UK Call for Evidence on Scope 3 emissions reporting

United Kingdom

The Department for Energy Security and Net Zero (DESNZ) is inviting comment until 14 December 2023 on the costs, benefits, and practicalities of Scope 3 greenhouse gas (GHG) emissions reporting in the UK, and feedback on the existing Streamlined Energy and Carbon Reporting (SECR) framework. 

The Call for Evidence acknowledges that Scope 3 GHG emissions can account for anywhere between 80-95% of the total value chain of an organisation’s footprint and contribute to reaching the UK’s Net Zero target by 2050. It recognises that Scope 3 disclosures are becoming increasingly important for investors and stakeholders which are considering the transition readiness of organisations to adapt to a low-carbon economy. Most Scope 3 disclosures are currently voluntary under the SECR framework. Whilst some organisations disclose their Scope 3 emissions through voluntary private sector frameworks such as the Science Based Targets initiative (SBTi) and the CDP (first established as the Carbon Disclosure Project), there is a potential information gap for investors to fully assess the climate-related risks and opportunities of their investments. The Call also hopes to consider how UK endorsed international standards may support developments such as a potential UK Carbon Border Adjustment Mechanism and low carbon product standards. It also informs a review as to whether SECR is achieving its aims and any future changes that could help reduce compliance costs or increase the benefits of the regulation.


The internationally recognised GHG Protocol Corporate Accounting and Reporting Standard classifies emissions into three scopes:

  • Scope 1: the direct emissions from owned or controlled sources
  • Scope 2: the indirect emissions from the generation of purchased energy
  • Scope 3: all indirect emissions, not included in Scope 2, that occur in the value chain of the reporting company.

The standards for sustainability-related information published by the International Sustainability Standards Board (ISSB) (IFRS S1 and IFRS S2) include requirements for entities to report their gross GHG emissions (Scopes 1-3) generated during the reporting period subject to a materiality test.

The Call for Evidence is seeking views on the costs, benefits, and practicalities of Scope 3 GHG emissions reporting to inform its decision on whether to endorse IFRS S2 (the climate related standard) and potentially introduce reporting requirements based on UK-endorsed ISSB standards for UK-registered businesses. The UK government is also in support of increased interoperability between the ISSB and other standards.

Scope 3 emissions

As above, Scope 3 includes all indirect emissions that occur in an organisation’s value chain, other than those included in Scope 2. The GHG Protocol Standard outlines 15 distinct reporting categories in Scope 3:

 Upstream activities

1.   Purchased goods and services;
2.   Capital goods include extraction, production and transportation of capital goods purchased or acquired;
3.   Fuel and energy related activities (not included in Scope 1 or Scope 2);
4.   Transportation and distribution;
5.   Waste generated in operations;
6.   Business travel;
7.   Employee commuting;
8.   Leased assets;

 Downstream activities

9.   Transportation and distribution;
10. Processing of sold products;
11. Use of sold products;
12. End-of-life treatment of sold products;
13. Leased assets;
14. Franchises; and
15. Investments.

The present position

Quoted companies have been required under UK rules to report their annual emissions and an intensity ratio in their Director’s Report since 2013. The SECR framework introduced in 2019 introduced additional disclosure requirements for quoted companies, and new requirements for large unquoted companies and large Limited Liability Partnerships. Still most Scope 3 emissions are reported on a voluntary basis. 

The Call for Evidence reaffirms that the UK government strongly supports the development of international standards for the disclosure of sustainability-related information and agrees that the provision of globally comparable sustainability-related information is vital for the effective functioning of capital markets. The endorsement process aims to result in the production of a UK-endorsed version of IFRS S2 that businesses will be able to use on a voluntary basis. The government will consider the appropriateness of future reporting requirements against UK-endorsed ISSB standards for UK registered businesses once the endorsement process is complete. This will include requirements to report any Scope 3 disclosures included within the UK-endorsed version of IFRS S2. The UK Financial Conduct Authority will also consult on amending rules for listed companies to refer to UK-endorsed standards in early 2024, with a view to bringing in new obligations for listed companies for accounting periods from 1 January 2025.

In July, the European Commission, EFRAG and the ISSB confirmed a high degree of climate disclosure alignment in relation to the European Sustainability Reporting Standards (ESRS), to which reporting is required under the Corporate Sustainability Reporting Directive, and the IFRS.

The Call for Evidence Questions

  Key questions include:

  • What role does Scope 3 emissions reporting currently play in organisations?
  • Views on the approach to Scope 3 reporting within IFRS S2 including any data that stakeholders feel is missing and consequences and concerns, considering the ISSB’s approach to materiality.
  • Would using the ISSB’s approach to Scope 3 reporting have knock-on consequences for your organisation that the government should be aware of considering the interaction between IFRS S2 and any EU regulations, or other energy/emissions reporting requirements that your organisation may be impacted by?
  • What is your view on the use of the GHG Protocol for the purposes of Scope 3 reporting within IFRS S2?
  • How would investors’ decisions be informed by Scope 3 information, and would this depend on the sector and size of the organisation?
  • What further guidance and support might be needed for your organisation, and organisations in your value chain, to report Scope 3 information in accordance with IFRS S2?
  • Any likely consequences of Scope 3 reporting on organisations that the government should be aware of including interoperability, data availability and costs and benefits, especially on smaller businesses in supply chains.

 Responses may be made online at: or by email to: [email protected]


The government aims to publish their response to the Call for Evidence within 12 weeks of the closing date. Responses will be shared across government and with the independent UK Technical Advisory Committee (TAC) that is supporting the government’s assessment of IFRS S1 and S2. Once the government has received the TAC’s advice, it will publish a draft version of the UK endorsed standards for consultation, before finalising the standards.

Following the endorsement process for the ISSB standards, the government will consider whether reporting requirements might be introduced that would oblige businesses to report against UK-endorsed IFRS S1 and S2, including the timeframes for implementing these requirements. If pursued, the government shall consult on any future obligations, including the scope of entities caught by those requirements and consider UK-endorsed S1 and S2 within the wider context of the UK’s non-financial reporting review, which is taking a holistic look at the UK’s corporate reporting regime as a whole.


Co-Authored by Jasmine Kaler