As the European Commission re-evaluates the scope and rollout of the Corporate Sustainability Reporting Directive (CSRD), some companies might be tempted to de-prioritize Scope 3 emissions management. However, this perspective misses a fundamental business reality: the chemical industry's path to meaningful decarbonization runs directly through value chain emissions.
Scope 3 greenhouse gas (GHG) emissions are critical datapoints that represent the largest opportunity for collective impact across our industry. The extended regulatory timeline for CSRD presents a unique opportunity, the extra time to build robust systems and develop deeper supplier relationships. At Trinseo, we are using this extra time deliberately to advance our Scope 3 capabilities to help position us and our value chain partners for success. By diving into this work now, we are creating business value through enhanced stakeholder relationships and strategic decision-making across value chains.
Building the Foundation for Value Chain Decarbonization
When Trinseo established its Climate Change goals, we committed to establishing, reporting and managing our Scope 3 emissions by 2025, well ahead of any regulatory mandate. What started as an ambitious target has evolved into a strategic advantage, and we were thrilled to achieve our goal a year early.
However, our Scope 3 journey has just begun. In 2024, we completed our Scope 3 Inventory and received limited assurance on these calculations. These emissions represent approximately 90% of Trinseo's total carbon footprint. This situation is not unique to us. Across the chemical industry, most emissions occur upstream and downstream from direct operations. The difference lies in how companies choose to address this reality. We took a methodical approach, mapping our value chain according to the Greenhouse Gas Protocol and identifying 11 of 15 relevant categories.
This data became the foundation for everything that followed: our governance structure, supplier engagement strategy, and reduction planning. Most importantly, it gave us data to support our engagements with both customers and suppliers about their own climate strategies, creating unique business opportunities that enable us to work together.
Turning Collaboration into Competitive Advantage
What sets our approach apart is the recognition that Scope 3 success requires genuine partnership. We've hosted webinars and one-on-one meetings with suppliers to understand their challenges and share our expertise. For our largest suppliers, major chemical companies with established climate programs, these conversations focus on alignment and acceleration. For smaller suppliers who may have fewer resources, we provide education and support to help them begin their own sustainability journeys.
We're leveraging our Scope 3 experience to develop a reduction simulation model that can aid in aligning our business development projects and decarbonization initiatives. This dynamic modeling capability will help us explore science-based reduction targets and navigate the changing regulatory landscape, including anticipated regulations like California’s climate disclosure laws and CSRD.
The path forward requires maintaining our collaborative approach while scaling our impact. Scope 3 emissions are inherently interconnected across value chains, making partnership essential for meaningful progress. At Trinseo, we've learned that leading in Scope 3 isn't just about managing emissions. It's about building the relationships and capabilities that will define competitive advantage regardless of regulatory timing.
As industry and regulatory forces continue to drive demand for climate action, Scope 3 remains both a critical challenge and our most significant opportunity. By working together with partners who share our commitment to climate action, we're not just reducing emissions—we're building the foundation for a more resilient and responsible chemical industry.
