Carbon tracking is the foundation of any credible supply chain sustainability programme. Without reliable data, companies cannot identify their highest-emitting suppliers, make informed sourcing decisions, or demonstrate genuine progress to regulators and investors. Yet a growing body of research reveals that carbon footprint tracking in supply chains is far less reliable than most businesses realise—and the methods companies rely on today can misstate emissions by hundreds of percent.
The Scope 3 Measurement Problem
Scope 3 emissions—those generated across a company's value chain rather than its own operations—represent approximately 75% of total corporate greenhouse gas emissions , according to MIT's State of Supply Chain Sustainability research. Yet they remain the least measured and least managed of the three emission scopes.
MIT's 2024 and 2025 research describes Scope 3 calculation methods as "inflexible and prone to error," with margins of error so "drastic" they can actively undermine confidence in sustainability decision-making. Over 80% of businesses say Scope 3 is difficult to quantify , which slows adoption of net-zero targets and supply chain decarbonisation programmes. Scope 3 has the fewest company initiatives and the highest share of companies with no plan to address it—now or in the near term.
Why Carbon Footprint Tracking in Supply Chains Is Unreliable
The unreliability is not simply a software or resourcing problem. It runs through the fundamental methods companies use to estimate supply chain emissions.
Spend-Based Accounting: The 557% Problem
The most widely used Scope 3 screening method is spend-based carbon accounting: multiply financial spend on a category by a sector-average emission factor to estimate CO2e. It requires no supplier data, covers all spend categories easily, and is fast to apply. It is also systematically inaccurate.
A 2026 analysis comparing spend-based and activity-based methods across 83 digital advertising campaigns found that spend-based calculations overstated emissions by an average of 557% , with a median overstatement of 458%. A ClimatePartner case study found spend-based accounting overestimated purchased-services emissions by 37% . Thermo Fisher Scientific's internal comparison, cited by CDP's global head of supply chains, found categories where spend-based estimates were 60–70% lower than actual supplier data in some cases and 2–4 times higher in others—leading CDP to describe many spend-based results as "so wildly off they are useless for strategic planning."
The GHG Protocol's 2024 stakeholder consultation found widespread calls to limit or phase down spend-based methods due to the "high levels of uncertainty" they introduce into Scope 3 inventories.
Process LCA: The 50% Underestimation Problem
Bottom-up process-based life-cycle assessments take a more detailed approach, tracing emissions through specific production stages. But they typically truncate the system boundary—stopping at first or second-tier suppliers and ignoring more distant supply chain tiers that contribute substantially to total emissions.
Stanford's Sustainable Finance Initiative review found that this truncation can cause process LCA to underestimate supply-chain emissions by more than 50% compared to economy-wide input-output models. Two "GHG Protocol-compliant" methods applied to the same product can differ by a factor of two simply because of how each defines its system boundary.
Commercial Data Providers: Correlations as Low as 1%
Companies increasingly rely on third-party commercial datasets to fill in supplier-level Scope 3 estimates. Stanford's review found that these datasets for the same company can show correlations as low as 1% between different providers—meaning different vendors give essentially unrelated numbers for the same supply chain footprint.
This reflects differences in underlying models, emission factor choices, system boundaries, and proxy assumptions. It makes supply chain analysis highly sensitive to which data source a company chooses, and undermines comparability of results across time and across suppliers.
Incomplete Coverage Hides Half of Emissions
The GHG Protocol allows companies to omit Scope 3 categories where primary data is unavailable, as long as omissions "don't compromise relevance." This discretion, combined with flexible organisational boundaries, means Scope 3 inventories vary enormously in scope and comparability.
The UNEP/Graduate Institute analysis concludes that current Scope 3 accounting approaches are "not fit for the purpose of comparing emission data between entities" due to inconsistent category coverage and use of estimates. The same research finds that corporate disclosures typically omit around half of total emissions when compared to more complete system-wide estimates.
The Supplier Data Problem
All of these method-level failures are compounded by a fundamental data quality problem: companies simply do not have the primary supplier data needed to move beyond proxies.
Around 70% of companies say they lack sufficient supplier data to accurately calculate their Scope 3 emissions, according to MIT's 2025 research. Among companies running supplier engagement programmes through CDP, only around 2% of suppliers provide the product-level life-cycle data buyers actually need. Meanwhile, 66% of companies track supply chain emissions via spreadsheets , with nearly 35% using spreadsheets exclusively.
The result is a compounding cycle: inadequate data leads to coarse proxies, coarse proxies discourage investment in better data collection, and the cycle continues.
What Unreliable Carbon Tracking Costs You
The consequences of inaccurate supply chain carbon data are practical and growing. The EU's Corporate Sustainability Reporting Directive (CSRD), effective from 2025, requires companies to measure and report Scope 3 with far greater precision than current methods typically deliver. Companies relying on spend-based estimates or incomplete coverage face growing compliance risk.
Strategically, decisions about supplier selection, contract renegotiation, and sourcing alternatives are only as good as the carbon data behind them. If spend-based estimates overstate one category by 400% while understating another by 60%, any "data-driven" sustainability strategy is built on misleading foundations.
Commercially, 73% of major purchasers are either deselecting or considering deselecting suppliers based on environmental performance—making those decisions using carbon data. Suppliers who cannot demonstrate accurate carbon performance are increasingly at risk.
From Unreliable Estimates to Accurate Data
The path to reliable supply chain carbon tracking starts with replacing proxy methods with activity-based measurement—using actual transaction data from invoices and purchase orders rather than financial spend multiplied by sector averages.
Platforms like Simple extract activity-based emissions data directly from existing business documents without requiring manual supplier questionnaires. This delivers precise CO2e calculations at the supplier and product level, grounded in actual purchasing activity.
This shift does more than improve accuracy. It makes carbon data operational: something companies can use to evaluate suppliers, negotiate contracts, and report with confidence—rather than a compliance exercise built on estimates that can be off by hundreds of percent.
For a broader view of why sustainable brands are failing, see Why Most Sustainable Brands Fail: The Hidden Supply Chain Crisis . For the organisational and structural barriers that sit alongside measurement failures, see Why Companies Struggle With Supply Chain Sustainability .