Scope 3 emissions have always been the tricky part of any corporate climate strategy. They sit outside your direct control, stretch across your entire value chain, and can account for the vast majority of a company’s total carbon footprint. Now, with CSRD in effect, getting your scope 3 strategy right isn’t just good practice. It’s a compliance requirement — though the landscape of who exactly is required to comply has changed significantly following the Omnibus I reform.
The challenge is that CSRD doesn’t just ask you to report numbers. It asks you to demonstrate strategic intent, material relevance, and a credible path forward. For many organizations, that’s a significant step up from where their sustainability reporting currently stands. Here’s how to bridge that gap.
What CSRD actually demands from scope 3 reporting
CSRD reporting is governed by the European Sustainability Reporting Standards, commonly known as ESRS. For climate-related disclosures, ESRS E1 sets out what companies need to cover, and scope 3 emissions feature prominently. Under ESRS E1, companies are required to disclose their scope 3 emissions across all relevant categories, explain how they’ve assessed materiality, and describe the targets connected to those emissions. It is worth noting that, following the Omnibus I reform, the requirement to adopt and implement a climate transition plan has been fully removed from the CSRD.
One concept that sits at the heart of CSRD is double materiality. This means you need to assess both how climate-related issues affect your business financially, and how your business activities impact the environment and society. For scope 3, this plays out across your supply chain and downstream activities. If your purchased goods and services carry significant embedded emissions, that’s not just a reporting footnote. It’s a material issue you’re expected to address strategically. The ESRS standards are designed to make that connection explicit, which is why aligning your scope 3 strategy with CSRD requirements means going well beyond a basic emissions inventory.
Who is in scope under the revised CSRD thresholds
Before investing heavily in scope 3 reporting infrastructure, it is essential to confirm whether your organization actually falls within the revised CSRD scope. Under Directive (EU) 2026/470, known as Omnibus I, the thresholds have changed substantially. The CSRD now applies only to companies with more than 1,000 employees and more than €450 million in net turnover. The previous thresholds of 250 employees, €50 million in turnover, and €25 million in balance sheet total have been dropped entirely. As a result, roughly 80 percent of companies previously in scope now fall outside the requirement.
The directive was published on 26 February 2026 and entered into force on 18 March 2026. The new scope applies to financial years starting on or after 1 January 2027, with the first reports due in 2028. Member States must transpose the rules into national law by 19 March 2027 at the latest. Additionally, companies that were already reporting under wave 1 but now fall below the new threshold may be exempted by Member States for financial years 2025 and 2026.
Mapping your value chain to scope 3 categories
Before you can report on scope 3 emissions meaningfully, you need a clear picture of where they actually come from. The GHG Protocol defines fifteen scope 3 categories, split between upstream activities (like purchased goods, business travel, and employee commuting) and downstream activities (like the use of sold products or end-of-life treatment). Not all of them will be relevant to every business, but identifying which ones are is the first real task.
A value chain mapping exercise involves working through your business model and tracing where emissions occur at each stage. For a manufacturing company, purchased goods and services are almost always the dominant category. For a financial institution, financed emissions through investments take center stage. For a retailer, it might be a combination of upstream production and downstream product use. The point is that your scope 3 profile is specific to your business, and a generic approach won’t hold up under CSRD scrutiny.
This mapping process also feeds directly into your double materiality assessment. When you can see which value chain segments carry the highest emissions exposure, you can make a more informed judgment about which scope 3 categories are truly material, and document that reasoning clearly in your CSRD report.
Closing the data gap between strategy and compliance
Here’s where things get genuinely difficult. Scope 3 data quality is one of the most persistent challenges in sustainability reporting, and CSRD doesn’t lower the bar. The standard expects companies to use the best available data, explain their methodology, and improve data quality over time. That’s a reasonable ask in principle, but in practice it means engaging suppliers, reviewing procurement data, and often building data collection processes from scratch.
There are a few practical approaches that help close this gap:
- Supplier engagement programs: Reaching out to key suppliers to collect primary emissions data rather than relying entirely on spend-based estimates. This takes time and relationship-building, but it significantly improves accuracy for your most material categories.
- Spend-based estimates as a starting point: For categories where primary data isn’t yet available, spend-based emissions factors provide a defensible baseline. The key is being transparent about the methodology and showing a plan to improve it.
