Scope 3 reporting: Businesses visa to foreign markets

South African businesses are no strangers to managing through uncertainty. But as international trade becomes increasingly carbon-conscious, a new type of exposure is emerging for local exporters, one that can directly affect market access.

Under the European Union’s Corporate Sustainability Reporting Directive (CSRD) and the Carbon Border Adjustment Mechanism (CBAM), companies must now disclose their full value-chain emissions. Those exporters able to trace and verify their Scope 3 data – the greenhouse gas emissions linked to suppliers, logistics and downstream use – will hold a decisive advantage in tomorrow’s trading environment.

Not all data is created equal

Scope 3 emissions typically account for around 70% of a company’s total carbon footprint, yet they’re the most complex to measure.

Many South African supply chains are built on hundreds of smaller or informal suppliers who lack the systems or resources to measure their own footprints accurately. Even where data is available, it arrives in different formats, using outdated emission factors or broad assumptions. The result is a patchwork of information that cannot withstand the scrutiny of regulators or investors.

Compounding the challenge is the manual nature of data gathering. Spreadsheets and email submissions still dominate, introducing errors and time lags that make year-on-year tracking almost impossible. Few companies have a single, verifiable source of truth, and that credibility gap is quickly becoming a trade risk.

Transparency as a trade strategy

The leaders in this space have realised that the goal isn’t just better reporting but also better visibility. Rather than treating Scope 3 as a compliance burden, forward-thinking exporters are using it to understand their businesses more deeply: where emissions are concentrated, where inefficiencies lie and where collaboration can deliver shared savings.

This shift is as much cultural as it is technical. It starts with engaging suppliers early, setting clear expectations, and building mutual trust around data. When companies and their value-chain partners share information openly and invest in credible systems of record, the result is not only cleaner data but stronger relationships.

Encouragingly, South African innovators are stepping up to close the credibility gap. Locally developed platforms can integrate real operational data from across the value chain into verifiable ESG reporting. By combining live metering, supplier data and automated assurance checks, exporters can move beyond estimates and report figures that stand up to scrutiny.

For executives, the real value lies in what credible data can unlock. Transparency enables leaders to negotiate more confidently, manage costs and strengthen their position with customers who are now – or soon will be – benchmarking carbon performance. Measurement becomes a source of insight and a way to run leaner, more resilient operations, rather than yet another compliance box to tick.

Align with where the world is heading

Even companies not directly impacted by European legislation will feel the pull of global alignment. Multinationals are already demanding verifiable Scope 3 data from their suppliers, and investors are rewarding those who can demonstrate real-world performance.

South African firms that align early with international frameworks, such as the IFRS S1 and S2 standards developed by the International Sustainability Standards Board, will be better positioned to meet future expectations and attract responsible capital.

Scope 3 reporting may feel daunting, but it’s where the next wave of competitiveness will be defined. Companies that can count what counts – accurately, consistently and collaboratively – will find themselves ahead of the curve as global regulations tighten. Because in tomorrow’s markets, your value chain will be audited before your product is sold.

Manie de Waal, CEO of Energy Partners

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

 BUSINESS REPORT