Unlock Transparency

How you can help your company navigate complex requirements and approach Scope 3 emissions in a digestible manner.

In this section, sustainability and climate leaders in your company will:

Gain clear guidance on key reporting and disclosure regulations, relevant frameworks, and sector-specific methodologies, with examples from the steel and aluminum industries.
Be able to utilize a decision tree to streamline and simplify reporting efforts, selecting the most appropriate methods aligned with their goals and available resources.
Enhance internal collaboration with procurement and responsible sourcing teams by facilitating effective communication on understanding uncertainties in GHG data and investigating key considerations for evaluating low-carbon product claims.

3.1 Demystifying methodologies for GHG reporting

As disclosure requirements increasingly demand greater transparency and granularity, companies can easily be overwhelmed by the complex array of GHG standards and methodologies that are often designed for different purposes. Using the steel and aluminum sectors as examples, this section helps simplify the selection process, guiding companies to quickly identify the most suitable approaches for their needs.

Generic frameworks

The GHG Protocol provides a strong foundation for emissions tracking. However, once companies collect more granular, supplier-specific product data, complexities arise quickly from varied methodologies shaped by industry norms, geography, preferences, or business priorities. This variation can make it difficult to track and compare emissions in a consistent and meaningful way.

Regulations like CBAM introduce unique guidelines under the EU Emissions Trading System (ETS) structure, often resulting in values that differ significantly from other methodologies and adding further confusion. At the product carbon footprint (PCF) space, PACT Methodology, along with the growing PACT Network for PCF exchange, plays a key role in helping companies navigate this landscape. By promoting accurate, granular, and comparable product-level data, PACT supports more harmonized disclosures across complex value chains with a sector-agnostic approach. While PACT offers a strong base for harmonized disclosures, companies may still need to refer to sector-specific guidance to ensure alignment with industry requirements. The variety of existing methodologies and metrics in some of the sectors can still create confusion.

Sectoral methodologies

Guided by general frameworks, once companies start collecting supplier-specific PCF, complexities arise quickly from varied industry-specific methodologies. They discover suppliers may use different methods based on geography, preferences, or business priorities, making it challenging to track and compare emissions consistently.

Sector-specific methodologies often differ in the boundary for GHG emissions calculation — an area that must be aligned to enable meaningful comparison. A system boundary defines what is included and excluded when measuring GHG emissions for a company, product, or activity. As shown in Exhibit 3, the International Aluminium Institute Guidance focuses on emissions from primary aluminum production, while the European Aluminium Association and RMI guidelines are tailored toward semi-fabricated and finished products. CBAM, on the other hand, requires emissions intensity calculations from smelting and downstream processes, excluding emissions from pre-smelting stages. Similarly, in the steel sector, methodologies like Worldsteel and ISO 14404 series calculate GHG emissions for crude steel but are not designed for cross-supplier comparisons. Guidelines such as the RMI benchmarking boundary or the SBTi steel boundary are designed to enable consistent and comparable reporting and help your company assess the alignment of purchased steel products with a 1.5°C climate trajectory.

Exhibit 3. Comparison of reporting boundary for common methodologies in aluminum and steel sector

Decision tree for easier selection

Even with the mapping presented above, companies may still struggle to decode the intricacies of these methodologies and determine which best suits their needs. To address this, we developed a decision tree (Exhibit 4) to guide your company in identifying a suitable starting point. Recognizing that corporate objectives vary, the decision tree offers a streamlined approach to pinpointing priorities, whether it’s initiating emissions calculation for Scope 3, benchmarking performance, or addressing specific goals along the spectrum. This tool enables buyers to easily navigate complexities with confidence and precision.

By using the decision tree, companies buying steel and aluminum can quickly narrow down the selection based on their specific goal, an approach that is also replicable across other sectors. For example, for those just starting out on Scope 3, referencing the GHG Protocol Scope 3 Standard and using a spend-based approach provides a straightforward entry point. For companies seeking more supplier-specific data, the PACT Methodology for Product Carbon Footprints offers a structured sector-agnostic approach to generating comparable product level data. It also creates alignment between various guidelines and standards (e.g., TfS methodology, RMI steel and aluminum guidelines). Environmental Product Declarations (EPDs) complements this by providing sector-specific information.

On the other hand, if the goal is to identify reduction opportunities, methodologies designed for differentiating lower-emissions products are ideal. For example, RMI guidance requires reporting of diverse climate metrics that offer more targeted measures toward buyer’s specific reduction goals, such as percentage of scrap-based content and whether it is considered pre- or post-consumer scrap.

Ultimately, this tool is designed to empower buyers to make swift, informed decisions, freeing up more time and resources to focus on impactful emissions reduction actions. Additionally, this decision tree can be used alongside the PACT framework’s hierarchy of standards, helping companies prioritize higher-quality data sources and strengthen overall data integrity.

