The global landscape is moving towards more transparent climate disclosures. Businesses are expanding their reporting to cover emissions from direct operations and their entire value chain, including suppliers. For reporting purposes, emissions are classified into three types: Scope 1, Scope 2, and Scope 3. Reporting Scope 1 and Scope 2 emissions (direct emissions and indirect emissions from purchased electricity) is straightforward, but Scope 3—indirect emissions from the entire value chain—is more complex. Scope 3's reporting challenge stems from data scarcity, poor data quality, and numerous calculation assumptions. However, reporting on these emissions are essential as they constitute over 70% of a company's total emissions. Therefore, despite its novelty and complexity, navigating this landscape has become crucial to address climate change.
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