Your business may not be required to publish a climate report. Your largest customers may still require data from you to complete theirs.
That is how Scope 3 reporting reaches wholesalers, distributors and product suppliers.
Scope 3 covers emissions across a company's value chain. For buyers of packaging, uniforms, promotional merchandise, office products, foodservice disposables and other physical goods, those emissions include the products they purchase. The reporting obligation belongs to the customer, but much of the useful data sits with its suppliers.
The result is a new type of sales and account-management request:
Please provide the greenhouse gas emissions associated with the products we purchased from you.
Most wholesale systems cannot answer it yet.
What is Scope 3?
The GHG Protocol divides a company's greenhouse gas emissions into three scopes.
- Scope 1: Direct emissions from sources the company owns or controls
- Scope 2: Indirect emissions from purchased electricity, steam, heating and cooling
- Scope 3: Other indirect emissions across the upstream and downstream value chain
The GHG Protocol identifies 15 Scope 3 categories. For product suppliers, the most relevant are often:
- Category 1: Purchased goods and services
- Category 2: Capital goods
- Category 4: Upstream transport and distribution
- Category 9: Downstream transport and distribution
- Category 11: Use of sold products
- Category 12: End-of-life treatment of sold products
The applicable category depends on the reporting company's position in the chain. A product can be a sold product for the supplier and a purchased good for the customer.
What Australia's climate reporting rules change
Australia's mandatory climate-related financial reporting rules began on 1 January 2025 and are being phased in across three groups.
- Group 1: Financial years beginning on or after 1 January 2025
- Group 2: Financial years beginning on or after 1 July 2026
- Group 3: Financial years beginning on or after 1 July 2027
The size thresholds are based on revenue, assets and employees, with additional rules for certain NGER reporters and asset owners. ASIC provides the current eligibility detail.
AASB S2 requires reporting entities to disclose material climate-related information, including Scope 1, 2 and 3 emissions. It also requires entities to consider the entire value chain when assessing relevant categories and climate-related risks and opportunities.
There is first-year transition relief from disclosing Scope 3 emissions. That does not make supplier data irrelevant for a year. Reporting companies still need to map their value chains, develop systems, identify material categories and prepare for the following period. Many also have voluntary targets, global reporting obligations or customer commitments that already require Scope 3 data.
As of July 2026, Group 1 companies have begun lodging their first reports and Group 2 reporting periods have commenced. Supplier requests are therefore likely to become more structured, not disappear.
Why buyers ask wholesalers
Corporate procurement data normally identifies the immediate vendor and amount spent. It may not identify:
- The physical composition of each product
- Product and packaging weight
- Factory or country of manufacture
- Manufacturing process
- Supplier-specific product emissions
- Freight route
- End-of-life assumptions
The wholesaler sits between buyer and manufacturer and often holds the only product-level map that connects SKU, quantity, supplier and customer order.
That creates a responsibility and an opportunity. The wholesaler that can supply useful data reduces work for the customer and becomes more deeply embedded in the account. The wholesaler that cannot may be replaced by estimates — or by a supplier that can.
The four main calculation methods for purchased goods
The GHG Protocol's guidance for Category 1 describes several approaches.
Spend-based method
Purchase value is multiplied by an environmentally extended input-output emission factor for the relevant economic category.
Useful for: Screening a large spend ledger when product data is unavailable.
Limitations: Results move with price, exchange rates and broad category averages. Paying more for the same product can appear to create more emissions. It is weak for comparing specific products or tracking physical improvements.
Average-data method
Physical quantities, such as kilograms or units, are multiplied by average cradle-to-gate emission factors for the product or material category.
Useful for: Improving on spend estimates where basic quantities and product categories are available.
Limitations: A category average may not reflect the actual material mix, recycled content, manufacturing location or supplier.
Hybrid method
Available supplier-specific activity data is combined with secondary data for missing processes.
Useful for: Building practical product estimates while primary data coverage improves.
Limitations: Requires clear boundaries, data-quality controls and consistent methods.
Supplier-specific product method
The buyer uses a cradle-to-gate footprint for the actual product purchased. The GHG Protocol describes supplier-specific product-level data as the most accurate method because it relates to the specific good and avoids allocation.
Useful for: Priority products and suppliers, customer reporting, product comparison and tracking real changes.
Limitations: Requires product-level data, a defensible method and supplier participation.
The methods can coexist. A customer may use spend-based estimates for the long tail, average physical data for major categories and supplier-specific product footprints for strategic purchases.
What data should a supplier provide?
