When the US Securities and Exchange Commission (SEC) unveiled its climate-related disclosure rules back in March, one of the biggest talking points was the Commission’s decision to omit all Scope 3 emissions reporting requirements.
This U-turn, which followed months of pressure to pare down the rules, demonstrates the uncertain landscape businesses face as they attempt to develop and execute their sustainability strategies.
Yet for many of the Americas-based members of Procurement Leaders’ Risk and Sustainability Cohort the news represented a slight bump – but not a fork – in the road. And it certainly does not mark a dead end in their Scope 3 journeys.
Regardless of decisions made by the US regulator, our members gave two broad reasons for staying the course. First, they must still comply with ESG laws in other parts of the world. The regulatory landscape is diverse, complex and ever-shifting: the proof, should you need it, can be found in our latest report, Plotting the path to net-zero: Developing Scope 3 data capabilities (available now to members and nonmembers). It goes without saying but multinational businesses have to be aware of – and follow – the rules in all the countries that they do business in.
Second, organisations remain committed to measuring and cutting supply chain emissions because it’s the right thing to do, and it remains a vital means of creating value. As a procurement director at one technology company explained: “We consider the views of customers, employees and investors equally. There hasn’t really been any change of expectation in any of those segments that would cause us to do anything differently.”
This isn’t to say the SEC’s decision didn’t come as a disappointment to procurement sustainability teams, many of whom were hoping to use it to bolster their business cases for additional investment, or as a lever in discussions with hesitant suppliers. But as one member said, it is a matter of when – not if – those investments will be made.
While regulators may continue to delay or water-down decisions, creating uncertainty, complexity and a ton of paperwork for nervous lawyers, adopting a “rational sustainability” approach (as London Business School’s Alex Edmans endorsed at Ovation) will allow procurement to deliver long-term value and enable CPOs to lead in this area with confidence.
I&D Impact Awards: entries now open
Entries are now open for the I&D Impact Awards 2025, which recognise exceptional achievements in Diversity, Equity and Inclusion. With many procurement teams working to develop outstanding supplier diversity schemes that help create a more inclusive and equitable world, the awards are an important opportunity to celebrate the power businesses have to make a difference.
Visit the website to discover more and enter.
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