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In this step, you will estimate the emissions associated with each activity in your value chain. Where possible use public data, pulling from data that has been disclosed to entities like CDP or Ecovadis. Ideally, a company should be using primary data collection directly from supply chain partners with the largest spend and highest emissions. However, in the early stages, this data is often unavailable and most companies begin by making estimates using proxy data based on published emission factors. The GHG Protocol provides different methods to measure and calculate your emissions based on data availability: Technical Guidance for Calculating Scope 3 Emissions. Scope 3 Estimations Reporting Transparency Different activities will have different calculation methodologies (emission factors, assumptions made, etc.). You will need to carefully document all these assumptions for subsequent years and when amendments and improvements in data quality are made. Reporting on the degree of uncertainty of estimates and other indicators of reliability is also important to provide full transparency to stakeholders. Supplier and Customer Engagement Gathering data: If firms want to move beyond estimated emissions and industry average data to the use of robust primary data, they will have to rely on their suppliers to be able to collect data. Collecting this data directly from suppliers through surveys or collaborative platforms to assess emissions associated with purchased goods and services can be challenging, but it is not impossible. Increasingly, companies are asking their suppliers to disclose their emissions using the CDP Supply Chain questionnaire. Requiring suppliers to provide data during the supplier qualification process is another way to encourage emissions data sharing in advance. In addition, suppliers may have several customers asking for the same information in a variety of formats. If your supplier has measured their emissions using a reputable methodology aim to be flexible in accepting this. Supporting value chain decarbonization: Companies can also help to support value chain decarbonization by setting supplier and customer engagement targets. For instance, your company could commit to supporting a specific percentage of suppliers (as a percentage of spend or GHG emissions) to set their science-based targets within five years from the date the company's target is submitted to the SBTi for validation. This could be through providing training, support, tools, and other resources to help them measure their emissions, report, and set reduction targets. Firms can also adjust their procurement processes to value products and services that have a lower footprint and/or companies that have set credible climate targets. Common ways to do so are by including decarbonization and data sharing expectations in your supplier code of conduct and in your contractual agreements. Sustainability & Energy Management Simplified

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