AGREENA | WHITEPAPER
The weight of regulatory and reputational pressure The rapid evolution of regulation has sharpened the need for credible Scope 3 reporting. From 2025, the EU Corporate Sustainability Reporting Directive( CSRD) and the European Sustainability Reporting Standards( ESRS) require large companies to disclose their full emissions footprint, including upstream and downstream activities. The Science Based Targets initiative( SBTi) Forest Land and Agriculture( FLAG) Guidance adds further obligations for land-intensive value chains.“ Inadequate Scope 3 reporting could result in non-compliance, fines or reputational scrutiny, and poor compliance may influence investor pressure or negatively influence their brands, as being seen as‘ unsustainable’, or even in some cases‘ greenwashing’,” says Luke.
The business risk is not just regulatory. Public scrutiny, consumer activism and investor demand for scientifically verified claims mean that organisations must go beyond compliance to demonstrate real impact. Inaction or poor disclosure brings the threat of legal penalties, loss of market access and lasting damage to brand reputation.
These risks have become more acute as climate volatility has begun to undermine the business model itself. In 2025, extreme weather events – including unprecedented droughts and floods – resulted in about € 43bn( US $ 50bn) in economic losses across the EU.“ For food and beverage companies, soil degradation means lesser crop yield, which will impact overall business performance and financial sustainability in years to come,” Luke continues. This financial volatility reinforces the need to embed credible decarbonisation and resilience directly into procurement and supply chain management, not merely treat it as an add on. procurementmag. com 81