond dynamically to both market and sustainability pressures.