Scope 3 emissions refer to those not produced by the company. While organizations generally measure and control their Scope 1 and 2 emissions, Scope 3 emissions are under the control of outside suppliers or customers. Measuring Scope 3 emissions puts control back inside the company to allow for tracking activities across the entire business model — or value chain — from suppliers to end users.

Transparent communication about sustainability is essential to avoid so-called green-washing. Consumer demand for sustainable products and services has rapidly increased in recent years. Terms, such as “sustainable,” “green,” “environmentally friendly,” in product documentation or used in advertising raise the impression that sustainability is a characteristic of a product.

One of the guiding principles at EY, is that blockchains will do for business ecosystems what enterprise resource planning (ERP) did inside the enterprise. Detailed traceability allows tracking of emissions inventory and a better understanding of the impact of value chains in terms of carbon emissions. By using carbon credit tokens, either created or sourced on the market, companies can have real-time visibility into both their stocks and their actions toward a net-zero impact.

The industry faces claims of a severe lack of transparency, traceability and verifiability for corporate consumers and regulatory bodies. Blockchain-based APIs have the potential to improve verifiability and reduce transaction costs, and to a lesser degree address the permanence concerns of some projects.

Blockchain uses secure encryption and, with additional security layers applied to it, sensitive data can be read only by relevant parties. This allows company data to remain private. Blockchain is tamper-evident, so if fraudulent transactions and tampering were to occur, the blockchain is very efficient at flagging it immediately without having to corrupt the existing data.