Scope 3 greenhouse gas (GHG) emissions often make up the majority of an organisation’s total emissions, sometimes accounting for 80–95%.

Research carried out by the University of Sydney and Macquarie University examine scope 3 GHG emissions disclosures made by 189 listed entities in Australia and New Zealand between 2020-2023 has found an upward trend in overall informativeness  from 24.6% in 2020 to 38.2% in 2023.

Challenges in Measurement and Disclosure

Measuring Scope 3 emissions is complex. Reporting entities face challenges such as limited resources, inconsistent methodologies and reliance on estimates. 

Disclosure Dimensions: Comparability and Completeness

High-quality disclosures allow for year-on-year and industry comparisons. Reporting entities should detail the categories, methods, assumptions, emission factors, targets and any recalculations. This level of transparency supports informed decision-making and builds trust with stakeholders.

Current Practices in Australia and New Zealand

Most organisations use graphs and tables to present prior period data, but few offer detailed explanations or industry comparisons. Only a minority disclose full information on all relevant categories and methodologies.

Reporting Frameworks

The Greenhouse Gas (GHG) Protocol is the most widely used framework, followed by ISO 14064-1:2018. Research has found that entities using the GHG Protocol tend to provide clearer and more comparable disclosures.

Assurance of Disclosures

About 39% of entities reporting Scope 3 emissions have obtained third-party assurance, usually from accounting firms. Common assurance standards include ISAE/ASAE 3000, 3410 and ISO 14064. 

Tips for Better Scope 3 GHG Emissions Disclosures

• Start early to build reporting maturity
• Use recognised frameworks like the GHG Protocol
• Assess materiality and invest in robust systems if Scope 3 is significant
• Present data clearly, using tables and charts for comparisons
• Provide context for changes and set category-specific targets
• Obtain independent assurance to enhance credibility
• Engage suppliers to improve data quality and completeness