- Activity-based data where possible: For categories like business travel or logistics, switching from spend-based to activity-based calculations (using actual distance or fuel consumption data) tends to produce more accurate results and holds up better under audit.
- Internal data governance: Scope 3 data touches procurement, finance, logistics, HR, and product teams. Without a clear process for who owns what data and how it flows into your reporting, gaps and inconsistencies are almost inevitable.
Closing the data gap isn’t a one-time project. It’s an ongoing process of improving methodology, expanding supplier coverage, and tightening internal systems. What matters most for CSRD compliance is that you can show a credible, documented approach and a trajectory of improvement, not perfection from day one. That mindset shift, from “get it perfect” to “get it documented and improving,” makes the whole process far more manageable.
Embedding scope 3 targets into your broader sustainability strategy
Reporting scope 3 emissions and actually building a strategy around them are two different things. CSRD expects the latter. Under ESRS E1, companies need to disclose targets related to their scope 3 emissions and explain how those targets connect to their overall climate approach. If your scope 3 targets exist in a spreadsheet somewhere but don’t connect to procurement decisions, product design, or supplier contracts, that disconnect will show up in your report.
Practically, embedding scope 3 into your strategy means a few things. It means your procurement team understands the emissions profile of key suppliers and factors that into sourcing decisions. It means your product development process considers downstream use-phase emissions, not just manufacturing. It means your scope 3 targets have owners, timelines, and budgets attached to them, rather than sitting as aspirational statements in a sustainability report.
For companies pursuing science-based targets through SBTi, scope 3 is often the most demanding part of the target-setting process, since SBTi requires scope 3 targets when those emissions represent a significant portion of the total footprint. Aligning your SBTi commitments with your CSRD disclosures creates a coherent narrative, showing regulators, investors, and stakeholders that your targets and your reporting tell the same story.
What the revised ESRS means for scope 3 reporting in practice
On 3 July 2026, the European Commission adopted revised ESRS. If the revisions are confirmed following scrutiny by the Parliament and the Council, the number of mandatory data points would decrease by more than 60 percent, and the total number of data points by more than 70 percent. A voluntary standard for smaller companies would also be introduced. These changes are not yet final, but if adopted, they would represent a meaningful reduction in the reporting burden for companies that remain in scope. Organizations should monitor the progress of the revised ESRS closely and plan their scope 3 reporting frameworks accordingly, avoiding over-engineering systems around requirements that may yet change.
When to bring in external scope 3 expertise
Scope 3 strategy and CSRD compliance sit at the intersection of technical emissions accounting, regulatory interpretation, and stakeholder communication. That’s a lot to navigate internally, especially when your sustainability team is already stretched across multiple priorities.
The type of external support you need depends on where the gap is. If your challenge is emissions accounting methodology and category prioritization, a scope 3 emissions specialist is the right fit. If the gap is in understanding how ESRS E1 applies to your specific business context and how to structure your disclosures, a CSRD reporting expert brings a different but equally important set of skills. These are genuinely distinct specializations, and matching the right expertise to the right problem matters.
There’s also a timing consideration. Scope 3 work often surfaces urgent needs, whether it’s a reporting deadline, a board presentation, or a supplier engagement initiative that needs to move quickly. Traditional consultancy routes can involve lengthy procurement processes and multiple layers of sign-off before work even begins. For organizations that need to move faster, working with specialized freelance experts offers a more direct path to getting the right person on the problem quickly.
Ready to move your scope 3 strategy forward?
Aligning scope 3 emissions with CSRD requirements is genuinely complex work, and there’s no shortcut through the hard parts. But with the right expertise alongside you, the process becomes a lot more manageable and a lot less guesswork.
At Dazzle, we match organizations with pre-screened sustainability freelancers who specialize in exactly this kind of work, whether that’s scope 3 strategy, CSRD reporting, or value chain emissions analysis. Our network of 300+ experts is available on a project or interim basis, and we can connect you with the right person within 48 hours. No lengthy procurement process, no generalist assigned to a specialist problem. Just the right expertise, ready when you need it.
If you’re working through your scope 3 strategy and want experienced support to help you get there, we’d love to hear from you. Reach out to our team and tell us what you’re working on.
If you’re interested in learning more, contact our team of experts today.
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