Scope 3 reporting under CSRD and SBTi: what you actually need

Two major frameworks are now driving companies toward the same outcome: comprehensive scope 3 measurement. The EU’s Corporate Sustainability Reporting Directive (CSRD) mandates scope 3 disclosure (where climate is material, alongside scope 1 and 2) for in-scope companies under ESRS E1. The Science Based Targets initiative (SBTi) requires scope 3 targets for any company where value chain emissions exceed 40% of total emissions, a threshold most companies exceed in practice.

The problem is that many sustainability teams treat these as two separate workstreams, running parallel data exercises for what is fundamentally the same underlying inventory. They end up duplicating effort, creating methodological inconsistencies, and missing the fact that a single well-structured, GHG Protocol-compliant scope 3 inventory can serve both purposes.

Here is exactly what each framework requires, where they align, where they diverge, and how to prepare scope 3 data that satisfies both.

What scope 3 data CSRD actually requires

CSRD’s original scope, designed to cover around 50,000 EU companies, was substantially revised by the EU Omnibus Simplification Package I, provisionally agreed by the EU Parliament in December 2025 and formally progressing through the legislative process in 2026. The revised threshold removes approximately 90% of previously in-scope companies. Mandatory CSRD reporting now applies to companies with more than 1,000 employees and annual turnover exceeding €450 million, while listed SMEs are no longer automatically in mandatory scope.

For companies that meet the new criteria, scope 3 obligations are anchored in ESRS E1 (Climate Change). The simplified ESRS standards, proposed by EFRAG with a 61% reduction in mandatory data points (from approximately 1,100 to 430), are progressing through formal EU adoption in 2026, though scope 3 GHG disclosure requirements have been preserved. Wave 1 companies (those previously subject to NFRD) are reporting on 2026 data in 2027; Wave 2 company timelines were delayed by two years under the Omnibus package to report in 2028 on FY 2027. In line with ESRS E1, in-scope companies must disclose:

• Total gross scope 3 GHG emissions, broken down by significant category 
• The methodology and emission factor databases used for each category 
• The primary vs. secondary data split: a CSRD-specific concept that does not appear in SBTi’s criteria in the same form. Primary data means supplier-specific or activity-based data obtained directly from value chain actors (meter readings, weight/volume invoices, supplier-reported emissions). Secondary data means spend-based estimates using industry-average emission factors. CSRD requires you to disclose what proportion of each category relies on each type 
• Reduction targets and the percentage of scope 3 emissions they cover, as part of a wider climate transition plan 
• Consistent year-on-year methodology: CSRD requires businesses to update a scope 3 inventory for a “significant change in calculation methodology” and disclose revised comparative figures (unless impracticable) as well as explaining the change
• CSRD also requires a double materiality assessment (DMA): a structured process identifying which sustainability topics are material both because of your impact on climate (impact materiality) and because of climate’s effect on your business (financial materiality). For scope 3, the DMA determines which of the 15 categories require detailed disclosure and which can be excluded with documented justification. The Omnibus simplification removed sub-sub-topic analysis from the DMA while preserving its core structure and introducing a “fair presentation” principle. The goal is to provide an accurate picture of your business, not an exhaustive checklist.

It’s also worth noting that CSRD disclosures are subject to mandatory external limited assurance, meaning a third-party auditor must verify that your disclosures meet the standard. This is a materially higher bar than SBTi’s evidence-package-based review.

SBTi scope 3 requirements: the real standards

SBTi Scope 3 requirements become mandatory when your scope 3 emissions represent 40% or more of your combined scope 1, 2, and 3 total. In practice, this threshold is almost always exceeded. CDP data shows that scope 3 accounts for 70-90% of emissions across sectors, with financial services companies regularly reporting scope 3 at 98% or more of their total footprint.

Once the threshold is triggered, the coverage requirements are specific:

• Near-term targets (typically 5–10 years out) must cover at least 67% of total Scope 3 emissions
• Long-term or net-zero targets must cover at least 90% of total Scope 3
• SBTi’s proposed Corporate Net-Zero Standard V2 includes discussion of extending long-term coverage to 100%

Critically, you cannot simply ignore categories for which data is difficult to obtain. SBTi requires a quantitative materiality screen of all 15 GHG Protocol categories. Exclusions are only permitted when the sum of all excluded categories does not exceed 5% of a business’ total scope 3, and each exclusion must be documented with quantitative evidence, not a general statement about data availability.

Data quality: Spend-based estimates are accepted by SBTi for submission, but not as a permanent position. Submissions must include a documented plan for improving data quality toward activity-based and then supplier-specific data over the life of the target period. There is no fixed primary/secondary split requirement, but reviewers expect a credible improvement trajectory.

V1 vs V2: Companies currently planning submissions are aligning themselves with SBTi’s Corporate Net Zero Standard and the  Near-Term Criteria.

FLAG emissions: If Forest, Land and Agriculture emissions exceed 20% of your total footprint, a separate FLAG-specific target is required. This applies not only to agricultural producers but also to food retailers, hospitality groups, and some apparel businesses with significant natural-fibre supply chains.

5-year mandatory review: Companies with SBTi targets need to complete a review 5 years after submission to review methodological alignment, not emissions performance.

