Why CO₂ reporting is increasingly becoming a contractual requirement

From awareness to obligation

CO₂ reporting is appearing more frequently in contractual terms. This is no coincidence: large companies want to lower their climate impact and need their entire value chain to follow suit. Suppliers and service providers are therefore being actively encouraged to take part in the SBTi: the internationally recognized framework for science-based climate targets.

What is the SBTi?

The Science Based Targets initiative (SBTi) helps companies set climate goals in line with the Paris Agreement. The objective: reduce emissions by at least 90% by 2050, with the remaining 10% potentially offset through climate projects.

Companies whose targets are validated by SBTi demonstrate that they are truly committed to sustainability – an advantage when it comes to financing, partnerships, and client relationships.

CO₂ emissions according to scope 1, 2, and 3 – what does that mean?

• Scope 1: Direct emissions (e.g., company vehicles, owned buildings)

• Scope 2: Indirect emissions from purchased energy (e.g., electricity)

• Scope 3: Other indirect emissions (e.g., transport, suppliers)

Companies must set both short- and long-term targets for scope 1 and scope 2.

If scope 3 emissions account for more than 40% of total emissions, short-term targets are also required for scope 3.

For most companies, more than 90% of their emissions fall under scope 3. It is therefore logical that clients ask their suppliers to commit to the SBTi framework. If they don’t, the client risks losing their own SBTi status, and you risk losing your contract.

A special process for SMEs

SBTi recognizes that small and medium-sized enterprises (SMEs) do not have the same resources as large corporations. That’s why there is a simplified process with lower costs and fewer obligations. SMEs are not required to set scope 3 targets, but they must commit to measuring and reducing them. The focus is on absolute reduction of scope 1 and 2 emissions within 5 to 10 years.

To qualify for the SME way, you must:

• Emit less than 10,000 tons of CO₂ in scopes 1 & 2;

• Not be a financial institution or an oil & gas company;

• Not be a subsidiary of a company required to follow the standard SBTi pathway;

• And meet at least three of these criteria: <250 employees; turnover <€50 million; assets <€25 million; not active in the FLAG sector (Forest, Land, and Agriculture).