One important feature of sustainability reporting is the reporting boundary. It remains one of the fundamental and most defining concepts in non-financial reporting.

Since impact reporting often extends beyond the reporting organisation itself to include partners across the organisation’s value chain, which may not always align with the reporting boundary used in financial reporting, sustainability reporting has a broader scope.

Although the IFRS Sustainability Disclosure Standards require sustainability reports to mirror the same reporting boundary as financial reporting, important differences remain.

One example is emissions measurement, particularly Scope 3 emissions. These are indirect emissions that occur across an organisation’s value chain, both upstream (from inputs used in an organisation’s products and services) and downstream (from the use of products and services by an organisation’s customers). While data availability has traditionally been a major challenge for sustainability re-porting, the lack of data across organisations’ value chains is even more pronounced and requires careful planning to address.

An important first step is establishing the right principles to build trust among value chain partners for data sharing and collaboration. For example, organisations must ensure that commercially sensitive data is not shared among competitors and that appropriate controls for data sharing, access and security are in place as data is collected, processed, stored, assured and disposed of.

Obtaining value chain data requires collaboration, and without trust, organisations cannot access the information needed for accurate reporting. They must also map their value chains to identify and prioritise partners that are critical to the required datasets.

For instance, engaging key suppliers to understand their emissions targets and reduction plans is essential, as their cooperation is critical to success.

Organisations should also invest in shared learning platforms across their value chains. These platforms promote a common understanding of data labelling, foster transparency and strengthen relationships among value chain partners.

A shared understanding of value chain emissions enables partners to develop more comprehensive and innovative approaches to reducing emissions across the entire value chain.