A useful product emissions record includes:
- Supplier and customer product identifier
- Product description
- Declared unit
- kg CO₂e per declared unit
- Lifecycle boundary
- Reporting or calculation period
- Material and packaging composition
- Manufacturing and geographic assumptions
- Transport included or excluded
- Primary versus secondary data share
- Emission-factor sources
- Methodology and standards
- Data quality or confidence
- Verification status
- Contact for questions
The result should map to the commercial unit. If a customer bought 200 cartons, the supplier needs to explain how the per-item or per-kilogram result converts to those cartons.
Product carbon footprints and customer orders
Once the product record is stable, the order calculation is straightforward:
kg CO₂e per unit × units purchased = purchased-product emissions
The hard parts are upstream:
- Defining the unit
- Getting the product weight right
- Separating the product from its surrounding packaging
- Selecting consistent emission factors
- Handling product variants
- Maintaining versions as specifications change
- Avoiding double counting of freight or packaging
The order report should show which lifecycle stages are included. For Category 1, cradle-to-gate data is generally the starting point. Separately purchased transport may belong in Category 4 depending on the commercial arrangement and reporting boundary.
Do not promise a "complete Scope 3 footprint" when you are providing only a product's cradle-to-gate emissions. The customer may need to add distribution, use and end-of-life in other categories.
How wholesalers should respond to a Scope 3 data request
1. Ask how the customer will use the data
Clarify:
- Which products and period are in scope?
- Do they need Category 1 cradle-to-gate data?
- What unit and file format do they require?
- Do they have a prescribed methodology?
- Is third-party verification required?
- Do they need current estimates or historical order data?
This prevents weeks of work producing the wrong boundary.
2. Map customer SKUs to supplier SKUs
Customers may refer to their own item codes, descriptions or invoices. Create a persistent mapping between customer, distributor and supplier identifiers.
3. Establish initial coverage
Use existing specifications and defensible secondary data to calculate consistent estimates for priority products. Flag gaps rather than leaving the entire request unanswered.
4. Improve the material inputs
Focus supplier engagement on the data that most affects results: product weight, material mix, recycled content, manufacturing location and high-impact processes.
5. Produce a transparent report
Include the method, boundary, units, data quality and important assumptions. Give the customer enough information to decide whether the data is appropriate for its inventory.
6. Make it repeatable
Store the product footprints as governed product data and connect them with future orders. The second annual request should not require another spreadsheet project from zero.
What not to send
Your company's total carbon footprint
An organisational inventory may demonstrate that you measure emissions, but the customer cannot reliably allocate it to the products purchased without a suitable method.
An offset certificate
Offsets do not tell the customer the gross emissions embedded in the product. Scope 3 inventories generally require the emissions before any offsetting claim.
An EcoVadis medal
EcoVadis can demonstrate sustainability-management maturity. EcoVadis itself states that its medal is not a product label and does not indicate that products are sustainable.
A number without a unit or boundary
"The footprint is 0.4 kg" is unusable if nobody knows whether that means one item, a pack, a kilogram, cradle-to-gate or cradle-to-grave.
False precision
An estimate based mainly on average data should not be reported to six decimal places. Use appropriate rounding and state data quality.
How this becomes a sales advantage
Many suppliers treat Scope 3 questions as an administrative burden. That misses the commercial shift.
Customers need better data. Product suppliers are one of the few parties that can provide it. A wholesaler that responds quickly can:
- Retain reporting customers
- Qualify for corporate and government tenders
- Help buyers compare alternatives
- Demonstrate the impact of product substitutions
- Produce customer-specific footprint reports
- Move conversations away from price alone
One wholesale customer used Zilch's product-level sustainability, sourcing and health information to support a successful catering-disposables contract with McDonald's. The point is not that carbon data wins every deal. It is that decision-useful product information can turn a reporting request into a stronger commercial offer.
A 90-day readiness plan
Days 1–30: map
- Identify customers likely to request Scope 3 data
- Export the SKUs and quantities they purchase
- Clean product units, weights and pack sizes
- Map supplier and customer identifiers
- Prioritise high-spend and high-volume categories
Days 31–60: calculate
- Create consistent initial product footprints
- Document boundaries and secondary-data assumptions
- Flag high-impact and low-confidence inputs
- Request material improvements from key suppliers
- Review outliers
Days 61–90: deliver
- Produce the first customer order report
- Agree the file format and reporting cycle
- Connect the data to tenders, quotes or product pages
- Track data quality and supplier responses
- Establish an annual update process
Where Zilch fits
Zilch helps wholesalers, suppliers and distributors calculate product-level carbon footprints and connect them with catalogue and customer data. It supports bulk SKU workflows, product and packaging inputs, transport, branding, reports and customer-order outputs.
The platform is designed to move purchased-goods reporting from broad spend estimates toward product-level information without commissioning a separate consulting study for every SKU.
If corporate customers are starting to ask for product emissions, see how Zilch works for distributors.