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Scope 3SBTi · CBAMWhite Paper · June 2026

Decarbonizing What You Don’t Own

Supplier engagement, Scope 3, and upstream emissions in food, pulp and fertilizer — where the voluntary and regulatory levers point the same way.

By Climate Decode · · 7 min read

WHERE THE CARBON SITSOwn operations (Scope 1+2)11.4×Value chain (Scope 3)In agrifood the gap is wider still — the footprint is upstream
Value chain vs direct
11.4×
Scope 3 emissions average 11.4 times operational emissions
Scope 3 coverage
67%
minimum near-term coverage when Scope 3 is 40%+ of footprint
Ammonia for fertilizer
~80%
of all ammonia is produced as a fertilizer precursor
In This Article
The Problem

The Footprint Is Upstream

For a food, paper or fertilizer company, most of the carbon is not in its own factories. It sits upstream, in the farms, forests and chemical plants that supply it — what greenhouse-gas accounting calls Scope 3, the emissions in a company’s value chain rather than its own operations. In agrifood the gap is wider than anywhere, because the bulk of the footprint sits where the raw material is grown or made.

Own operations (Scope 1+2).11.4×Value chain (Scope 3)Cross-sector average (SBTi 2025) — a plan that stops at the factory gate misses most of the problem
Across all sectors, value-chain emissions average 11.4× direct operations. In agrifood the multiple is higher still.

A company can decarbonize what it owns, but most of its emissions belong to suppliers it does not control. Two forces are closing that gap. One is voluntary: the Science Based Targets initiative’s supplier-engagement target. The other is regulatory: the way the EU Carbon Border Adjustment Mechanism prices the emissions embedded in imported inputs. Both push a company to measure and act on emissions it does not directly produce.

The Voluntary Lever

Supplier Engagement, the SBTi Mechanism

The SBTi gives companies three ways to set a Scope 3 target: cut absolute emissions, cut emissions intensity, or engage suppliers. The supplier-engagement target is the method of choice when granular supplier emissions data is scarce — which in agrifood is most of the time. The mechanics follow the GHG Protocol, in four steps:

StepWhat happensThe rule behind it
1 · Build the Scope 3 inventoryFull value-chain inventory across the 15 GHG Protocol categoriesRequired when Scope 3 is ≥40% of the total footprint; target must cover ≥67% of Scope 3
2 · Select the suppliersRank by size, influence and risk — the largest contributors you can actually moveEngagement share is weighted by emissions, not by supplier count
3 · Run the programClear expectations, data collection, capacity-building, incentivesFor example: suppliers covering 70% of purchased-goods emissions
4 · Track the shareMeasure the proportion of engaged suppliers with credible SBTs by the stated yearThe target is a share of suppliers setting targets — not a tonne of CO₂

What the target actually is

The target is not a tonne of CO₂; it is a share of suppliers, weighted by emissions, setting credible targets of their own.

Food & Pulp

Scope 3 Is Land Use

For food manufacturers and paper companies, supplier engagement is where the footprint lives, not one option among several. The majority of their emissions are Scope 3, and most of that traces to land — the farms that grow ingredients and animal feed, and the forests that supply fibre. A food company’s largest carbon line is the agriculture behind its purchased products; a paper company’s is the forestry behind its pulp.

This is the same land-related Scope 3 that the SBTi Forest, Land and Agriculture standard covers, and it is why FLAG pairs an emissions target with a no-deforestation commitment that reaches up the supply chain. The levers — better farming practice, halting land conversion, protecting and restoring forest — sit with suppliers, not with the brand. Without engagement a food or pulp company cannot reach the bulk of its emissions, which makes a supplier program the central instrument of its decarbonization.

Your Scope 3 is farms and forests? We rank the suppliers worth engaging first.

See How →
Fertilizer

Upstream in the Chemistry, Priced by CBAM

Fertilizer carries its upstream emissions differently — inside the chemistry of the product — and CBAM already puts a price on them. CBAM treats a fertilizer as a complex good, whose embedded emissions are the emissions of its own production plus the embedded emissions of its precursors. Around 80 percent of all ammonia is produced as a precursor for fertilizer.

AmmoniaEmbedded: 2.82 t defaultNitric acidEmbedded: 2.61 t default+ Final production stepDirect + electricity emissionsAmmonium nitrateEmbedded: 2.39 tThe roll-up: supplier data or punitive defaults — there is no third option at the border
CBAM’s complex-goods rule: a downstream producer must obtain precursor data from its ammonia and nitric acid suppliers, or pay on the defaults.

Supplier engagement by another name

Under CBAM the exercise is mandatory, priced, and audited at the border. A producer that engages its precursor suppliers, or owns the ammonia step and decarbonizes it, lowers the embedded number that sets its CBAM bill.

Advisory by Climate Decode

Measure what you don’t own. Then move it.

Climate Decode builds the Scope 3 inventory, ranks the suppliers worth engaging first, and models the precursor roll-up that sets the CBAM number.

Talk to Our Team →Explore TerraNova
Where TerraNova Fits

One Data Set, Two Obligations

Whether the pressure comes from an SBTi target or a CBAM declaration, the requirement is the same: a company has to measure emissions it does not directly produce, find the suppliers and process steps that drive them, and act. TerraNova builds the inventory across all scopes, including the upstream and precursor emissions that dominate agrifood, and shows which suppliers and inputs carry the carbon.

For a food or pulp company, TerraNova ranks the suppliers worth engaging first and tracks their progress toward their own targets. For a fertilizer producer, it models the precursor roll-up that sets the CBAM number and the abatement that lowers it. The supplier program and the border declaration draw on the same underlying data, which is why the work to satisfy one largely satisfies the other.

Take-aways

Four Things to Hold On To

Continue in the Agriculture Series

The Sector Overview  ·  SBTi FLAG for Agrifood  ·  CBAM & Fertilizer

References & Sources

Where each claim comes from

Notes and sources for the figures in this paper.

  1. SBTi (2025). Engaging Supply Chains on the Decarbonization Journey, Version 1.1 (July 2025) — supplier-engagement method, 11.4× value-chain multiple, 40% inclusion threshold, 67% coverage, supplier selection by size, influence and risk.
  2. GHG Protocol, Corporate Value Chain (Scope 3) Accounting and Reporting Standard — the accounting basis for the Scope 3 inventory.
  3. SBTi (2026). Forest, Land and Agriculture Guidance, Version 1.2 — land-related Scope 3 and the no-deforestation commitment.
  4. European Commission, CBAM guidance for installation operators outside the EU — complex goods, precursor methodology (ammonia, nitric acid), default values, ~80% of ammonia produced as fertilizer precursor.

Decarbonizing what you don’t own.

Climate Decode helps food, pulp and fertilizer companies measure and move the upstream emissions that dominate their footprint — for SBTi, and for the border.