Why Scope 3 Reporting Needs Credible Offsets

1. ZENITH ENERGY Why Scope 3 Reporting Needs Credible Offsets

2. Your First Step Toward Sustainability By 2025, accurate and transparent reporting of Scope 3 emissions had become an integral part of corporate climate action strategy. With an increasing regulatory choice over the mandatory disclosure and push from the stakeholders towards the notion of accountability, companies are being pressured to consider the indirect valuation chain emissions, usually the largest part of their overall carbon footprint. This focus on carbon emissions scope 3 is crucial as businesses aim to meet global greenhouse gas emissions reduction targets and integrate high-quality carbon offsets for scope 3 into their climate action plans. 2

3. Scope 3 emissions for most companies account for 70%-90% of their total greenhouse gas emissions. Such emissions are not easily tracked and reduced, as they spread through many suppliers, customers, and third parties draped across various countries and industries. This makes addressing carbon emissions scope 3 especially challenging. Key difficulties include: Data gaps: Suppliers may not provide accurate or timely emissions data. Limited influence: Companies can’t always dictate operational changes across their value chains. Measurement uncertainty: Estimations often rely on industry averages instead of actual figures. As disclosure regulations evolve, such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and the U.S. SEC climate rules, businesses will now be required to disclose comprehensive, auditable Scope 3 data. Offsets could help bridge the current operational reality with long-term Net Zero goals, but only if they are real. 3

4. What Makes an Offset Credible Incorporating offsets into any analysis of Scope 3 strategies entails finding viable credits that will meet stringent quality criteria: Additionality: The project wouldn’t have occurred in the absence of offset funding. Permanence: Reductions or removals are valid for decades and have been safeguarded against reversal. Verification: The project has been validated by independent third parties for its outcomes. Transparency: Public registries and clear documentation are available. Alignment: Such credits meet the company’s reduction goals, e.g., removal credits for Net Zero targets. Standards such as Gold Standard, Verra (VCS), and Climate Action Reserve are reputable frameworks for assessing and verifying these criteria. 4

5. Contact Zenith Energy for Your Energy Solutions Email info@zenithenergy.com website https://zenithenergy.com/ Phone +91 70757 56795