Why climate reporting is moving into customer contracts

Many organisations are still building their approach to measuring greenhouse gas (GHG) emissions, but for some, the pressure is no longer internal or regulatory; it’s coming directly from customers.

Requests for emissions data are increasingly being built into contracts, tenders, requests for proposals and supplier requirements. Organisations that cannot respond with credible, timely data may find themselves scrambling to meet expectations or unable to comply altogether. The result isn’t just a reporting gap, but a commercial risk, with contracts, revenue and supplier relationships potentially at stake.

In contrast, organisations that can provide robust and clear emissions data are positioning themselves differently - not just as compliant, but as trusted partners, supporting their customers’ climate ambitions and supply chain transparency.

How emissions data is becoming a commercial requirement

What is changing is not just the frequency of requests, but their nature. Organisations are moving beyond high-level sustainability disclosures and are increasingly asking their suppliers to provide specific emissions data as part of commercial processes.

In many cases, customers are no longer satisfied with high-level emissions disclosures. They are seeking more detailed data, including emissions linked to specific products, services or delivery models.

For suppliers, this represents a structural shift:

• Climate data is no longer “nice to have”
• It is increasingly a condition of doing business
• And, in some cases, a factor in pricing, risk allocation and supplier selection.

Organisations that cannot provide credible, timely data risk more than compliance challenges; they risk losing access to contracts and revenue streams.

Why are organisations requiring supplier GHG emissions data?

Customer demand for emissions data is not emerging in isolation - it is a direct response to increasing regulatory, investor and market expectations.

As organisations move to measure, manage, and disclose their own emissions, many are finding that the majority of their emissions sit outside their direct operations. This is driving a shift in focus towards value chains, with organisations needing more detailed, supplier-level data to meet reporting requirements, support climate commitments and respond to stakeholder scrutiny.

In practice, this means expectations cascade through supply chains, with organisations formalising those requirements through contracts, tenders, and supplier engagement processes.

Mandatory climate disclosures are increasing the demand for supplier data

In many industries, Scope 3 emissions account for more than 90% of total emissions.

Australia’s move to mandatory climate-related financial disclosures is bringing emissions data into mainstream corporate reporting, with a strong focus on value chain emissions.

As a result, organisations required to report are turning to their suppliers to obtain the data needed to meet their obligations.

Scope 3 emissions are placing supply chains under scrutiny

In many industries, Scope 3 emissions represent the majority of an organisation’s footprint. This places procurement and supply chain functions at the centre of climate reporting.

To meet disclosure requirements - and, increasingly, assurance expectations - organisations must be able to:

• Collect emissions data from suppliers
• Assess its quality and completeness
• Demonstrate how it informs risk management and decision-making.

This is driving a formalisation of expectations through contractual mechanisms.

At the same time, expectations around data quality and assurance are increasing. While early reporting may rely on estimation, organisations are now seeking more robust, auditable data from their suppliers, rather than relying on generic or industry-average assumptions.

Why this shift will feel familiar for Australian organisations

For many Australian organisations, this transition will feel familiar.

The Modern Slavery Act has already established a precedent for embedding ESG requirements into procurement processes and contractual arrangements, including the use of model clauses and supplier due diligence obligations.

Climate-related requirements are following a similar trajectory, moving from disclosure to contractual expectation, and from policy to evidence-backed data.

What GHG emissions data customers are asking for

While requirements vary by industry, several common themes are emerging in customer expectations:

• Scope 1, 2 and increasingly Scope 3 emissions data
• Emissions information linked to specific goods, services or contracts
• Alignment with recognised frameworks (such as the GHG Protocol or equivalent standards)
• Evidence of data governance, methodologies and controls
• The ability to support audit and assurance processes.

In practice, this means moving beyond static, annual reporting to a responsive, operational data capability.

How GHG emissions data is influencing supplier selection and contracts

This shift has clear implications for how organisations position themselves in the market.

Suppliers that are unable to provide credible emissions data may face:		Conversely, organisations that can deliver consistent, high-quality data are better positioned to:
✗	Exclusion from tenders or supplier panels.	✓	Maintain preferred supplier status.
✗	Delays or challenges in contract negotiations.	✓	Support customers in meeting their own reporting obligations.
✗	Increased scrutiny from customers and financiers.	✓	Differentiate in competitive procurement processes.

In this context, emissions data is becoming a signal of operational maturity and risk readiness, not just environmental performance.

How to prepare for increasing customer data requirements

The key takeaway for Australian businesses is that emissions reporting is evolving from a periodic exercise into a core business capability.

Preparing for this shift involves more than developing a carbon inventory. It requires:

• Establishing processes to collect and validate emissions data across the value chain
• Building internal governance and controls to support disclosure and assurance
• Engaging suppliers to improve data quality over time
• Aligning reporting approaches with recognised standards and customer expectations.

Organisations that act early will be better positioned - not only to meet regulatory requirements, but to participate fully in increasingly data-driven supply chains.

Positioning for success

Climate reporting is no longer just about transparency; it’s about maintaining access to markets, meeting customer expectations and competing effectively in a changing environment.

For many Australian businesses, the question is no longer whether emissions data will be required in customer relationships, but whether they are ready to respond when it is.

How BDO can help

Responding to customer requests for emissions data requires more than preparing a one-off report. It depends on building the systems, processes and controls needed to produce credible, decision-useful data at pace.

BDO works with organisations to move from reporting to capability, including:

• Establishing GHG inventories aligned to recognised frameworks
• Developing repeatable processes for collecting and validating emissions data across the value chain
• Preparing for mandatory climate disclosures and evolving assurance requirements
• Supporting supplier engagement to improve data quality over time
• Embedding governance and controls that stand up to audit and customer scrutiny.

If you need help understanding and preparing your emissions data - whether as part of preparing for AASB S2, or to respond to customer requests and support their reporting obligations - our sustainability reporting specialists are here to help.