Carbon disclosure and emissions reporting have moved from a voluntary trust signal to a core business requirement. Regulators, investors, and customers now expect consistent disclosure across Scope 1, Scope 2, and Scope 3 emissions.
While most organisations report direct operational and energy-related emissions with confidence, Scope 3 remains difficult to capture. It spans suppliers, logistics, and product lifecycles, yet represents the largest share of emissions exposure.
The Deloitte 2024 Sustainability Action Report shows strong reporting for Scope 1 and Scope 2, but only 15% of companies disclose Scope 3 emissions. This gap increases regulatory risk and limits strategic decision-making. Carbon accounting gives procurement leaders a structured way to measure these emissions and translate supplier data into actionable insight.
what is carbon accounting?
Carbon accounting is the process of measuring, tracking, and managing greenhouse gas emissions across business activities and value chains. It provides a consistent system for understanding where emissions originate and how they change over time. Product carbon footprint, by contrast, focuses on emissions linked to a single product across its lifecycle, from sourcing to end use. Carbon accounting sets the framework. Product carbon footprint delivers precision at the decision level.
Carbon accounting involves measuring emissions across three levels:
- Scope 1 includes direct emissions from owned or controlled sources, such as fuel combustion in facilities.
- Scope 2 covers indirect emissions from purchased electricity, heating, or cooling.
- Scope 3 captures indirect emissions across the value chain, including suppliers, transport, and product use.
According to CDP, nearly 75% of an average company's emissions fall within Scope 3. Procurement, therefore, holds significant influence when it comes to lowering product carbon footprint. Product-level carbon accounting enables teams to convert Scope 3 data into business value by:
- Identifying preferred suppliers and enabling long-term, exclusive partnerships.
- Improving sustainability scores that guide customer and investor assessments.
- Increasing efficiency in product design, manufacturing, energy use, and transport.
- Supporting sustainable compliance while strengthening competitive advantage.
how can carbon accounting help lower product carbon footprint?
Product-level carbon accounting shifts sustainability from reporting to execution. Each capability below works as a standalone value driver while reinforcing the others.
creating transparency that drives accountability
Product-level visibility makes emissions tangible and actionable. Clear attribution of emissions to products and suppliers removes ambiguity in Scope 3 reporting. Procurement teams can validate product carbon footprint data, compare suppliers consistently, and assign responsibility where emissions originate. This transparency improves audit readiness and supports aligned decisions across regions and business units.
enabling regulatory readiness and risk control
Accurate emissions data strengthens compliance across evolving regulations. Structured carbon accounting reduces the risk of under-reporting, penalties, and reputational exposure. Early identification of data gaps allows organisations to respond proactively to CSRD, SEC, and industry-specific mandates. Consistent reporting also improves credibility with regulators and investors.
improving efficiency while lowering operational costs
Carbon data often reveals hidden inefficiencies. Energy-intensive processes, material waste, and transport inefficiencies become visible at the product level. Addressing these issues reduces emissions while lowering costs through energy optimisation, resource efficiency, and smarter logistics planning.
optimising suppliers and sourcing decisions
Supplier emissions frequently dominate the total product carbon footprint. Carbon accounting allows procurement teams to identify high-emission suppliers and engage them with clear improvement expectations. Data-driven sourcing decisions encourage greener practices, support supplier innovation, and strengthen long-term partnerships aligned with sustainability objectives.
supporting strategic planning and net-zero alignment
Reliable data improves long-term decision-making. Product-level insights help organisations set realistic targets, prioritise initiatives with the highest impact, and justify low-carbon investments. This clarity future-proofs portfolios and aligns procurement strategy with enterprise-wide net-zero commitments.
Infosys BPM helps organisations scale their carbon accounting capabilities using AI-first analytics, supplier data integration, and industry-aligned reporting. Its sourcing and procurement outsourcing services help capture product-level emissions and improve reporting accuracy across complex value chains. These insights support regulatory compliance and reduce product carbon footprint in alignment with business and industry needs.
implementing carbon accounting: a step-by-step approach
Effective carbon accounting requires structure, governance, and cross-functional alignment. A phased approach helps organisations build momentum while managing complexity.
- Collect emissions data across Scope 1, Scope 2, and Scope 3 using activity and spend data. Engage stakeholders early, address data gaps, and standardise inputs.
- Categorise and quantify emissions by source to estimate total impact at supplier and product levels.
- Map spend and prioritise high-impact categories to focus effort where emissions concentrate.
- Engage suppliers with clear data requirements, shared frameworks, and improvement incentives.
- Apply credible frameworks and verification processes to ensure accuracy and transparency.
- Invest in digital tools that support automation, analytics, and scalable reporting.
- Develop and implement reduction strategies based on product-level insights and business priorities.
This approach accelerates progress towards net zero while reinforcing sustainable competitive advantage.
conclusion
Product-level carbon accounting gives procurement leaders visibility into the most material source of emissions risk and opportunity. It transforms Scope 3 complexity into measurable insight, stronger supplier relationships, and targeted reductions in product carbon footprint. Organisations that act now strengthen regulatory confidence, improve operational efficiency, and support long-term value creation. As expectations continue to rise, procurement-led carbon intelligence becomes central to building resilient, future-ready businesses.
Frequently Asked Questions
How does carbon accounting contribute to sustainable procurement?
Carbon accounting helps organizations measure and manage emissions across the supply chain, particularly Scope 3 emissions, which are the largest source of carbon exposure. By providing transparency into supplier emissions, it enables better sourcing decisions and supports sustainability goals, leading to lower operational costs and enhanced ESG performance.
What is the difference between carbon accounting and product carbon footprint?
Carbon accounting measures the total emissions across an organization's operations, including Scope 1, 2, and 3. Product carbon footprint specifically tracks emissions associated with a single product throughout its lifecycle, helping businesses pinpoint emissions reduction opportunities at the product level for more effective sustainability planning.
How can product-level carbon accounting help businesses reduce carbon emissions?
Product-level carbon accounting provides detailed insights into a product's emissions, enabling procurement teams to identify high-emission suppliers, optimize resource use, and drive efficiencies in production and logistics. These actions can lower emissions, reduce costs, and enhance sustainability performance across the supply chain.
What challenges do businesses face in capturing Scope 3 emissions, and how can they overcome them?
Capturing Scope 3 emissions is challenging due to fragmented supply chains, limited data availability, and inconsistent reporting standards. To overcome these challenges, businesses must engage suppliers, standardize data collection processes, and implement robust carbon accounting frameworks to ensure accurate reporting and effective emissions reduction strategies.
