Scope 3, or value-chain emissions, account for an average of 75% of a company’s total greenhouse gas (GHG) emissions, rising to over 90% in the retail sector. While challenges persist in assessing Scope 3 emissions – including data availability and quality concerns – assessing these emissions is critical to any credible climate strategy. Only by acting to assess value-chain emissions will data quality improve.

Scope 3 disclosures provide vital insights into a company’s overall emissions impact. While Scopes 1 and 2 operational emissions disclosures offer a partial glimpse into a company’s direct climate impact, operational emissions are inextricably tied to upstream and downstream product-related emissions – which are captured only within Scope 3. Ignoring these emissions is akin to missing the forest for the trees: By focusing only on operational emissions, the much larger picture of a company’s emissions is ignored.

Consider Amazon. The company’s current Scope 3 disclosures address approximately 1% of the products sold on its retail platform, giving an incomplete impression of its value-chain emissions. In contrast, Walmart reports Scope 3 product-related emissions for all its retail sales, giving investors a clearer understanding of its climate impact. Walmart’s ongoing efforts to measure and reduce its full value-chain emissions not only contribute to meaningful climate action but also reduce its exposure to climate-related financial risks and create affirmative benefits.

By engaging value-chain partners to measure and reduce Scope 3 emissions, Walmart has gained a competitive edge through increased supplier efficiency, addressing consumer and employee climate concerns, avoiding greenwashing risks, and anticipating suppliers’ climate-related problems. Amazon’s incomplete Scope 3 disclosures leave investors in the dark about the emissions footprint of its vast product portfolio, all while regulatory and legal risks grow. Failing to assess full value-chain emissions is not just a climate and reporting concern – it’s a fundamental business risk. Ignoring data on a material risk factor, particularly for a corporation as sophisticated as Amazon, is simply bad business.

Despite overwhelming evidence that Scope 3 disclosures are financially and environmentally prudent, Amazon continues to cite low data quality and limited availability as an excuse for inaction. Walmart has been clear that its Scope 3 data evaluation methods and quality will evolve over time and that shifts in reported emissions are not failures but reflect the evolving nature of emissions accounting and the urgent need for action. Scope 3 data will never be perfect, but Walmart has demonstrated that even imperfect data can drive gigaton-scale emissions reductions. Other major U.S. retailers, including Target and Costco, are also improving their Scope 3 disclosures.

To address the growing legal and regulatory risks posed by Amazon’s insufficient Scope 3 disclosures and to prepare for mandatory emissions reporting, Green Century and Amalgamated Bank, represented by As You Sow, along with Proxy Impact, have filed a proposal requesting that Amazon disclose Scope 3 emissions for all retail sales. This proposal, if acted on, will bring Amazon in line with its more sustainable peers, improve investor understanding of the company’s emissions, reduce climate-related risk, and enhance Amazon’s global competitiveness.