Companies are pledging to cut carbon emissions, but many still can’t see where most of them come from. A new MIT study finds that gaps in supplier data and uneven use of digital tools are slowing efforts to measure and reduce emissions across global supply chains.
Data Gaps Undermine Scope 3 Accuracy
A survey of more than 1,200 professionals by MIT’s Sustainable Supply Chain Lab (SSCL) shows that 85% of companies have maintained or expanded sustainability programs this year. Yet roughly 70% admit they don’t receive sufficient emissions data from suppliers to calculate Scope 3 greenhouse gases, which can represent up to three-quarters of total carbon output.
While 40% of companies accurately track their direct Scope 1 and purchased-energy Scope 2 emissions, fewer than half apply the same rigor to Scope 3. The shortfall, according to MIT researchers, reflects both supplier data constraints and internal process weaknesses. In North America, for instance, nearly half of companies still rely on spreadsheets for emissions tracking, compared with just 32% in Europe, where firms are adopting digital life-cycle assessment tools to model emissions from raw materials to end-of-life disposal.
“Organizations tend to act on what they can measure,” said Josué Velázquez Martínez, SSCL director. “But without credible data, decisions on emissions reductions risk missing the mark entirely.” Recent trade reports suggest that digital product passports and supplier traceability tools, increasingly mandated under EU policy, could begin to narrow that gap by 2026.
Regulation vs. Market Pressure Drives Action
The MIT study also highlights how regional dynamics shape sustainability priorities. European firms face growing compliance pressure under the EU’s Corporate Sustainability Reporting Directive (CSRD), which mandates granular disclosures of environmental performance. In contrast, North American companies cite investor expectations and executive leadership as the main forces behind their climate strategies.
The uneven policy environment is creating divergent levels of transparency. Many U.S. firms are prioritizing carbon accounting readiness ahead of the SEC’s pending climate disclosure rules, while Asian manufacturers, particularly in automotive and electronics sectors, are accelerating supplier emissions reporting to stay eligible for global tenders.
From Compliance to Competitive Edge
As sustainability reporting becomes mandatory across regions, emissions transparency is shifting from a reputational exercise to a core element of supply chain competitiveness. The companies that treat Scope 3 visibility as a data infrastructure challenge, not just an ESG requirement, will be first to turn compliance costs into operational advantage. By embedding emissions intelligence into sourcing, logistics, and design decisions, they can align decarbonization with cost efficiency and resilience, long before regulators force the issue.