Exhibit 4. Decision tree to help pinpoint priorities for methodology selection

To improve efficiency in emissions transparency, your company can do the following:

For near-term goal – Set clear goals for reporting or data collection (e.g., disclosure or reduction) and develop a methodology selection decision tree (or use the proposed one) to navigate complex requirements.

For near-zero ambition – Delve into reduction-oriented methodologies to select or design the right climate metrics and procurement requirements that align with near-zero technologies.

3.2 Clarifying uncertainties in GHG data

Besides selecting the right methodology, your company must also deal with the uncertainty that lies in GHG data. These uncertainties arise from inconsistencies in accounting methodologies and variations in the emissions factors used for calculations, impacting the effectiveness of companies assessing climate performance of suppliers or distinguishing reductions across green product claims.

Uncertainties in supplier data

Industry initiatives might have started addressing this issue by providing confidence ranges for emissions to help buyers assess the accuracy and creditability of collected data. For example, the International Aluminium Institute’s Specifiers’ Guide provides an overall confidence range of product emissions for primary aluminum and breakdowns by unit process, emission source, and power source (Exhibit 5). By referencing this guide, companies can identify discrepancies and evaluate whether the correct scope was used (e.g., reported data falling outside the typical range of 4.5–22 t CO₂e/t primary aluminum). Further, they can also quickly tell a supplier’s power source based on reported data to make targeted reduction recommendations through supplier engagement. In the chemical sector, RMI has developed a guide for assessing oil and gas input variability to help companies account for upstream emissions differences in key feedstocks.

Exhibit 5. Common range of GHG emissions for primary aluminum products

Uncertainties in low-carbon product claims

Interpreting lower-carbon product claims is more complex, often due to ambiguous language, insufficient information, or the inclusion of emissions credits (insetting or offsetting) and chain of custody models. These factors raise concerns among companies about their reliability and usefulness.

Examining claims for steel and aluminum products reveals significant inconsistencies across multiple areas (Exhibit 6). A central challenge is the lack of a standardized definition for “low-carbon,” allowing suppliers to set their own emissions thresholds or choose different accounting scopes (e.g., some suppliers define low-carbon aluminum as 4 t CO₂e/t product, either counting emissions from mining to smelting or just smelting). Many low-carbon claims do not disclose how the claimed reductions are achieved, leading to uncertainty on the reduction methods used. Therefore, it is best to ask further questions to suppliers to ensure understanding of the details and methods used to achieve the low-carbon solution and to ensure alignment on the calculation methodology used.

Mass balance is a method used to track the amount of sustainable raw materials mixed with conventional materials in a production process. This allows companies to attribute a portion of the final product as sustainable based on the input ratio, even if the materials in the end product are physically indistinguishable. This method is often involved in green product claims to track and allocate emissions reductions across products, ensuring that the amount of recycled input or reductions match the claims in the output.

Allocation can occur at the site level or across multiple sites. In the latter case, reductions claimed by a green product may be achieved at a different production site than the one supplying the buyer, exposing buyers with potential greenwashing risks. Because of this, it is best to ensure that suppliers are transparent on the approach that is chosen (e.g., type of mass-balance, physical tracking, etc.) to improve clarity and credibility. Additionally, emissions reductions or recycled input may be allocated either by maintaining proportionality or through free allocation without a physical link. These nuances can make it challenging for your company to confidently assess the risks and opportunities of such claims. However, claims with site-specific and proportional allocation generally offer greater credibility.

Exhibit 6. Evaluating green product claims (steel and aluminum) for informed decisions

Key considerations	Recommended Actions
Emissions scope in claims	Ensure comparability of boundaries between claims for apple-to-apple comparisons and easier identification of products with the lowest emissions.
Emissions scope in claims	Steel: No standard definition, and efforts drive the use of a sliding-scale with a range of thresholds for low-carbon emissions steel with different scrap rates.	Aluminum: Low carbon aluminum is commonly defined as ≤ 4t CO2e per ton for primary aluminum with varied emissions scopes.
Product certificates	Recognize that certificates with insetting and offsetting may be short-term solutions, whose usage may be subject to changes over time. Your company should carefully consider their use and ensure the integrity of certificate registries to avoid risks like carbon leakage.
Product certificates	Steel: Strong reliance on mass balancing to allocate incremental improvements or scrap to a "virtual line" of products.	Aluminum: Mass balancing is also in place but less widespread compared to the steel sector.
Scrap-based content	Request detailed information on scrap types to leverage the most effective decarbonization strategies. Although recycling is important in decarbonizing heavy metal industries, the reduction potential for pre-consumer versus post-consumer scrap varies across industries and end-use sectors.
Scrap-based content	Steel: Recycled green steel is often from electric arc furnace (EAF) with 100% renewable energy (through market mechanisms) or bioenergy. This could involve a higher premium if a new EAF facility is involved.	Aluminum: The measurement of scrap emissions might vary across claims. Branded "ultra-low emissions aluminum" (often as 95% post-consumer scrap) is available in smaller batches at a higher premium.*
Additionality**	Assess the additionality in product claims and evaluate whether incremental improvements lead to transitional technologies, as greater additionality reduces greenwashing risks. The corporation should prioritize solutions that are essential for achieving a net-zero transition.
Additionality**	Steel: Most reductions come from efficiency improvements, but impact is minor compared to total asset emissions.	Aluminum: Emissions cuts without adding new or additional renewable energy.

