By Dexter Galvin, Climate Ambassador at EcoVadis

At COP30 in Belém, Brazil, the conversation around climate action entered a more demanding phase. This year’s summit was not just about setting new targets, but proving that existing commitments are credible and that the systems to deliver them are in place. With adaptation and resilience at the forefront, governments and businesses alike were pressed to turn ambition into action.

Yet one of the biggest determinants of progress remains largely overlooked: corporate supply-chain emissions. Research shows that ignoring Scope 3 emissions could expose companies to more than $500 billion in annual liabilities by 2030.

On average, these emissions are 21 times larger than those from direct operations and energy use combined. Yet only one in four companies reports on them (24%), and fewer than one in ten has set formal reduction targets (8%).

When climate risk becomes business risk

Record-breaking floods across Europe and heat-driven supply chain disruptions in Asia are already reshaping global markets exposing systemic vulnerabilities. At the same time, new regulations from the EU’s Corporate Sustainability Reporting Directive (CSRD) and Carbon Border Adjustment Mechanism (CBAM) to the U.S. SEC’s upcoming climate disclosure requirements, is redefining what corporate transparency looks like.

As carbon pricing and reporting mandates proliferate, companies without clear visibility into their supply chain emissions can face higher operating costs, constrained access to financing, and exposure to market and regulatory shocks. By contrast, organizations that engage suppliers early can capture three to six times the return on their decarbonization investments.

From data gaps to decisive action

Complexity is often cited as the main barrier to tackling Scope 3 emissions. Supply chains stretch across thousands of suppliers, each with different data capabilities, but advances in digital reporting tools, standardized methodologies, and shared data platforms are steadily making this work more accessible.

For example, digital reporting tools allow suppliers to submit environmental data quickly and in standardized formats, reducing manual effort and inconsistencies. Standardized methodologies provide clear rules for calculating and comparing emissions across complex supply chains. Shared data platforms and collaborative networks further simplify the process by aggregating supplier information, enabling benchmarking, and highlighting gaps without requiring every company to build its own reporting infrastructure.

With these tools and frameworks in place, companies can move beyond data collection and begin mapping their emissions to  uncover more than just carbon hotspots. Inefficient processes, concentrated risks, and gaps in supplier practices become visible and with them, opportunities to cut costs, drive innovation, and strengthen collaboration across procurement, finance and sustainability teams.

Five levers that move the needle

Leading companies are using these five steps to move from intention to impact, making measurable progress on sustainability and climate action goals.

1. Bring suppliers into the fold. The companies making the fastest gains are those treating suppliers as partners, not compliance obligations, and investing in shared targets and joint reduction projects. By using standardized reporting tools, they can gain a clear view of supplier performance, uncover opportunities for collaboration, and drive emissions reductions and efficiency improvements across the supply chain.
2. Measure what matters. To tackle scope 3 emissions, companies can start by building  structured GHG inventories, mapping emissions across their supply chains, and  identifying the categories with the greatest impact. These systems, once put in place, can help track progress over time, enabling informed decisions, targeted action, and measurable ROI while uncovering efficiency gains and innovation opportunities across the business.
3. Make it a leadership issue. Executives who take ownership of emissions performance integrate climate action into core business strategy rather than treating it as a standalone initiative. By setting clear priorities, allocating resources, and embedding accountability across functions, leaders ensure that sustainability informs decision-making at every level. Regular visibility from the top motivates teams in procurement, operations, and finance to collaborate on emissions reduction, track progress, and recognize successes.
4. Plan for the transition. Companies with credible, companywide transition plans turn ambition into operational reality. By assessing regulatory risks, mapping emissions reduction pathways, and setting clear milestones, companies can align strategy, investment, and operations with a low-carbon future. Embedding these plans across the organization helps companies to navigate rising carbon prices, evolving regulations like CSRD and CBAM, and emerging disclosure requirements.
5. Fund it properly. Companies who allocate budgets to supplier engagement and enhanced data systems enable teams to execute initiatives consistently and at scale. By funding the tools, processes, and partnerships needed for emissions reduction, companies accelerate progress, strengthen operational resilience, and turn climate ambitions into measurable business outcomes.

COP30 will serve as a stress test for the credibility of global climate commitments, a test that extends to the private sector. The $500 billion in potential liabilities associated with unmanaged Scope 3 emissions is a warning that inaction has become the more expensive option.

Companies that act now, building transparency and collaboration into their supply chains, will not only protect profitability but contribute directly to the resilience objectives that COP30 seeks to operationalize.

 

About the Author

Dexter Galvin is a leading expert in corporate climate action and supply chain sustainability. Before joining EcoVadis as Climate Ambassador, he spent over 15 years at CDP building the world’s leading environmental disclosure system and supporting companies in reducing their climate impact.