Executive summary
FY2026
the year STI-listed companies must start disclosing Scope 3 emissions
4
calculation methods in the GHG Protocol's accuracy hierarchy; spend-based is the least accurate
Key conclusions
- If a supplier provides no activity-based data, its customer has to report an industry-average estimate in its place.
- To move up the GHG Protocol's accuracy hierarchy, a plant does not need a new disclosure programme. It needs its existing energy and fuel data logged in enough detail to allocate to a single order.
- A verifier asks where each figure came from: which meter, which log and which date. A spend-based estimate cannot answer that, because it is not built from those records.
From the financial year starting 1 January 2026, Straits Times Index constituents on SGX must disclose Scope 3 emissions. This is in addition to the Scope 1 and 2 reporting that has been mandatory for all listed companies since FY2025. For most of these companies, a material share of the Scope 3 figure falls in Category 1: the emissions embedded in what they buy, such as raw materials, contract manufacturing and freight.
The GHG Protocol states what happens when a supplier does not provide this data. The customer uses a spend-based estimate: an industry-average emission factor multiplied by the invoice value. This is the least accurate method the Protocol defines, and it produces results that a verifier will question. If the customer negotiates a discount with a vendor, the reported emissions fall, even though the physical activity has not changed.
The GHG Protocol ranks four methods, from least to most accurate
The Protocol's Scope 3 technical guidance ranks four calculation methods in increasing order of accuracy. The customer cannot decide where a supplier sits on this table.
| Method | What it is derived from | What it actually reflects |
|---|---|---|
| Spend-based | Invoice value × an industry-average emission factor | The sector's average carbon intensity per dollar spent |
| Activity-based | The supplier's own energy, fuel and material use for the order | What this supplier actually consumed to produce it |
| Supplier-specific | The supplier's verified emissions allocated to the specific product | A defensible, auditable number tied to this transaction |
| Product-specific | A full product carbon footprint, cradle to gate | The most granular figure the Protocol recognises |
The data a supplier needs is already recorded by its plant systems
To move up that table, a supplier must log the energy draw, fuel consumption and throughput that its automation and metering systems already record. These are the same figures that go into the supplier's own Scope 1 and 2 inventory. They must be logged in enough detail to allocate to a specific product run, and summed at site level only afterwards.
This is a decision about instrumentation and data retention, and it is made when the metering is designed. A gate meter that only records total monthly site consumption can support a spend-based estimate. It cannot support an activity-based estimate, because its data cannot be allocated to one customer's order.
Four things must be built into the metering design, because an audit cannot add them later
- Sub-metering at process or line level, so that consumption can be allocated to a product.
- Fuel logs recorded at the point of use (generators, forklifts and site vehicles), so that nobody has to reconstruct them later from purchase invoices.
- Data retention that lasts beyond the reporting cycle the data was collected for, because a verifier will ask for the source record.
- A named owner for the meter data. A sensor with no owner drifts out of calibration, and nobody notices until an auditor asks for evidence that it stayed calibrated.
A verifier first asks where each figure came from
As a GHG Lead Verifier, I first ask where a figure came from: which meter, which log, which date, and who can reproduce it if asked again. A spend-based estimate cannot answer that question, because it was never built from those records.
Regulation now decides whether a supplier does carbon accounting. The decision is made upstream of the supplier, on its customer's timeline. The supplier still has one choice: whether the figure its customer reports about it comes from the supplier's own data, or from an industry average.