To mitigate uncertainties in supply chains data, your company can do the following:

For near-term goal:
- Leverage industry-specific sources and public databases to understand typical emission ranges at heavy-emitting production processes and at the product level.
- When evaluating green products, verify scope boundaries, certification schemes, recycled content, additionality, and the methodology used in emissions calculations to minimize greenwashing risks.
For near-zero ambition:
- Track suppliers’ emissions progress at granular levels (e.g., by unit process or emissions source) to support engagement for deep reductions.
- Prioritize additionality and deep decarbonization solutions that require capital expenditure investment and market adoption when assessing green product offerings.

Corporate Insights

“As an indirect buyer of raw materials, we find the mapping of inconsistencies and concerns in green product claims in this guide especially valuable. It helps us engage tier 1 suppliers more effectively, ask the right questions about additionality, and ensure our purchasing aligns with our low-carbon goals.”

“We align with the key considerations outlined in this guide to clarify green product claims. Our main challenges lie in inconsistent accounting methods, limited standardization of product-level disclosures, and a lack of reliable verification across materials. To address this, we request supplier certificates where available, benchmark products against best-in-class industry standards, and use our procurement leverage to promote transparency, verifiable data, and comparability in green product claims.”

At Amcor, we are dedicated to enhancing the quality of PCF data to deliver accurate Scope 3 emission information to our customers, guide our sustainability strategy, and achieve our decarbonization goals. Our pilot with RMI’s Plastic Conversion Guidance underscored the importance of having consistent, comparable, and reliable internal and upstream data. Equivalent data is critical for accurately assessing emissions performance and driving improvements. The pilot provided valuable insights into the variability of emissions data from direct supplier inputs, such as resin and power. It also highlighted the significant impact of upstream supplier performance, particularly concerning methane leaks during natural gas extraction. This highlighted opportunities to improve the collection and application of PCF data. As the industry adopts approaches like mass balance and certified content, enhancing data quality, consistency and transparency will be crucial for ensuring accuracy and enabling meaningful decarbonization across the value chain.

Case Study

Ball Corporation
Strengthening data integrity in Scope 3 emissions reporting

Ball Corporation takes a proactive stance in addressing the challenges of Scope 3 emissions, recognizing the difficulties posed by inconsistent data quality and reporting across the value chain. Collaborating closely with suppliers, the company enhances accuracy by:

Verifying emissions data for reduced uncertainties by leveraging tools such as the CRU database, conducting surveys, and implementing assurance processes.
Targeting guidance and coaching suppliers to uphold high reporting standards, helping them meet rigorous data quality and reporting requirements.
Prioritizing supplier-specific metrics like Product Carbon Footprint (PCF) values and pre- and post-consumer recycled content percentages to improve granularity and accuracy, rather than relying on industry averages to reduce inconsistencies, and drive carbon reduction goals for both Ball and its suppliers.

Ball reflects that this guide serves as a valuable resource to buyers as it offers mapping methodologies, sector-specific insights, and frameworks designed to tackle uncertainties in Scope 3 emissions reporting. This guide also encourages supplier collaboration, fostering active involvement in enhancing transparency across the supply chain and promoting sustained reductions in emissions.

Together for Sustainability
The role of standardization in Scope 3 management of chemical raw materials

The chemical sector is not only a large GHG emitting industry, but it is also intertwined with most supply chains, since over 95% of manufactured goods require raw material chemical inputs. At the same time, a vast variety of chemicals are often produced in complex, multi-stage, multi-output processes. The industry has recognized early on the need for a robust and standardized approach to product-level and Scope 3 carbon accounting, catering to its sectoral specificities.

Through the collaboration platform of the global association Together for Sustainability (TfS), the chemical industry has developed a comprehensive toolbox to enable companies to determine and exchange comparable and trustful PCF along their Scope 3 journey:

A first-of-its-kind PCF standard methodology aligned with the generic standards ISO14067 and the GHG Protocol, but adding more prescriptive clarity for chemical manufacturing, especially for multi-output allocations, data input selections, CCUS technologies, etc.
A standardized PCF data-model to harmonize PCF data queries and submissions as opposed to a company-specific questionnaire.
A PCF verification framework to provide standard guidance in the achievement and communication of PCF trust levels.
A digital PCF data exchange solution that is interoperable with other networks to facilitate the data exchange.
A training academy to accompany manufacturers to upskill and master the Scope 3 challenge.

The toolbox is complemented by various resources to illustrate decarbonization pathways and drive emission reductions. The key to its wide reception and practicality has been the collaboration of industry peers in a pre-competitive setting.

Accelerating Supply Chain Decarbonization