Key trends to watch in project delivery: supply chain scrutiny and Scope 3 emissions

In the fourth article of our 'Key trends to watch in Project Delivery' series, we are focusing on supply chain scrutiny and specifically on Scope 3 emissions' reporting.

In 2026, project owners (and their investors) are increasingly focusing on the projects' supply chain. Scope 3 reporting is no longer a matter reserved for sustainability teams, but a core element of contractual structuring, supply chain risk allocation and transaction readiness.

Transaction and investment considerations

Scope 3 reporting is becoming a recurring theme in M&A transactions, project development and financing. Buyers, lenders and investors are increasingly focused on whether: i) Scope 3 data is available and sufficiently robust, and ii) the reporting obligations are contractually secured throughout the supply chain.

Where reporting obligations are not embedded across the supply chain, this can lead to: i) additional due diligence enquiries, ii) requests for enhanced warranties or disclosures, iii) post-completion remediation requirements, or iv) adjustments to ESG-linked financing structures.

The absence of enforceable supply-chain reporting may also complicate alignment with investor sustainability-linked targets. Embedding clear reporting obligations therefore supports not only operational transparency but also transaction readiness.

Scope 3 emissions in detail

Scope 3 emissions are indirect emissions occurring upstream (e.g. through the purchase of goods or services) and downstream (transportation distribution, and end-of-life treatment) in a company’s value chain.

Although UK disclosure regimes do not universally mandate full Scope 3 reporting, TCFD‑aligned requirements (developed by the Task Force on Climate‑related Financial Disclosures), the UK’s Streamlined Energy and Carbon Reporting (SECR) guidance and evolving standards issued by the International Sustainability Standards Board (ISSB) increasingly assume that material value‑chain emissions will be disclosed and supported by reliable data.

In practice, listed entities, funders and project sponsors are already expecting Scope 3 transparency from their counterparties.

The contractual challenge

Unlike Scope 1 (direct) and Scope 2 (energy procured and used) emissions, Scope 3 emissions are largely considered to be outside a company’s direct operational control. EPC contractors, developers and infrastructure owners rely on extensive networks of suppliers and subcontractors – many of whom have varying levels of emissions reporting maturity.

Recurring issues include:

• Data availability – not all suppliers have mature measurement systems or the resources to develop them;
• Methodology consistency – differing standards can undermine comparability;
• Contractual leverage – without clear drafting, reporting remains discretionary;

Addressing these issues at the contract stage helps align disclosure expectations with enforceable rights.

Embedding Scope 3 reporting into contracts

Key drafting mechanisms that appear in EPC and O&M contracts and framework supply agreements include:

• Mandatory reporting clauses

Obliging suppliers to provide Scope 1, 2 and relevant Scope 3 emissions data at defined intervals, calculated in accordance with recognised standards such as the Greenhouse Gas Protocol.

• Methodology alignment

Requiring consistent, auditable calculation methodologies and clear standards (like the GHG Protocol).

• Continuous improvement provisions

Encouraging measurable emissions reductions or alignment with science-based targets over time.

The role of model clauses

The Chancery Lane Project (TCLP) has developed a suite of open-source climate-aligned contractual clauses, including provisions addressing emissions reporting and data transparency.

While model clauses require tailoring for a specific project, they can provide a starting point for negotiations, promote consistency across multi-tier supply chains, and support alignment with established reporting frameworks.

Foot Anstey has worked with TCLP to adapt model clauses for incorporation in EPC contracts.

What does this mean for infrastructure delivery?

Scope 3 reporting is becoming part of the commercial and governance framework of infrastructure delivery. It requires coordination between teams to ensure that disclosure expectations are matched by contractual rights.

For EPC contractors and project owners, this means:

• mapping Scope 3 exposure across supply chains;
• reviewing existing contracts for coverage of emissions‑reporting obligations;
• incorporating clear emissions‑reporting provisions into new EPC and supply‑chain documentation;
• ensuring obligations are backed by appropriate remedies; and
• considering transaction and financing implications early in project structuring.

Thoughtful drafting and early supplier engagement help strengthen the reliability of value‑chain emissions data and support long‑term commercial strategy.

Foot Anstey advises EPC contractors and project owners on structuring and embedding emissions reporting in EPC contracts, supply agreements, and joint venture arrangements, as well as in transactions and financing structures.

If you would like to discuss how this applies to your projects or supply chain, please get in touch.