Where CSRD and SBTi overlap (and where they don’t)

The most common question from sustainability teams managing both obligations is whether the same data can serve both frameworks. The answer is largely yes, a GHG Protocol-compliant scope 3 inventory built for CSRD disclosure directly forms the evidential foundation for an SBTi submission. 

Where the frameworks converge:

• Both use the GHG Protocol Corporate Value Chain Standard as their methodological foundation.
• Both require you to screen all 15 categories and document exclusions with quantitative justification. Although for CSRD, as an alternative, companies have the option of using the categories provided by the ISO 14064-1:2018 standard (i.e. scope 1 &2, scope 3 Categories 3,4,5,6)
• Both expect annual data quality improvement and neither treats a permanent reliance on spend-based estimates as acceptable.
• And for both, Category 1 (Purchased Goods and Services) tends to dominate. It is typically the largest scope 3 category for manufacturing, retail, and professional services companies, so reporting needs to be able to stand up to scrutiny.

Where they diverge:

The most significant practical divergence is on downstream categories. A CSRD double materiality assessment may determine that certain downstream categories, for example, Category 11 (Use of Sold Products), are not material for your specific business, allowing you to exclude them from your detailed disclosures. SBTi’s 67% coverage rule for near-term targets is based purely on your total greenhouse gas footprint. If your downstream categories represent a significant volume of your total emissions (tCO2e), you may be forced to include them in your target boundary simply to reach that 67% threshold, regardless of your CSRD materiality determination. Companies that build their scope 3 inventory purely around CSRD materiality have found their SBTi submissions short of the 67% threshold as a result. Building a complete inventory across all 15 categories from the outset protects both submissions.

What are the common scope 3 reporting mistakes that fail audits?

Running CSRD and SBTi as separate data exercises. The underlying inventory is the same; the output is different. Building two parallel methodologies creates inconsistencies that flag in CSRD assurance and SBTi review alike.

Excluding categories without quantitative justification. Both frameworks require documented evidence for every exclusion. The sum-of-excluded-categories check against the 5% threshold is mandatory for SBTi; CSRD auditors expect equivalent discipline. “We don’t have data for this category” is a data gap requiring a plan, it is not an exclusion rationale.

Misclassifying activity data as primary for CSRD purposes. Activity-based data uses industry-average emission factors, which ESRS E1 classifies as secondary data. Only data obtained directly from value chain partners, like supplier-reported emissions, EPDs, and PCFs, is primary. Misclassifying the split inflates the reported primary data percentage and creates an assurance risk.

Changing methodology before locking the base year. SBTi requires the GHG Inventory base year to be no more than two years before submission. ESRS 1 dictates that an undertaking must provide restated comparative figures when it has: redefined or replaced a metric or target, identified new information regarding estimated figures from the preceding period, or discovered “material prior period errors” (omissions or misstatements from a failure to use reliable information). Switching emission factor databases mid-process creates both problems simultaneously.

Overlooking downstream categories for SBTi coverage. Companies focused on upstream data often find their SBTi near-term coverage falls short of 67% because downstream categories, previously deprioritized, turn out to be necessary to cross the threshold. SBTi requires all material categories to be included, with downstream receiving the same quantitative materiality screen as upstream.

Treating the value chain cap as a reduction in your own obligations. The Value chain cap introduced to CSRD post-Omnibus gives companies with fewer than 1,000 employees the right to refuse data requests that go beyond voluntary reporting standards. While this protects suppliers, it does not reduce CSRD disclosure obligations for in-scope businesses, or SBTi primary data improvement commitments.

How to prepare scope 3 data for both frameworks

The sequencing matters as much as the methodology:

1. Start with your double materiality assessment. CSRD requires it; it also identifies your highest-emission scope 3 categories, exactly what you need to plan SBTi coverage. It’s worth noting, that a CSRD double materiality assessment identifies topics based on impact and financial materiality risks. The SBTi target boundary is established purely by conducting a quantitative greenhouse gas inventory across all 15 GHG Protocol categories. Because of this, a category could technically be deemed “not material” under CSRD’s risk assessment, but still be mathematically required to hit SBTi’s strict 67% near-term coverage threshold based on emissions volume

2. Build a complete GHG Protocol-compliant inventory across all 15 categories. Use spend-based data as your starting point where activity or primary data is not yet available. Document inclusions and exclusions with quantitative evidence from the outset.

3. Classify data quality by category: primary or secondary. This directly satisfies CSRD’s disclosure requirement under ESRS E1 and simultaneously establishes your SBTi data quality baseline. Reviewers from both processes look for this structure.

4. Lock your base year before submission. Align your CSRD reporting year with your SBTi base year wherever possible. Two different reference points create two sets of restatement obligations, an avoidable source of complexity.

5. Build toward 67%+ coverage through your highest-emission categories. Category 1 typically carries most of the coverage weight. Supplier engagement on those categories improves both your SBTi coverage percentage and your CSRD primary data ratio simultaneously.

6. Build the audit trail from the start. CSRD requires external assurance; SBTi requires an evidence package. The same documentation – calculation traces, emission factor sources, exclusion rationales, methodology records – serves both. Build it once, not twice.

See how our scope 3 platform handles both frameworks →